Chapter 5. IT Performance Management Using the Balanced Scorecard

BY PAUL R. NIVEN

CHAPTER ROADMAP

Statistics chronicling high-profile IT project failures abound in the literature and the press with some pundits suggesting that upwards of 66 percent of all IT initiatives prove unsuccessful in some measure. Although not all technology endeavors are outright failures of course, many exceed the predefined budget, lag woefully behind schedule, or are eventually rolled out with far fewer functions and features than originally suggested.[30] Histrionics and assaulting headlines aside, the stakes are incredibly high in this game as organizations spend billions of dollars on technology projects promising greater efficiency, business insights, and strategic effectiveness, all prerequisites to performing with any degree of success on today's global stage.

Although myriad reasons exist for IT project problems, a key contributor to the quagmire of murky results CIOs often find themselves trudging reluctantly through is a lack of alignment between the organization's strategy and the portfolio of initiatives pursued by IT departments struggling to keep up with user demands as discussed in the first three chapters. Information capital, the domain of the CIO, and a vital raw material to organizational success in the so-called "new economy" is only valuable in the context of strategy, and thus IT spending must align with the organization's stated strategic direction.[31] Should, for example, a company ...

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