3.1 Objectives, Scorecard and Steering

The business technology function should be evaluated like any other business unit. The business technology organisation gets its target from the business technology steering group which, together with the CIO and the business technology management team, decides what the targets are and how they will be measured.

Well-defined targets are specific, measurable and time-related. Targets are set separately for the entire business technology organisation and for each team or unit, as well as for everyone.

Targets for the business technology organisation are set in line with the overall vision of the company and the aim is to support the realisation of the company’s goals. The business technology management team is responsible for achieving and measuring short and long-term targets and reporting results and deviations to the business technology steering group.

 

Business technology related objectives

Scorecard is a best practice exercise to define incentive targets. Incentive policies and scorecard structure are usually defined on a company level. In most cases, incentives are tied to company-level, sub-organisation-level and individual-level targets.

Even if the actual targets are organisation and situation specific, the table below provides a good set of useful measurements for the whole business technology organisation and to each role identity. The role identities are explained in more details in Chapter 3.3 Competence, Roles and Organisation.

IDENTITY MEASUREMENTS
Business Technology − Business stakeholder satisfaction; based on biannual survey

− End-user satisfaction; based on instant service rating

− Total cost and related cost saving targets

Business Excellence −  Approved business value of new ideas and concepts

− Domain roadmap green index1

Enterprise Development − Project stakeholder satisfaction; based on project closing survey

− Project delivery accuracy (schedule and budget); green index1

Digital Development − Sprint flow stakeholder satisfaction; based on major release survey

− Backlog delivery success rate (value and time); green index1

Service Excellence − Number of major incidents or the cost of business down time

− Service delivery accuracy (SLA); based on green index1

Smart Governance − Number of major security and compliance issues

− Service cost and contract accuracy; based on green index1

1 Green index is calculated for the roadmap or development portfolio or service portfolio or backlog or service catalogue with the following formula: [number of items on green (in target)] / [the total number of items].

 

Organisations with mature target setting and measurement practices can increase the ambition level and measure the business value, such as with the following items:

  • What was the created business value?
  • How much business value was lost in incidents?
  • What is the business value of services?
  • How many projects or sprint flows delivered business value?

These kinds of targets are difficult to measure but they set the right mindset for the business technology operations.

 

Steering

The Business Technology Standard introduces the principle of minimum viable governance with the idea of authorising the roles to make prioritisation and feasibility decisions as far as possible. The limits are set by defining evaluation rules defining criteria to be met during the evaluation. If the criteria are not met the decision-making is escalated to one level higher. The next level can be another role holder with wider authorities or it can be portfolio-level instance.

The Business Technology Standard proposes three portfolios:

  • Demand portfolio takes in all development initiatives and authorises the best initiatives to continue and spend some money for the planning and preparation of the development request
  • Development portfolio takes in all development requests and authorises the requests to be implemented based on the (project) plan and business case
  • Service portfolio governs the lifecycle of all service catalogue items; approves new services, decides on service retirement and governs the service performance and business fit.

 

Figure 3.1.1 Governance and steering bodies

 

Demand and development portfolios and managed by the same portfolio steering run by the Development Management Office (DMO) and chaired by the Business Technology Portfolio Officer (BTPO). The service portfolio steering is led by Business Technology Management Officer (BTMO).

In some cases, even the portfolio does not have a mandate to make the go-decision and the request must be escalated to the strategic level.

The Business Technology Standard proposes two strategic level steering bodies:

  • Business technology steering group which is the highest-level decision-making body in business technology and provides the external steering for business technology function. It decides on strategy, targets, budget and on major development topics requested by the business. Depending on the organisation’s corporate governance structure, the business technology steering group either makes the decisions or prepares the decisions to be officially approved by corporate governance bodies. Business technology steering group is led by the highest possible business executive available for the position – in the best scenario by the CEO
  • Business Technology Management Team is led by CIO (Head of BT) and is the highest-level internal steering body for the business technology function. It prepares strategy, targets and budget to be decided by the BT Steering Group and decides on major development topics requested by business technology units. Typical major development topics relate on sourcing, competence development, key position hires and structural changes such as unit and team changes.

In addition to what has been listed above, the Business Technology Standard introduces a few other very relevant steering bodies as listed below:

  • Value stream steering group (one per stream) is led by the nominated business owner and focuses on value stream’s business priorities, decision-making and performance reviews
  • Programme and project steering group (one per programme or project) is led by the nominated business owner and focuses on project’s business priorities, decision-making and performance reviews
  • Service domain steering group (one per service domain) is led by Business Information Officer (BIO) or service owner and decides on the service roadmap and major development topics. It also executes the performance reviews
  • Service integration steering group (one) is led by the Business Technology Operations Officer (BTOO) and focuses on service quality and performance and ecosystem cooperation
  • Change Advisory Board (CAB) (one) is led by the BTOO and focuses on business continuity and approves the service releases
  • Partner steering group (multiple) is led by the Business Technology Governance Officer (BTGO) and focuses on the business value of cooperation with partners and on commercial frames.