CobiT, Val IT & Balanced Scorecards

Balanced Scorecards As Management Toolkit Sourced from ITGI’s Introductory CobiT Presentation, ISACA’s Implementing CobiT for IT Management & Governance, CobiT IT Governance Implementation, IT Assurance and Val IT guides & frameworks and rooted in “ Linking the IT Balanced Scorecard to the Business Objectives at a Major Canadian Financial group” by
Wim Van Grembergen - University of Antwerp (UFSIA)
Ronald Saull - Information Services Divisions of Great-West Life, London Life, Investors Group
Steven De Haes - University of Antwerp Management School (UAMS)
With thanks to R. Basham and M. Impey, there for me from the start.

What are Balance Scorecards
The BSC concept recognizes that, over the last decades, the means of value creation shifted from tangible to intangible assets, and intangible assets generally are not measurable through traditional financial means. In the intangible economy, intangible assets require several interdependent ingredients for value creation
Strategic investments, such as leadership, process, IT, climate and skills must be bundled together
The BSC was created to provide an understanding of how intangible assets are used to create value. It measures performance from 3 leading perspectives - customers, internal processes and learning & growth – in addition to the traditional financial measures that describe value creation after it happens
Introduced by Kaplan and Norton in 1992 in response to their belief that the execution of strategy is the corporate challenge of our time

IT Service Provider or Strategic Partner As Is To Be Service provider Strategic Partner IT for efficiency IT for business growth Budgets driven by external benchmarks Budgets driven by business strategy IT separable from the business IT inseparable from the business IT seen as an expense control IT seen as an investment to manage IT managers as technical experts IT managers are business problem solvers

Scorecard Perspective & Mission Customer Orientation Corporate Contribution Perspective question Perspective question How should IT appear to business unit executives to be considered effective in delivering services How should IT appear to company executives & its corporate functions to be considered a significant contributor to company success Mission Mission Supplier of choice for all information services, directly & indirectly through supplier relations Business objectives enabler & contributor via effective delivery of value added i-services Operational Excellence Future Orientation Perspective question Perspective question Which services & processes must IT excel at to satisfy stakeholders & clients IT to develop effective delivery & continuous performance enhancement Mission Mission Deliver timely & effective IT services @ targeted service level & costs Continuous performance improvement through innovation, learning & growth

IT Strategic Scorecard Universe

Scorecard Cascade

Sample IT Service Desk Metrics cascade
A unit scorecard, situated in the operational services scorecard group, metrics such as:
average speed of answer,
overall resolution rate at initial call and
call abandonment rate (all three customer orientation metrics)
Are rolled-up to service level performance metrics in the IT strategic balanced scorecard.
Other metrics of this unit scorecard, such as
Expense management (corporate contribution perspective),
Client satisfaction (customer orientation perspective),
Process maturity of incident management (operational excellence perspective) and
Staff turnover (future orientation perspective),
Will aggregate as part of the IT strategic scorecard.
The overall view of the IT strategic balanced scorecard is then fed into, and evaluated against, the defined business objectives.

Cause and Effect Scorecard Relationships

Generic SLM Cause & Effect Scorecard

Organisations will consider and use a variety of IT models, standards and best practices. These must be understood in order to consider how they can be used together, with C OBI T acting as the consolidator (‘umbrella’). C OBI T ISO 9000 ISO 17799 ITIL COSO WHAT HOW SCOPE OF COVERAGE CobiT alongside other Management Frameworks

IT Governance, COSO and CobiT focus areas Enterprise Governance IT Governance Best Practice Standards QA Procedures Processes and Procedures Drivers ITIL

Where do BSC’s fit in Governance PERFORMANCE: Business Goals CONFORMANCE Basel II, Sarbanes- Oxley Act, etc. Enterprise Governance IT Governance ISO 9001:2000 ISO 17799 ISO 20000 Best Practice Standards QA Procedures Processes and Procedures Drivers C OBI T COSO Security Principles ITIL Balanced Scorecard

Tracks to a Balanced Scorecard Working closely with Val IT, CobiT proposes two methods:
A generic Business goals to IT goals to IT Processes cascade
See CobiT 4.1 - Appendix 1 - pages 169 & on
The Input / Output tables
To be found in each of the 34 CobiT 4.1 Processes. Resulting in a set of metric indicators that are the object of this presentation

Track 1, Example Business goals to IT goals to IT Processes AI 7 Install and Accredit Solutions and Changes - Appendix 1 - p. 169

Mapping to CobiT v 4.1 from Appendix 1 - p. 169 AI 7 Install and Accredit Solutions and Changes

CobiT 4.1 replaces KGI & KPI with: • Outcome measures or Lag indicators ex- KGIs, have the goals / results been met. • Performance indicators or Lead indicators ex-KPIs, will the goals be met. Track 2 exemple CobiT 4.0 compared to CobiT 4.1 as seen from AI 7 Install and Accredit Solutions and Changes CobiT 4.0 proposes key identifiers
IT Goals
Process Goals
Performance

Process Input / Output and Goals & Metrics tables

The RACI Chart CobiT's Who does What As applied to AI7 - Install & Accredit Solutions & Change In this instance, Head of Development is both Accountable and Responsible regarding system conversion and integration tests on the test environment

