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The Five Essential Metrics for Managing IT–Forrester


Five Essential Metrics Provide a Balanced Picture of IT’s Contribution

 

The five metrics forming the core of an IT scorecard are

  1. Investment alignment to business strategy
  2. Business value of IT investments
  3. IT spend ratio
  4. Critical business service availability
  5. Operational performance

 

These metrics provide a balanced view of IT performance to IT stakeholders including the board of directors, C-level executives and other business leaders.  As simple as these metrics may seem, they require a fairly high degree of IT management and process maturity to capture and report the data and perform at a high level.

 

Metric #2: Cumulative Business Value of IT Investment

 

The second metric explicitly measures and communicates the value of IT investments by looking at the cumulative return of the entire portfolio as illustrated below (see Figure 2).  This view is generated by sorting all projects in the portfolio by their net present value (NPV) in descending order.

 

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For a description of the other four metrics see Forrester, The Five Essential Metrics for Managing IT by Craig Symons

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