KPI's For a Chief Information Officer (CIO)

Photo at blog from webmaster - 21/09/2010 - 13:38

After my generic comments on KPI's for ICT in my last blog, it is now time to zoom in on the indicators which should guide the performance of the Corporate Innovation/Information Officer (CIO). For that we need to categorize the various roles we advocated the CIO can and should play.

If we summarize the various elements that the CIO function has to address and for argument sake we assume this is all combined in one person, there are four roles this individual should play:

  • Executive role (make sure ICT contributes to a profitable company)
  • Innovation role (make sure that ICT helps to innovate the business)
  • Change role (make sure that the right ICT resources are used)
  • Operational Excellence role (make sure that ICT resources are used best)

Given my suggestion to align KPI's with the KBR's (like revenue, profit, customer addition and retention, and market share, the following example KPI's for the CIO can be derived:

Executive:

  • Actual ICT spending vs Plan budget (budget awareness management)
  • % of ICT cost in relation to Actual Revenue (agile business awareness)

Innovation:

  • % of current business initiatives driven by ICT (pro-activeness of role is measured)
  • % ICT Capital Spending of Total Investment (relative to peer group or market)

Change:

  • ROI on ICT Capital Spending (measure the actual result on revenue and profit of ICT investments)
  • % Average time-to-profitability for changes to existing products/services
  • % of ICT resources associated to ICT non-maintenance tasks (drive continuous change)

Operational:

  • % of cost price decrease for a business transaction (e.g. Order-to-cash)
  • % of ICT costs associated to ICT maintenance (should structurally lower over time)
  • % of improvement in customer satisfaction (only if measured as standard integrated part of the operation)

I limited myself to KPI's that will serve for a longer period but of course project bound KPI's may play a role too (e.g. outsourcing of a department or setting up a unit in a new country). Ideally the KPI's should be presented as a Dashboard, giving a periodical snapshot of the situation.

If you need some creative support in setting KPI's for you situation, I would suggest a visit to KPI Library.

Mapping KBR's and KPI's within an organization is an interesting exercise and in doing so you will find out that personal perceptions are often not in line with the expected business directions. Just try it out, if only to get more aligned.

As always comments welcomed!

This blog is part of a series on Key Performance Indicators (KPI's):

  1. Sense and Non-Sense of KPI's
  2. KPI's For a Corporate Information Officer (CIO) (this blog)
  3. Can You Provide Me with some KPI's to Measure Innovation?
  4. New! The Time Variant Business Balanced Score Card (BBSC)
  5. From KPI's To an Actionable Dashboard Implementation
  6. MyRealTimePerformance: Your Real-Time Personalized Dashboard with Actionable Items!
  7. How To Turn Business Intelligence (BI) Into a Management Instrument With a Real Return On Investment (ROI)

Results2Match has a strong vision on successful Key Performance Indicator strategies and result driven implementations.

This blog is written by Hans van Nes. Hans is a very experienced interim manager and (radical) change management consultant. You can contact Hans through his Results2Match email address.


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