Contributed by Rubin Worldwide
Written by Dr. Howard A. Rubin, Professor Emeritus Computer Science City University of New York

This is the second part of a two-part article on IT benchmarking. Part 1 was in the March issue of WSTA Digital News.

Part 2: Benchmark the Future – The Past Has Passed

While everything discussed so far helps an organization calibrate current performance, perhaps more important is benchmarking the future. Today’s world is being shaped by many factors, such as environmental climate change. But there are other forces of business climate change and technology change that have yet to be mapped. Banks (and all companies. for that matter) should lay out their planned trajectories in business and technology dimensions (like latitude and longitude). Here are two examples:



Source: Dr. Howard A. Rubin

Benchmarking an organization’s strategic trajectory in terms of business and technology performance concurrently is critical. With transformation and digitization among the dominant themes in the industry, companies absolutely must benchmark their future competitiveness – the past is simply gone. But imagine undergoing a 3- to 5-year transformation initiative and being less competitive than the company is today. Hence the need to benchmark trajectory in the context of setting targets that literally get the organization to where it wants, and needs, to be.

And, “Follow the Money”

Interestingly enough, the aforementioned trajectory is typically driven by forward-looking investments in technology. “Run” costs impact core economic efficiency, but investment shapes the future. Unfortunately in the age of digitization, the “Run, Grow, Transform” model is no longer enough. It is, in a sense, classifying an investment portfolio into “Cash versus Non-Cash” – simply not enough granularity to have a clear picture of what is going on. So, from both a managerial perspective and a benchmark structure, the following model is a proposed advance:

Source: Dr. Howard A. Rubin

This model allows an organization to consider its legacy and digital profiles of spending in a unified framework and connects the “dots” to business outcomes. As the old commercial said, “Try it, you’ll like it.”

The End for Now – Sort Of

Companies must monitor, calibrate, and optimize investments in real-time according to market conditions and on the basis of new forms of market data, looking at outcomes and not just inputs. They must look at technology economics to gain competitive advantage—before others beat them to the punch.

Benchmarks and benchmarking constitute the market data needed to plot your position and lay in a course for the future while testing your assumptions, making mid-course corrections, and optimizing as the organization progresses.

By integrating benchmarks and benchmarking into the way organizations work – a new business as usual — organizations can become “masters” of their technology economics and not “victims” of them.

Finally, companies should ask themselves, where are we with technology and where are we going AND where is everyone else going as we head to even more technology and digital business dependence?

 

Dr. Howard A. Rubin is Professor Emeritus of Computer Science at City University of New York and an MIT CISR Associate. He can be reached at Howard.Rubin@rubinworldwide.com and +1 914-420-8568.

 

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