In a
business
Business is the practice of making one's living or making money by producing or Trade, buying and selling Product (business), products (such as goods and Service (economics), services). It is also "any activity or enterprise entered into for ...
or
IT Management context, IT performance management is concerned with measuring the expenditure of
capital and
human resources
Human resources (HR) is the set of people who make up the workforce of an organization, business sector, industry, or economy. A narrower concept is human capital, the knowledge and skills which the individuals command. Similar terms include ' ...
on Information Technology projects. This allows the business to determine how these expenditures improve
strategic and
operational capabilities of the firm in designing and developing products and services for maximum
customer satisfaction
Customer satisfaction is a term frequently used in marketing to evaluate customer experience. It is a measure of how products and services supplied by a company meet or surpass customer expectation. Customer satisfaction is defined as "the number ...
, corporate
productivity
Productivity is the efficiency of production of goods or services expressed by some measure. Measurements of productivity are often expressed as a ratio of an aggregate output to a single input or an aggregate input used in a production proce ...
,
profitability
In economics, profit is the difference between revenue that an economic entity has received from its outputs and total costs of its inputs, also known as surplus value. It is equal to total revenue minus total cost, including both Explicit co ...
, and
competitiveness. This type of IT Performance Management is usually of interest to
executive level IT personnel, all the way up to the
Chief Information Officer (CIO), and is related to
IT Portfolio Management.
Benefits
Direct financial gains
* Focuses IT resources on projects that grow
sales
Sales are activities related to selling or the number of goods sold in a given targeted time period. The delivery of a service for a cost is also considered a sale. A period during which goods are sold for a reduced price may also be referred ...
* Focuses IT resources on projects that reduce
cost
Cost is the value of money that has been used up to produce something or deliver a service, and hence is not available for use anymore. In business, the cost may be one of acquisition, in which case the amount of money expended to acquire it i ...
s
* Aligns IT organization directly behind corporate
financial goals
Improved management control
*Demonstrates the direct business value of each IT project or operation
* Helps
audit
An audit is an "independent examination of financial information of any entity, whether profit oriented or not, irrespective of its size or legal form when such an examination is conducted with a view to express an opinion thereon." Auditing al ...
and
comply with
legislative
A legislature (, ) is a deliberative assembly with the legal authority to make laws for a political entity such as a country, nation or city on behalf of the people therein. They are often contrasted with the executive and judicial powers ...
requirements
* Allows reallocation of IT resources to projects of most importance to the corporation
* Facilitates the elimination of IT projects that are not delivering on expected benefits
See also
*
IT Resource Performance Management
References
{{DEFAULTSORT:It Performance Management
Organizational performance management
Information technology management