In a
business
Business is the practice of making one's living or making money by producing or Trade, buying and selling Product (business), products (such as goods and Service (economics), services). It is also "any activity or enterprise entered into for pr ...
or
IT Management
Information technology management or IT management is the discipline whereby all of the information technology resources of a firm are managed in accordance with its needs and priorities. Managing the responsibility within a company entails many o ...
context, IT performance management is concerned with measuring the expenditure of
capital
Capital may refer to:
Common uses
* Capital city, a municipality of primary status
** List of national capital cities
* Capital letter, an upper-case letter Economics and social sciences
* Capital (economics), the durable produced goods used f ...
and
human resources
Human resources (HR) is the set of people who make up the workforce of an organization, business sector, industry, or economy. A narrower concept is human capital, the knowledge and skills which the individuals command. Similar terms include m ...
on Information Technology projects. This allows the business to determine how these expenditures improve
strategic
Strategy (from Greek στρατηγία ''stratēgia'', "art of troop leader; office of general, command, generalship") is a general plan to achieve one or more long-term or overall goals under conditions of uncertainty. In the sense of the "art ...
and
operational
An operational definition specifies concrete, replicable procedures designed to represent a construct. In the words of American psychologist S.S. Stevens (1935), "An operation is the performance which we execute in order to make known a concept." F ...
capabilities of the firm in designing and developing products and services for maximum
customer satisfaction
Customer satisfaction (often abbreviated as CSAT) is a term frequently used in marketing. It is a measure of how products and services supplied by a company meet or surpass customer expectation. Customer satisfaction is defined as "the number of c ...
, corporate
productivity
Productivity is the efficiency of production of goods or services expressed by some measure. Measurements of productivity are often expressed as a ratio of an aggregate output to a single input or an aggregate input used in a production proces ...
,
profitability
In economics, profit is the difference between the revenue that an economic entity has received from its outputs and the total cost of its inputs. It is equal to total revenue minus total cost, including both explicit and implicit costs.
It i ...
, and
competitiveness
In economics, competition is a scenario where different economic firmsThis article follows the general economic convention of referring to all actors as firms; examples in include individuals and brands or divisions within the same (legal) firm ...
.
[M.K. Badawy (1998), Technology Management Education: Alternative Models. California Management Review. 40 (4), pp. 94–115] This type of IT Performance Management is usually of interest to
executive level IT personnel, all the way up to the
Chief Information Officer (CIO), and is related to
IT Portfolio Management.
Benefits
Direct financial gains
* Focuses IT resources on projects that grow
sales
Sales are activities related to selling or the number of goods sold in a given targeted time period. The delivery of a service for a cost is also considered a sale.
The seller, or the provider of the goods or services, completes a sale in r ...
* Focuses IT resources on projects that reduce
cost
In production, research, retail, and accounting, a cost is the value of money that has been used up to produce something or deliver a service, and hence is not available for use anymore. In business, the cost may be one of acquisition, in which ...
s
* Aligns IT organization directly behind corporate
financial goal
Personal finance is the financial management which an individual or a family unit performs to budget, save, and spend monetary resources over time, taking into account various financial risks and future life events.
When planning personal fin ...
s
Improved management control
*Demonstrates the direct business value of each IT project or operation
* Helps
audit
An audit is an "independent examination of financial information of any entity, whether profit oriented or not, irrespective of its size or legal form when such an examination is conducted with a view to express an opinion thereon.” Auditing ...
and
comply with
legislative
A legislature is an assembly with the authority to make laws for a political entity such as a country or city. They are often contrasted with the executive and judicial powers of government.
Laws enacted by legislatures are usually known as p ...
requirements
* Allows reallocation of IT resources to projects of most importance to the corporation
* Facilitates the elimination of IT projects that are not delivering on expected benefits
See also
*
IT Resource Performance Management
References
{{DEFAULTSORT:It Performance Management
Organizational performance management
Information technology management