Information Technology Governance through the Balanced Scorecard

Abstract

The balanced scorecard (BSC) initially developed by Kaplan and Norton, is a performance management system that enables businesses to drive strategies based on measurement and follow-up. In recent years, the BSC has been applied to information technology (IT). The IT BSC is becoming a popular tool with its concepts widely supported and dispersed by international consultant groups such as GartnerGroup, Renaissance Systems, Nolan Norton Institute, and others. Purcciafelli et al. (1999) predict that “by 2003, 60 percent of large enterprises and 30 percent of midsize enterprises will adopt a balanced set of metrics to guide business-oriented IT decisions (0.7 probability).” In this chapter, a generic IT BSC is proposed and its relationship with the business balanced scorecard (BU BSC) is established. It is shown how a cascade of balanced scorecards can support the IT governance process and its related business/IT alignment process. Further, the development and implementation of an IT BSC is discussed and an IT BSC Maturity Model is introduced. The chapter concludes with the findings of a real-life case.