Information technology (IT) plays a major role in today’s companies. Although, in most firms IT does not generate the core customer value itself, it rather supports creating additional customer value or enables cost efficiency of business processes. This is why IT departments are viewed in most cases as service centres of companies, providing a defined set of services for as low costs as possible. But, service centres should still strive to provide only these services which are necessary for supporting the company’s strategy. In the beginning of information technology, IT departments defined the quality and quantity of services provided for the firm. Also, innovations concerning IT, evolved mostly within the IT department. This was because only IT-staff has known the range of possibilities IT was able to offer. A major problem of the IT department defining the quality of service was that many improvements have been made for the sake of IT only and have not been aligned to the strategy of the company. Therefore, many resources of a company have been wasted in IT departments. However, for today’s businesses it is essential that IT enables only corporate strategies in order to remain effective.
Caused by the current financial crisis, uncertain times for businesses are expected. This makes strategy alignment and execution of IT departments even more significant in order to stay efficient and effective. But, a recent survey carried out by McKinsey & Company shows that there are still enormous potentials for improving the performance of IT departments. For example the survey shows that the basic services are met quite well by many IT departments, but the big challenges for supporting the business, still remain. Also, 67% of all respondents of the survey (chief information officers and senior executives) think that the business and IT strategy are not tightly integrated in their company. (cf. McKinsey 2008)
Consequently, strategy alignment of business and IT as well as strategy execution are not simple tasks. Processes which are supporting the strategy effectively have to be defined and controlled constantly. Controlling tangible assets, which affect the strategy, might turn out to be fairly complex, controlling intangible assets is even more difficult. [...]
Inhaltsverzeichnis (Table of Contents)
- 1 Introduction
- 2 Problem definition
- 2.1 Introduction to IT organisations
- 2.1.1 Structure of the examined IT department
- 2.1.2 Processes of the IT department
- 2.2 Existing management ratios
- 2.3 Goal of the thesis
- 3 The Balanced Scorecard (BSC)
- 3.1 BSC Fundamentals
- 3.1.1 Financial Perspective
- 3.1.2 Customer Perspective
- 3.1.3 Internal Perspective
- 3.1.4 Learning and Innovation Perspective
- 3.2 The BSC as Strategic Management System
- 3.2.1 Translating the Vision....
- 3.2.2 Communicating and Linking
- 3.2.3 Business Planning
- 3.2.4 Feedback and Learning
- 3.3 Strategy Maps
- 3.4 Implementation of a BSC
- 3.5 Summary of BSC advantages
- 3.6 BSC criticism
- 4 Alternatives to the BSC
- 4.1 Gälweiler's Strategic Navigation System
- 4.1.1 Comparison to the BSC
- 4.2 Stakeholder Scorecard
- 4.2.1 Architecture
- 4.2.2 Criticism….......
- 5 The IT BSC
- 5.1 Model of Kütz
- 5.1.1 Perspectives....
- 5.2 Model of Schmid-Kleemann
- 5.2.1 Perspectives....
- 5.2.2 Strategy Map
- 5.3 Symons's IT Strategy Maps
- 5.3.1 Perspectives..
- 5.3.2 Strategy Map ....
- 5.4 Conclusion on IT-BSC models
- 5.5 Alignment to corporate BSC
- 5.5.1 Definition of the IT strategy
- 5.5.2 IT functions within the corporate BSC
- 6 Implementation of the IT BSC for the IT department examined
- 6.1 Decision
- 6.2 Implementation
- 6.2.1 Mission statement
- 6.2.2 Vision statement..
- 6.2.3 IT Strategy
- 6.2.4 Strategy Map
- 6.2.5 The IT BSC...
- 6.2.6 Finishing the Implementation
- 7 Conclusions
- 7.1 Results
- 7.2 Further Improvements
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This thesis aims to provide a comprehensive understanding of the IT Balanced Scorecard (IT BSC) framework and its application in managing IT departments. It explores the theoretical foundation of the BSC, specifically examining its application within the context of IT departments, analyzing various IT BSC models, and outlining the steps involved in implementing an IT BSC.
- Importance of IT alignment with corporate strategy
- Theoretical foundation of the Balanced Scorecard (BSC)
- Applications of the BSC in IT departments
- Implementation process of an IT BSC
- Comparison of different IT BSC models
Zusammenfassung der Kapitel (Chapter Summaries)
The thesis begins by introducing the significant role of IT in contemporary companies, highlighting the importance of aligning IT departments with corporate strategies. It then delves into the problem definition, examining the structure and processes of a specific IT department. The chapter also explores existing management ratios, setting the stage for the introduction of the Balanced Scorecard (BSC) framework as a tool for performance measurement and strategic management.
Chapter 3 provides a detailed overview of the BSC, outlining its fundamentals, including the four perspectives: financial, customer, internal, and learning & innovation. This chapter explores the BSC's role as a strategic management system, discussing its application in translating vision, communicating and linking, business planning, and feedback and learning. It also examines the concept of strategy maps and implementation steps for a BSC. Additionally, the chapter highlights the advantages of the BSC and addresses its limitations.
Chapter 4 presents alternative approaches to the BSC, such as Gälweiler's Strategic Navigation System and the Stakeholder Scorecard. The comparison of these alternatives to the BSC further strengthens the understanding of the BSC's strengths and weaknesses.
Chapter 5 focuses on the application of the BSC within the IT context, exploring various IT BSC models, including the models of Kütz, Schmid-Kleemann, and Symons. The chapter analyzes their perspectives, strategy maps, and overall effectiveness, concluding with a discussion on aligning IT BSC with the corporate BSC.
Chapter 6 delves into the practical implementation of an IT BSC for the specific IT department examined in the thesis. It outlines the decision-making process and the implementation steps, including the development of a mission statement, vision statement, IT strategy, strategy map, and the IT BSC itself. The chapter concludes by discussing the completion of the implementation process.
Schlüsselwörter (Keywords)
The key focus topics of this thesis include the IT Balanced Scorecard (IT BSC), strategic alignment of IT with business objectives, performance measurement, IT strategy, implementation of strategic management systems, and the comparison of different IT BSC models. The research explores theoretical concepts and practical applications of the IT BSC framework, aiming to provide a comprehensive overview of its potential in optimizing IT department performance and aligning it with the overall business strategy.
- Quote paper
- DI, MBA Peter Hirschbichler (Author), 2009, Implementation of an IT Balanced Scorecard, Munich, GRIN Verlag, https://www.grin.com/document/165294
