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Performance Measurement

A4

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.

2Basic
  • Practice
    Use basic funding metrics.
    Outcome
    Initial performance measurements are in place.
    Metric
    % of IT spend by category.
3Intermediate
  • Practice
    Use a standardized set of IT funding metrics, and regularly review and act on the results.
    Outcome
    Funding trends and patterns begin to emerge and influence funding decisions.
    Metrics
    • % of IT spend by category.
    • # of funding metrics results reviewed per annum.
4Advanced
  • Practice
    Use a comprehensive set of IT funding metrics including risks and returns, and periodically review the results.
    Outcome
    The comparative costs of funds from different sources can be considered up front in decision-making.
    Metrics
    • % of IT spend by category.
    • Return of Investment (ROI).
    • Return on Assets (ROA).
    • Risk Adjusted Return on Capital (RAROC).
    • Shareholder value.
    • # of funding metrics results reviewed per annum.
5Optimized
  • Practice
    Continually review and improve the set of funding metrics.
    Outcome
    Metrics review results can be acted upon to drive efficiencies and improvements in funding decisions.
    Metric
    # of funding metrics results reviewed per annum.