Drop "on time and within budget" from your management team key performance indicators (KPIs)

"IT managers often make on time and within budget prominent features in KPI templates. However, this target could become counter-productive. For leading organizations with high Capability Maturity Model ratings, on time and within budget should be a default performance criterion, not an objective. For the IT organization to evolve further, IT managers must state goals in enterprise-specific business terms.

In an era of fast-changing, dynamic business environments, projects must change frequently as the business evolves its solutions to respond to rapidly changing market circumstances. When the focus of the IT organization becomes agility, simple slavishness to the "on time, within budget" master becomes an impediment. Sometimes, taking more time and accepting late changes to requirements will be the correct approach. Sometimes, spending more than budgeted on a project (and less elsewhere) will be the correct approach. The issue is to ensure that IT managers know how to make such judgements correctly and are measured on business outcomes, not arbitrary deadlines. Try using "right approach, right outcome" terminology instead — and ensure that "right" refers to measurements that are internally agreed upon and specific to your business (that is, linked to values and policies)."

This advice from a Gartner paper entitled "CIOs' 'Must Do' Resolutions for 2005" by J. Mahoney, M. McDonald, M. Raskino offers some interesting advice for CIOs and for their staff.

In the recent past there has been a great emphasis on measuring outcomes and what this article emphasises is that the outcomes that may be best measured are on an enterprise or a program level rather than on an individual project basis.

This analysis fails to take into account government requirements of its departments and agencies. There is less flexibility with the management of financial resources, than appears to be the case within the private enterprise model. Within government money allocated for a given project must not be used for other purposes. This form of instruction effectively hamstrings managers who opt to work within a program or an enterprise wide view of the organisation and forces them to focus attention on the micro management impact - i.e.at the project level without necessarily being able to take into account the broader more program or enterprise view.

Perhaps some discussions with the Department of Finance are called for in this area of work to assist in the creation of some mechanisms which do not lead to the abuse of the generic financial guidelines but which do support the ability of government departments and agencies to become the agile organisations that government would like to see develop.

Sometimes it is really difficult to make an omelette without breaking some eggs and perhaps it is time to review some of the sacred cows of government finance management and bring these processes into the 21st century.

I am not suggesting that there should be open slather and that levels of fiscal accountability fall to the levels that enabled HIH or ENRON to take place. I am suggesting however that some flexibility and agility is also built into the financial processes such that government agencies that have provided costings in good faith using due care and diligence are then not penalised when unforeseen events happen. This should be managed in the risk management approach to governance that is advocated elsewhere rather than the more inflexible measures that appear to be in place at present.