IT Department performance:
financial, but not only…

20 juillet 2023 | ACTUALITÉS, Cigref in english, Communiqués, Publications du Cigref

The digital transformation of businesses has never been so rapid, whether it’s to meet their growing needs, to better manage and exploit company data or to offer an improved customer experience. This transformation is generating an ever-increasing number of projects for the IT Department, but also a growing and constant demand for new and ever more innovative services, and is therefore creating real challenges in terms of performance. Facing these challenges, CIGREF and the DFCG (Association Nationale des Directeurs Financiers et de Contrôle de Gestion), the national association of Chief Financial Officers and financial controllers, have joined forces to co-lead this working group on the financial and non-financial performance of IT Departments, led by Franck Boudignon (Groupement des Mousquetaires – Cigref), Jean-Claude de Vera and Frédéric Doche (DFCG).

Ce rapport existe également en français.

A performance management approach conducted within an information systems department demonstrates that this department is not just a cost centre, but that, like the other departments in the organisation, it creates value, in both financial and non-financial terms. For this approach to succeed, it must be carried out in collaboration with the Finance Department and the departments that use the IS, and be based on the Group’s strategic orientations.

The aim is to put in place IT governance that is not solely focused on costs. Like all other corporate functions, the IT Department cannot be reduced to its financial assessment. Providing transparency and clarity around its data and processes is one way of demonstrating its added value. However, the financial aspect should not be neglected, and should mainly consist of demonstrating that the budgets allocated are under control. To do this, the IT Department needs to develop reliable and transparent financial indicators. It can also rely on a model for reading IT costs.

From an extra-financial point of view, the added value of the IT Department is more easily apprehended in the context of projects. Nevertheless, the correct day-to-day operation of the organisation’s information systems in a secure environment – in other words, the primary function of the IT Department – should in itself be considered as added value.

A performance approach that takes into account financial and non-financial issues is also a way of bringing some of the benefits and value of a project back to the IT Department, whereas these are currently mainly obtained and collected by the user departments.

The aim will often be to build a performance dashboard for the IT Department. The choice of indicators for the dashboard should be based on the organisation’s priorities. However, it is advisable to limit the number of indicators in order to focus on the most important objectives. The form of the dashboard is also crucial if it is to be appreciated, but it should not be overly burdensome in the early stages. The production of this dashboard should eventually be industrialised.

Managing IT Department performance obviously does not stop at the dashboard, but rather becomes part of a process of continuous improvement for the IT Department. By setting objectives and measuring progress and gaps, it enables decisions to be taken based on the issues at stake and the resources available. A quantitative comparison within your sector will help you to identify performance drivers. Lastly, a qualitative comparison between different sectors enables you to learn about best practice. The ability to benchmark will therefore be an important element in this continuous improvement process.

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