There is almost no doubt Michael Jordan agrees with Meta Group‘s conclusion about benchmarking: look in the mirror before looking at others.
“”We have a tendency to go after the leading company in our industry and say we want to
be like Mike,”” says senior vice-president and director of Meta Group’s executive services division Karen Rubenstrunk, referring to the Gatorade commercial.
“”Well, you can’t be like Mike because Mike is often different from you are. Analyze what’s going on in within your company, analyze your own performance trends and use yourself as the most important baseline that you have.””
The Stamford, Conn.-based research company delivered the message in a teleconference on Wednesday about benchmarking a company’s IT portfolio. The concept of looking at IT the way investors look at a financial portfolio has been growing in IT circles, including other research firms like the Giga Information Group and high-tech companies like PeopleSoft.
Rubenstrunk says portfolio management allows a company to determine the values and risks of projects and assets, and define the risks associated with not following a path. The end result, she says, is a thorough understanding of the lifecycle of the assets.
Rubenstrunk says some of the key financial measures are IT spending levels and the ratio between spending and business performance. Another important area is the ratio between spending and business impact. “”We think you need to focus on profiling IT spending as related to the cost of running and growing the business, and they need to change over time, but you can’t know how to change them over time if you don’t know your business strategy.””
Meta Group’s executive vice-president Howard Rubin says benchmarking is about the future as much as it is about the past. He says there are two kinds of benchmarking: static or one offs snap shots of historical data and dynamic, constant flows of information.
“”What companies should aspire to do is really get into the world of high-value creation with benchmarking. That means looking at the appropriate dimensions, get the dynamic data feeds so you’re always calibrating yourself against the moving markets just as you would do with a financial portfolio,”” Rubin says.
“”True measurement is not picking a set of numbers that you find easy to measure. True measurements programs say, ‘What is the vision of this company, what are the objectives and therefore what are the indicators that point me to whether or not I’m making progress?'”” adds Rubenstrunk.
Don’t be seduced, however, into believing the answer to quality benchmarking can be had through technology alone, warns Michael Pedersen, senior vice-president and managing director of Meta Group Consulting. One of the keys, he says, is communication.
“”Buying a tool to do some fancy reporting or capturing every possible metric doesn’t make it happen. You’re going to need to find what are those key measures that indicate performance and then communicate those to the business.””
The Meta Group recently published a report, Managing the Data Center Portfolio, available on its Web site.
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