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.
- 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.