IT Balanced Scorecard Value Metrics Revisited

Since we first wrote about Norton and Kaplan's Balanced Scorecard (BSC) method of measuring performance, Forrester has worked with many CIOs who have implemented IT Balanced Scorecards to measure and communicate IT performance both internally to IT as well as externally to IT stakeholders. Of the four BSC perspectives, IT value metrics typically present the biggest challenge for CIOs due to the immaturity of IT value measurement practices and methodologies within most IT organizations. Business value in its basic form is measured by positive changes to business outcomes like revenues, profits, and return on assets; outcomes that influence shareholder value in the private sector; or mission-related outcomes that influence stakeholder value for nonprofit and government sector enterprises. CIOs who make high-quality business value metrics a priority in their BSC implementations will find it easier to transition IT to a strategic partnership with their business counterparts.