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  • CFO.com | US

Judging Tech? It Ain’t Easy

Measuring the ROI on tech projects is tough enough. Now some companies are looking to evaluate the performance of their IT employees.

According to Wright, the consulting firm is using basic metrics to gauge things like the productivity of programmers. But beyond that, both the consultant and the client are trying to come up with some different yardsticks for judging tech. And United Concordia’s management has set high standards for those new standards. “We hope to see as much as 25 to 30 percent improvement in productivity in IT as result of this methodology,” insists Wright.

Surprisingly, Wright says the relationship between IT and finance has gotten healthier since the coming began rolling out the service excellence initiative. “It used to be a little contentious, because every time we wanted something done we felt it was expensive,” concedes Wright. “But I think we have a better appreciation now for what’s involved and what IT is trying to do. And they understand our business better as time goes on.”

The tech scorecard at United Concordia should take a about a year to roll out, maybe a bit longer. For his part, Wright believes it will be well worth the effort. “We need to be able to spend more dollars on automating certain … revenue-generating processes such as selling over the Internet or working with our customers electronically.” Coming up with a formal method for assessing how well tech employees implement those kinds of projects should go a long way in helping the company determine the likely success of future E-commerce initiatives.

Align in the Sand?

Managers at Sharp Electronics Corp. also want more formal procedures for measuring IT performance. According to Tom Riley, CFO at the Sharp Services Organization, in Mahwah, New Jersey, executives at the manufacturer are considering using a balanced scorecard for tech employees, as well as workers in other departments. Given that the company CIO reports to the finance department, Riley says that sort of formalized process will “ensure the group is aligned and contributing to the success of the enterprise.”

Presently, Sharp management conducts an audit following major technology projects to see if all the desired benefits and goals have been achieved. “We have various metrics for our help desk and maintenance and support organization,” says Riley. “Our current performance evaluation system is more project or task based.”

Creating a balanced scorecard for IT is not project based — it’s people-based. Not surprisingly, the ongoing initiative at Sharp is being championed by the company’s human resources department. When the scorecard is fully in place, CFO Riley believes Sharp will be able to better measure the benefits of IT projects. Moreover, he thinks the scorecard will help make sure the tech department is moving in lock-step with the rest of the company. “[It will help workers] appreciate their role,” notes Riley, “and how they can contribute to the overall success of the company.”

While some CFOs are turning to IT scorecards to help them better evaluate their tech employees, it remains to be seen if CIOs appreciate the added scrutiny. Observers note that this newfound corporate interest in measuring tech has led to a big shift in the reporting lines of many companies. Increasingly, IT departments are coming under the aegis of the finance function. Not surprisingly that shift is creating some friction — particularly at companies where CIOs have carved out their own fiefdoms. “There’s an internal political battle going on between the CIO and CFO as far as the responsibilities of who reports to who,” says Jack Schiff, program manager at Getronics, a global technology services company.

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