Implementation of an IT Balanced Scorecard

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

8 References

Appendix A – The IT Strategy Map

Objective and Research Focus

The primary objective of this thesis is to provide a comprehensive overview of the latest developments regarding the Balanced Scorecard (BSC) framework and to demonstrate how it can be specifically tailored for use within an IT department. The central research question addresses how IT performance and strategy execution can be improved by aligning IT objectives with the broader corporate strategy through a systematic Balanced Scorecard implementation.

• Theoretical analysis of the Balanced Scorecard and its evolution into a strategic management system.
• Evaluation of existing IT-BSC models, including approaches by Kütz, Schmid-Kleemann, and Symons.
• Comprehensive SWOT analysis of an IT department within a major Austrian retailer.
• Development of a strategy map and specific performance measures for the IT department.
• Alignment of IT processes and infrastructure with corporate business objectives.

Excerpt from the Book

Summary of Chapters

1 Introduction: Provides an overview of the importance of IT in modern business and the necessity for aligning IT strategy with corporate goals.

2 Problem definition: Analyzes the specific organizational structure and current performance measurement limitations within the examined IT department.

3 The Balanced Scorecard (BSC): Discusses the fundamental principles of the BSC and its application as a strategic management tool.

4 Alternatives to the BSC: Evaluates alternative management models like Gälweiler’s Strategic Navigation System and the Stakeholder Scorecard.

5 The IT BSC: Explores and compares specific IT-related Balanced Scorecard models developed by Kütz, Schmid-Kleemann, and Symons.

6 Implementation of the IT BSC for the IT department examined: Details the practical step-by-step implementation, including SWOT analysis, strategy formulation, and development of a custom strategy map.

7 Conclusions: Summarizes findings and suggests potential future improvements for the IT-BSC framework.

Keywords

Balanced Scorecard, IT-BSC, Strategic Management, IT Strategy, Strategy Map, Performance Measurement, IT Governance, SWOT Analysis, IT Infrastructure, Cost Management, Process Optimization, Customer Satisfaction, Organizational Alignment, Key Performance Indicators, Innovation Management.

Frequently Asked Questions

What is the core focus of this thesis?

This work focuses on the implementation of a Balanced Scorecard (BSC) within an IT department to improve strategic alignment and performance measurement.

What are the primary thematic areas covered?

The thesis covers IT organizational structures, existing management ratios, BSC theory, alternatives to the BSC, IT-specific BSC models, and the practical application of these concepts.

What is the main goal of this research?

The goals are to provide a thorough overview of current BSC findings for IT and to develop a tailored Balanced Scorecard for the specific IT department of an Austrian retailer.

Which methodologies are employed in the study?

The research uses theoretical literature analysis of management frameworks and a practical SWOT analysis to derive strategic approaches for the IT department.

What topics are discussed in the main part?

The main part examines BSC fundamentals, strategy maps, comparisons of existing IT-BSC models, and the detailed implementation steps including mission and vision formulation.

Which keywords best describe this work?

Key terms include Balanced Scorecard, IT strategy, strategic management, performance measurement, and SWOT analysis.

How is the IT department structured in the case study?

The IT department consists of three primary subdivisions: Operations and Service Management, Technology Management, and Application Management.

Why was the Balanced Scorecard chosen over other models?

The BSC was chosen because it is a broadly recognized and approved tool that facilitates better strategy communication and alignment, even if it requires careful implementation.

What is the significance of the strategy map for the IT department?

The strategy map visualizes cause-and-effect relationships between strategic objectives, helping to align internal IT processes with the goal of cost leadership and business expansion.

What role do external factors play in the IT strategy?

External factors such as the current financial crisis, technological advancements, and the European expansion are critical drivers that the IT department must address to remain effective and efficient.