When was the last time you were asked how IT investments contribute to your agency's mission? And what answer did you give? Did you tout the fact that IT makes the agency more efficient or saves resources by lowering costs? Did you highlight the fact that your new social media presence and customer-facing website would increase citizen engagement and trust in your agency?
How did that person react to your answers? Was he convinced IT ought to be viewed as a strategic asset and not just a cost of doing business? Unless you were able to give him concrete measures, chances are you left him unconvinced. Sound harsh? Yes, but ask yourself: If you were considering an investment and the salesperson gave you concrete examples of its value, wouldn't you be more likely to believe the pitch?
Investments in information technology continue to rise in the public sector. In the US, federal agencies collectively spend more than $82 billion annually for maintaining, developing, and acquiring IT infrastructure. A significant proportion of those investments go toward making agencies more efficient in delivering services to the public. It is estimated that over $600 billion has been spent on IT projects over the past decade.
So why do government CIOs struggle when asked to quantify the value of IT to their agency? CIOs reluctantly confess that doing so is not only difficult but is something they have not considered seriously.
[Now's the right time to ask the uncomfortable questions. Read: Digital Business Strategy: 8 Gut-Check Questions.]
Over the last few years, my research work has allowed me to interview dozens of public-sector CIOs about their strategies for service-oriented architectures, crowdsourcing, and, most recently, big data. These federal, state, and local CIOs are working diligently to deliver value; innovate and experiment with technologies; and streamline business operations under strict budget and time constraints. Yet when asked a simple question – how do you measure the value of IT to your organization? – they often are speechless.
Unfortunately for CIOs, there are plenty of ways to measure IT waste and failure.
For instance, recent statistics released by the Government Accountability Office (GAO) concede that each year, more than $20 billion is spent on information systems and IT initiatives that never get off the ground. As much as 75% of the $600 billion federal IT budget has been spent on cost overruns and failed implementations, according to the report. Not surprisingly, in the absence of metrics on IT value, the negative statistics get more airtime and press coverage.
CIOs need to focus on measuring the value of IT and devising metrics that are accessible to their internal and external stakeholders. Implementing performance indicators in the public sector is a difficult proposition. It's too easy to establish broad performance measures that have little relevance to your objectives, or rely too much on financial measures and efficiency without considering full impacts. Constantly changing performance indicators is another common problem.
The following five strategies will help you devise metrics to measure the impact of your agency's IT investments:
1. Create metrics where IT influences mission outcomes.
Prior to the introduction of a major new IT initiative, identify the mission outcomes you want to influence. These outcomes can be related to business processes, efficiencies, citizen experiences, or even employee-engagement measures. Make sure you understand the goals and the factors that influence them. Work with the key stakeholders who have influence over the business processes that affect the goals to get their perspective on how an IT investment might alter the outcome.
2. Develop metrics that measure IT project outcomes on multiple dimensions.
Despite rhetoric about creating IT performance measurements, too often IT projects are measured based on their financial outcomes. Metrics that measure IT project outcomes should focus on mission outcomes and be aligned with the strategic objectives of the organization. Put another way, each metric should be linked to the strategic priorities of the organizations in order to ensure they get the requisite attention.
3. Collect good baseline data on measures.
This is vital if you want to know what the current levels of functionality and performance is. Ensure that the baseline data collected is valid and reliable, and representative of both normal operating conditions and operations under stress. Collection of good baseline data is often overlooked by IT teams, which leaves them vulnerable to scrutiny when questions on IT value are asked.
4. Use dashboards to communicate.
Communicate metrics to stakeholders through the use of dashboards. Traditional email reports are often overlooked. When appropriate, communicate metrics to journalists and others outside the agency who can tell your story.
5. Share your experiences building metrics and evaluation programs with other CIOs.
Share both lessons learned from things that worked and did not work. CIOs can gain from knowing what did not work.
CIOs adept in using metrics on a regular basis have learned it not only helps keep their stakeholders up-to-date on key initiatives, but also helps change the perception of IT departments as value generators instead of cost centers. Picking the right metrics and embedding them in dashboards also helps ensure they'll be more accurately used to track operational performance, make strategic decisions, and ensure that IT projects are aligned with other strategic objectives and priorities of the agency.
Finally, metrics can be used as a source of energy to ignite the morale of the IT department and keep it positive, even when most of the mainstream coverage of IT in the public sector projects might be negative. The bottom line: Make the creation of metrics a core discipline for communicating the value of your department, as well as your ongoing IT investments, to all of your stakeholders.
These five higher education CIOs are driving critical changes in an industry ripe for digital disruption. Also in the Chiefs Of The Year issue of InformationWeek: Stop bragging about your agile processes and make them better. (Free registration required.)