Performance Measurement
Use metrics to track, evaluate, and improve funding-related outcomes – for example, cost of funds, spend by category/initiative/business unit, return on investment (ROI), return on assets (ROA), and so on. Link funding to the benefits derived to determine the impact of funding.
Improvement Planning
Practices-Outcomes-Metrics (POM)
Representative POMs are described for Performance Measurement at each level of maturity.
- 1Initial
- Practice
- Rely on the best endeavours of available personnel.
- 2Basic
- Practice
- Use basic funding metrics.
- Outcome
- Initial performance measurements are in place.
- Metric
- % of spend by category.
- 3Intermediate
- Practice
- Use IT funding metrics and regularly review and act on the results.
- Outcome
- Funding trends and patterns begin to emerge and influence funding decisions.
- Metric
- # of funding metrics results review per annum.
- 4Advanced
- Practice
- Use a broad set of funding metrics including risk/return, with periodic results review.
- Outcome
- Costs of funds from different sources are starting to be considered.
- Metric
- Funding risk/return metric in place.
- 5Optimized
- Practice
- Ensure that funding performance measurement includes both tangibles and intangibles e.g. RAROC (Risk Adjusted Return on Capital), Shareholder value.
- Outcome
- There is a holistic understanding of the costs of financing and the anticipated benefits to be derived from these funds.
- Metrics
- RAROC (Risk Adjusted Return on Capital)
- Shareholder value.
- Practice
- Regularly review and improve a broad set of IT funding metrics.
- Outcome
- Metrics are regularly reviewed and measures acted upon to drive efficiencies and improvements in funding decisions.
- Metric
- # of metric result reviews per annum.