3.1 Objectives, Scorecard and Steering

The business technology function should be evaluated like any other business unit. The business technology organisation gets its mandate 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 every individual.

Targets for the business technology organisation are set in line with the overall vision of the company and should 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 any deviations to the business technology steering group.

 

Business technology related objectives

The best practice method for defining incentive targets is the balanced scorecard approach. Incentive policies and the scorecard structure are usually defined at a company level. In most cases, incentives are tied to company-level, sub-organisation-level and individual-level targets.

The table below provides a good set of useful measurements for the whole business technology organisation and for each role, even if the actual targets are organisation and situation specific. The roles 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 success index1

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

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

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

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

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

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

Smart Governance − Number of major security and compliance issues

− Service cost and contract accuracy; based on success index1

1 Success index is calculated for the roadmap, development portfolio, service portfolio, 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 their ambition and measure the business value along these lines:

  • What was the business value created?
  • How much business value was lost as a result of 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. The minimum viable governance aims to make the end-to-end process from demand to service operations as easy as possible, starting from the business needs all the way up to the implementation and deployment of a solution.

The three key principles for a Minimum Viable Governance (MVG) are:

  1. Smart top-down control and coordination to optimise portfolios
  2. Strong leadership and mandate to make decisions and drive business value
  3. Smooth end-to-end flow discipline to create value and escalate decisions only when needed.

The Business Technology Standard proposes three governance levels:

  1. Enterprise level
  2. Value Stream level
  3. End-to-End Flow level

Figure 3.1.1Business Technology governance levels

 

Enterprise level

On the enterprise level the governance bodies implement synergies across value streams. Each governance body has a dedicated focus and role.

Figure 3.1.2 Enterprise level governance steering bodies

 

The Business Technology Steering Group is the highest decision-making body for strategies, budgets, policies and guidelines all of which have an impact on value streams across the organisation. The purpose is to ensure top executives take responsibility for and focus on the mandate given to them. The CIO organises the steering group and ensures efficient preparation for and implementation of decisions.

The Business Technology Management Team forms the CIO’s management team with focus on people, performance, capabilities, quality, risks and costs. It leads the business technology function and builds capabilities and coordinates operations across all value streams.

The Portfolio Steering Group is the highest decision-making body for demand and development portfolios. It provides governance practice guidelines and instructions for the development methodology as well as common tools for end-to-end flows. The portfolio steering is chaired by the executive sponsor, while the business technology portfolio officer (BTPO) organises and runs the steering.

The Service Portfolio Steering Group represents the highest decision-making body for service lifecycles. It coordinates and steers the overall service performance and efficiency while providing governance practices and common tools for service management.

Changes to the enterprise level core architecture are approved by the Enterprise Architecture Steering Group. As the highest decision-making and coordination body for enterprise architecture, it also reviews the value stream level architectures and roadmaps.

The Data Governance Steering Committee is the highest decision-making and coordination body for data governance. It oversees all major data governance activities and is responsible for their support and coordination. The committee coordinates and harmonises data related decisions and development initiatives. It is organised by the Business Technology Data Officer (often called Chief Data Officer) and its members include the Head of Data roles from value streams and contributing businesses.

The Service Integration Steering Group and Change Advisory Board (CAB) authorise service releases and harmonise core service processes to improve service quality and ensure business continuity.

 

Value stream level

At the value stream level individual value streams are characterised by having a specific business focus, for which they create business value.

Figure 3.1.3 Value stream level governance

 

According to the second minimum viable governance principle of strong leadership and mandate, they execute their own portfolio governance based on the resources received from the Enterprise level above. Value streams are therefore free to prioritise according to the tasks that present the most benefit to them.

The ultimate goal for value stream governance is to create business value and maximise business outcomes. To achieve this goal the value stream needs to organise and implement five governance areas:

  1. Capture strategy
  2. Allocate resources
  3. Coordinate demand
  4. Govern the portfolio
  5. Create business value.

 

End-to-end flow level

End-to-end flows are essentially the delivery engines for the expected business value. They can take the form of (i) projects and programs, (ii) agile development teams and (iii) change request-based small development channels. End-to-end flows receive the authority to consume resources from the value stream – the level directly above it.

Figure 3.1.4 End-to-end flow governance

 

The Business Technology Standard defines a generic model to govern the end-to-end flow steps: The steps are distributed over the following four progress zones:

A zone: Capture demand

B zone: Build product / solution / service and its operational readiness

C zone: Release service

D zone: Rollout and release business value.

 

Figure 3.1.5 Business Technology Standard end-to-end flow steps

 

The end-to-end governance is depicted in the upper part of the diagram with its steps or decision points marked in black. It ensures that the required business decisions and commitments are made at the right time. It integrates the end-to-end flow with corporate governance either by having a decision mandate provided by the corporate governance or by escalating the decision to the corporate governance level. Since the end-to-end governance operates at the portfolio level it also provides coordination across the end-to-end flows.

End-to-end flows have unified governance roles to manage demand, development, service release and service quality.