IT Results: What Did I Do for My Company?By Stephen Lipka | Posted 11-06-2009
IT Results: What Did I Do for My Company?
If you're about to explain your work and your value to senior management or the board, you may want to think about what you did for your company and your company's customers. If you think about servers, uptime and how many e-mail messages your team has managed, your audience probably won't be moved. Saving money might impress the CFO and CEO, but there's a limit, and it doesn't mean much to those trying to build your product or deliver your service.
So, what matters when you're touting your achievements? The answer depends on two viewpoints: that of your audience and the ones implied in your achievements.
You have many constituents, and it should come as no surprise that different constituencies have different needs and measures of value. Some audiences you might consider are the board, the CEO, the CFO, your peers in engineering, marketing, sales, service, manufacturing, and HR, and maybe even your company's distributors and customers.
So if you're going to tell constituents about IT's accomplishments, make sure your message won't fall on deaf ears: Know their viewpoint.
For the other dimension, let's take a clue from the balanced scorecard-approach to strategy. Strategic objectives, each with their own metrics, fall into one of four perspectives (viewpoints): financial benefit, customer benefit, critical processes and capability. Achievements in these categories may not resonate with all audiences--or any, for that matter. So let's examine your achievements, how they fit into these perspectives, and how these perspectives resonate by audience.
In the balanced scorecard approach, the top perspective for profit-making organizations is financial (or stockholder) benefits. In other words, the kind of metrics you'll find here are about money. Let's look at three categories of financial objectives, metrics, and achievements.
â¢ Cost-related: This is all about savings. How much money did you save? How much did you reduce the cost of IT per employee? How much did you reduce the monthly and yearly variances from budgets? Some of these, in fact, could be tied to benchmarks. How close did you come to the average IT cost per gross revenue dollar for your industry?
Any improvement you made in cost management, which is indeed an accomplishment, may have helped the company improve its profitability. But important as these achievements may be, they're pretty boring to most.
â¢ Process cost reduction: Rare is the project these days that isn't justified by a projected return on investment. One basis for savings is the reduced cost of some business process brought by a proposed application. Some examples include reducing the cost of invoice receipts by introducing a paperless invoicing and payment process, or lowering the launch cost of a new franchisee by putting a fast-track process into place for clear winners, thus saving review labor.
It's likely you acted in partnership with the business process owner to design the improvement and measure the results in financial terms. Your contribution to cost savings--by virtue of your collaboration--is therefore more interesting to more constituencies.
â¢ Revenue-related: In today's world, IT is a partner in driving the profitability of the company. Beyond partnering with the business to improve efficiency, why not partner to bring new services to the market? Or add an e-commerce channel, a subscription to a database or electronic publication, or free technical support to end-users of your company's product, given and paid for by your product's distributors?
Any new revenue stream made possible by technology falls into this category, and your contribution will generate more excitement.
So how will it play in Peoria? Here's a table of the kind of financial achievements you may have delivered, who your audience is, and which of them will be happy to hear it:
Why the two "maybes?" If your peer organizations are truly partners, and you designed the improvements and the revenue stream with them, they'll be happy and they'll share in the benefits. If IT moves forward without peer organization agreement and participation, however, IT will be perceived as a competitor or threat, particularly if IT is successful.
The second perspective for profit-making organizations in the balanced scorecard approach is customer benefits. The kind of metrics you'll find here are concerned with services you brought to your business partners, users, end customers, distributors, etc., measured by their success metrics or their satisfaction levels. Examples include:
â¢ Increased satisfaction with the features in your applications.
â¢ Increased satisfaction with response time
â¢ Increased satisfaction with technical support
â¢ Increased sales or retention of customers arising from any of the above
â¢ Increased barriers to distributor or customer departure because of their increased dependence on your technology
â¢ Reduced time to execute a business process
Note the similarity between this last point and process cost reduction above in the financial perspective. Process cost reduction, as the phrase suggests, measures cost. Reducing time to execute business processes, however, is more closely tied to your business partner's process metrics.
This highlights the relationship between financial perspective and customer perspective objectives, metrics, and achievements. Customer perspective objectives are second-tier; they should be designed to contribute to financial (first-tier) objectives and achievements--IT's or the company's. There may not be a direct tie, because we all understand that sometimes there's a long-term indirect effect that just can't be quantified in dollars and cents.
What you did for your company--in this category--has indirect effects on the company's performance. These achievements are appreciated by anyone affected by your services, but because there's not always a tie to money and because your accomplishments aren't expressed in financial terms, you can likely guess which audience might not perceive your achievements as contributions to the company:
However--and this is a critical point--these are leading indicators, unlike the financial tier achievements. If you succeed in these areas, you are likely to see improvements in your financial achievements or the company's financial achievements. If you fail to achieve anything in this category, your achievements in the top tier probably won't be so good in the next reporting period. Consider: If your users aren't happy because that new release was flawed, don't expect your support costs to drop.
Critical Process Perspective
Critical Process Perspective
The third tier in the balanced scorecard approach includes objectives and metrics for critical processes - processes IT has to do well if it's going to deliver anything in the above two tiers. Your achievements can include better application development and change management processes, improved balance between maintenance and innovative work, convergence to your intended enterprise applications architecture, or improved server up-time (or better performance on any part of your SLA). Just as the customer-perspective tier contributes to - and is a leading indicator of - the financial tier, achievements in this tier support the customer benefits tier and perhaps the financial tier directly. And these achievements are leading indicators as well. The time delay between these achievements and financial achievements is even longer.
So how will these achievements be received? Remember, telling someone you've reduced downtime or improved development responsiveness won't be nearly as persuasive as when they feel the benefits (one tier up). Your achievements in this area are critical. But because the impact is delayed, only the most perceptive will really understand. The CEO might appreciate your achievements, and members of peer organizations with whom you've worked to build new capabilities might understand the coming effects. Except for you and your team, most stakeholders won't care about these.
This tier of strategic objectives in the balanced scorecard approach focuses on capability in staff and tools; this is also sometimes expressed as learning and growth. Some of your achievements could include improving the skills of your IT staff, improving application "coverage" so that you are less dependent on a single individual, reducing the number of vendors to manage, or increasing retention. These metrics are leading indicators with very long term effects on higher tiers, and achievements you've made in these areas will likely go unappreciated, even though they are the foundation of everything else. Thus, the table is not shown because it's empty!
You may have achieved quite a bit. But when it comes to explaining what you've done for the company, make sure you understand your audiences. Your newsletters, your reports to peer and senior management, your news to distributors, and (if it's fitting) communication with the company's customers should focus on what matters to them.
Stephen Lipka, Ph. D., is a Principal of Avatar Strategic Partners.