Total Cost of Ownership (TCO): A Gartner cost optimization and investment justification model that captures the true cost of sustaining an IT asset throughout its useful life. The TCO product/service suite includes a financial model, a methodology, consulting services, best practices and software tools for understanding not only the initial acquisition cost, but the support, maintenance and disposal costs of an asset as it ages. TCO is particularly useful for managing obsolescence, optimizing asset utilization, justifying reinvestment in infrastructure, and finding hidden costs embedded in non-IS-organizational units.
Information Technology Infrastructure Library (ITIL): A well-established, easily accessible, affordable process model for IT service management that is built around a set of best practices. ITIL bundles IS core process definitions into integrated, published sets. ITIL's structure enables incremental adoption, which facilitates continuous improvement. A well-established service and consulting industry has been built around ITIL, especially in Europe. ITIL is better known for its back-office operational process definitions than for its application management processes.
Capability Maturity Model (CMM): An IS process and performance improvement framework that has emerged as a de facto standard for application development and maintenance processes. The CMM is highly prescriptive because it provides diagnostics for assessing an organization's performance on a maturity scale, and it defines objective criteria for reaching subsequent maturity levels. It also captures the processes and process outcomes that are relevant to those maturity levels. However, it does not provide "how to" information. That is, it helps IS organizations identify where they are and what their next goals should be, but does not address how to get there.
Control Objectives for Information and Related Technology (CobiT): A standardized set of guidelines establishing which formal IS processes, practices and controls should be in place and the minimum results they should predictably deliver. CobiT is used predominantly by independent auditors to authenticate the integrity, reliability and security of IT systems and data. Its orientation is risk mitigation. To achieve this, it presents a comprehensive checklist of all IS processes and controls, and establishes guidelines for acceptable performance. CobiT is useful for understanding the universe of IS processes and establishing initial performance targets, but it does nothing to support the goals of continuous improvement or IS service optimization, and the cost of achieving the prescribed level of risk mitigation can potentially exceed the benefit.
Six Sigma: A philosophy and method for improving process outcomes by establishing acceptable levels for defects and modifying processes until the defect level is achieved. Six Sigma is "process-agnostic"; it does not matter which processes are being modified or which outcomes are being monitored. Six Sigma is a generic technique for understanding how to conduct and achieve process improvement while keeping an eye on quality outcomes. As such, it is fairly pragmatic and potentially quite relevant to the execution of process improvement goals. However, because Six Sigma originated in the manufacturing sector, there is an ongoing debate concerning its relevance to service industries and organizations. IS organizations that adopt Six Sigma will likely need to modify it.
ISO 9000: A standard for achieving predictability and repeatability in processes. ISO 9000 is generic and essentially assumes that predictable results mean good results. An organization can be ISO 9000-compliant if it adheres to its documented practices, even though those practices may not produce results that are consistent with even-baseline peer group performance, let alone best-practice performance levels. ISO 9000 introduces discipline and rigor into an environment, but does not support continuous improvement goals or guarantee acceptable levels of performance.
National Awards (such as the Malcolm Baldrige Award): Self-assessment programs for performance improvement sponsored by different countries. These national awards for performance excellence are granted based on criteria such as leadership, process management and business results. These programs provide a consistent framework for defining quality and assessing improvements across a holistic set of drivers (not just process), but they do not provide guidelines on how to achieve quality objectives and improvements.
Scorecards: Reporting and monitoring tools designed to provide a focused, balanced insight into performance by measuring the variables that directly affect required outcomes. Scorecards are generally articulated in business terms by using easily understood measures, such as financial results or customer satisfaction. However, they lack a universal, formally defined structure, content or definition. This absence of standards often means that scorecards are employed to monitor and report things that sound important, without ultimate objectives or causal relationships being defined or understood. This renders them impractical for external comparison, and sometimes limits their roles to reliable communication tools, rather than devices that produce desired outcomes.
