Strategy-led reporting can help IT in its ongoing struggle to not just align with business but to help drive change and add value, said Dr Paul Walsh from the Australian Graduate School of Management after a talk at the Australian International Performance Management Symposium in Canberra earlier this month.
Strategy-led reporting is the phrase Walsh gives to the second generation of tools such as the balanced scorecard.
Where the first generation of balanced scorecards simply reported on separate areas such as financial, customer, growth, process and learning; the second generation creates a strategy map to link all the areas and force management to look at the horizons.
"The first-generation tools were more like organizational health checks. They didn't tell you anything about future growth and the basis of your competitive advantage," said Walsh, who wrote the book, book, The Measurement and Management of Strategic Change (Pearson Education, 2005).
Walsh said that strategy-led reporting goes the next step to measure the intangibles that create long-term value.
"Measures must be linked to planning and change as circumstances change, and measures must be causally related to one another. Strategy-led reports should also conform to the principles of Report on a Page (ROAP) so focus on a critical few measures is assured," he said.
"For too long, organizations have concentrated on the tool, namely the Balanced Scorecard, rather the problem, which is the best way to sensibly report back against strategy."
Walsh said IT departments (and all other parts of an organization) need to start thinking about the changes around them, make responses to those changes and build reporting structures that report back to those changes.
Westpac, the University of Sydney, Parliament NSW and Morgan Stanley are some companies that Walsh claims have successfully implemented this next generation of reporting.