Metrics driving AI 7 Install & Accredit Solutions & Change IT Metrics Lead indicators for Business objectives / Lag indicators for IT Process metrics
% of stakeholders satisfied with data integrity of new systems
% of systems that met expected benefits as measured by post-implementation process
Process Metrics Lead indicators for IT Process Metrics / Lag indicators for Activity Metrics
Number of errors found during internal audit regarding the installation & accreditation process
Amount of rework after implementation due to inadequate acceptance testing
Number of Service Desk calls from users due to inadequate training
Application down-time or data fixes caused by inadequate testing
Activity Metrics driving Process Metrics Lead indicators for Process Metrics
Degree of stakeholder involvement in the installation and accreditation process
% of projects with a documented and approved testing plan
Number of lessons learnt from post-implementation review
% of errors found during QA review of installation, and accreditation functions
Number of changes without required management sign-off before implementation

CobiT 4.0 – Sample Interlinked Key Goal Statements to be translated into measurable metrics
AI6 – Manage Change, Change Standards and Procedures:
An agreed-upon and standardized approach for managing changes in an efficient and effective manner
Changes reviewed and approved in a consistent and coordinated way
Formally defined expectations and performance measurement
DS1 – Service Level Management Framework :
Clarified IT service responsibilities and IT objectives aligned with business objectives
Improved communication and understanding between business customers and IT service providers
Consistency promoted in service levels, service definitions, and service delivery and support
DS8 – Service Desk Reporting and Trend Analysis :
Decreased service downtime
Increased customer satisfaction
Confidence in the offered services
Help desk performance measured and optimized
DS13 – Manage Operations, Operations Procedures and Instructions :
Demonstration that IT operations are meeting SLAs
Promotion of continuity of operational support by documenting staff experience and retaining it in a knowledge base
Structured, standardized and clearly documented IT operations procedures and support staff instructions
Reduced time to transfer knowledge between skilled operation support staff and new recruits

CobiT 4.0 – Sample Interlinked Key Performance Indicators
AI6 – Manage Changes :
Percent of changes recorded and tracked with automated tools
Percent of changes that follow formal change control processes
Ratio of accepted to refused change requests
Number of different versions of each business application or infrastructure being maintained
Number and type of emergency changes to the infrastructure components
Number and type of patches to the infrastructure components
DS1 – Service Level & Operations Level Agreement :
Number of formal SLA review meetings with business per year
Percent of service levels reported automated or not
Number of elapsed working days to adjust a service level after agreement with customer
DS8 – Service Desk:
Percent of incidents and service requests reported and logged using automated tools
Number of days of training per service desk staff member per year
Number of calls handled per service desk staff member per hour
Percent of incidents that require local support (field support, personal visit)
Number of unresolved queries
DS13 – Manage Operations :
Number of training days per operations personnel per year
Percent of hardware assets included in preventive maintenance schedules
Percent of work schedules that are automated
Frequency of updates to operational procedures

CobiT 4.0 - Sample Interlinked Activity based Critical Success Factors
AI6 – Manage Changes :
Defining and communicating change procedures, including emergency changes and patches
Assessing, prioritizing and authorizing changes
Scheduling changes
Tracking status and reporting on changes
DS1 – Service Level & Operations Level Agreement :
Defining services
Formalizing internal and external agreements in line with requirements and delivery capabilities
Reporting on service level achievements (reports and meetings)
Ensuring that reports are tailored to recipient audience
Feeding back new and updated service
DS8 – Service Desk :
Installing and operating a service desk
Monitoring and reporting trends
Aligning incident resolution priorities with business imperatives
Defining clear escalation criteria and procedures
DS13 – Manage Operations :
Operating the IT environment in line with agreed-upon service levels, with defined instructions and close supervision
Preventive maintenance and monitoring of the IT infrastructure

CobiT 4.0 - Sample Interlinked Monitor & Evaluate CSFs, KGIs & PKIs
ME1 - Monitor and Evaluate IT Performance
Capturing, collating and translating process performance reports into management reports
Reviewing performance against agreed-upon targets and initiating necessary remedial action
ME1 – Performance Assessment
Periodically review performance against targets, analyze the cause of any deviations, and initiate remedial action to address the underlying causes. At appropriate times, perform root cause analysis across deviations.
ME1 – Monitor and Evaluate IT Performance
Time lag between the reporting of the deficiency and the action initiation
Amount of delay to update measurements to reflect actual performance objectives, measures, targets and benchmarks
Number of metrics (per process)
Number of cause-and-effect relationships identified and incorporated in monitoring
Amount of effort required to gather measurement data
Number of problems not identified by the measurement process
Percent of metrics that can be benchmarked to industry standards and set targets

Maturity Model – From As is to To Be A ‘ Rising Star Chart’ for Documenting the As-is and To-be Positions

Scorecard Template

Opportunity Template Management Area Affected Detailed Description Quantifiable Benefit Strategic Benefit Risks of Implementing Risk of Not Implementing Groups Impacted

Val IT framework & its Toolset

Val IT framework and tool set Val IT focuses on the Financial side of IT investments , key terms are:
Value : financial, non-financial or both
Portfolio : a group of managed & monitored programs, projects & services
Investment Program :
Primary unit of a structured group of interdependent projects
Project : A structured set of activities delivering a defined capability
Implement : includes the full economic life-cycle of the investment
Processes : Value governance (VG), Portfolio Management (PM) &
Investment Management (IM)

Val IT Case Processes & Practices

Val IT & CobiT

Val IT Case Fact Sheet Template

Val IT Metrics Template

Val IT - Assessing Risk

Any Questions?

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CobiT, Val IT & Balanced Scorecards

by MichaelSim on Dec 14, 2008

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CobiT, Val IT & Balanced Scorecards — Presentation Transcript