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Governing IT 

Governing IT

 

 
 
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Slide 1: Governing IT Louis Boyle Vice President Gartner Executive Programs Notes accompany this presentation. Please select Notes Page view. These materials can be reproduced only with written approval from Gartner. Such approvals must be requested via e-mail: vendor.relations@gartner.com. Gartner is a registered trademark of Gartner, Inc. or its affiliates.
Slide 2: Agenda • Definitions & context • IT Governance Framework - What – the decisions - Who – the deciders - How – the mechanisms - Implementation – change management/communications • Key Success Factors • Case Study • Q&A
Slide 3: Effective IT Governance Is Critical, But Difficult To Achieve - Smart IT governance helps enterprises deal with complexity - But both business and IT governance are poorly understood . . . top level IT governance just happens - IT governance is ‘the assignment of decision rights and the accountability framework to encourage desirable behavior in the use of IT’ (Weill, 2001; Broadbent & Weill, 1998) - Defining desirable behaviors takes time, effort, focus . . . cost savings, innovation, growth, reuse, sharing - Effective IT governance is not ‘one size fits all’ . . . differs by business objectives, behavior sought - IT business value directly results from effective IT governance . . .Firms with superior IT governance have at least 20% higher profits (ROA) than firms with poor governance given the same strategic objectives. © 2002 MIT Sloan Center for Information Systems Research (Weill) and Gartner, Inc.
Slide 4: High Governance Performers Have Sharper Strategies, Focus And Commitment* • Characteristics of High IT Governance Performers - More focused strategies • Greater differentiation between customer intimacy, product innovation, or operational excellence - Clearer business objectives for IT investment • Greater differentiation between supporting new ways of doing business, improving flexibility, or facilitating customer communication - High level executive participation in IT governance • Greater involvement, impact of CEO, COO, Business Heads, Business Unit CIOs and CFO • Who could accurately describe IT governance arrangements - Stable IT governance, fewer changes year to year - Well functioning formal exception processes *Statistically significant relationship - Formal communication methods with governance performance © 2002 MIT Sloan Center for Information Systems Research (Weill) and Gartner, Inc
Slide 5: What is IT Governance and what does it address within an organization? IT governance specifies decision rights and creates an accountability framework that encourages desirable behavior in the use of IT Governance approaches should be based on the degree of enterprise commonality that exists, the urgency of required responses and the frenzy (and pressure) to perform. Consequently, Gartner recommends tailoring and balancing general-purpose management models to meet unique organizational needs. op Level IT Governance Addresses Three Major Components: . What decisions need to be made? . . . decisions about major IT domains • • • • • • IT Principles IT Infrastructure Strategies IT Architecture Business Application Needs IT Investment and Prioritization External Relationships Balancing the IT Management Triad IT as a backoffice utility overhead IT as a business enabler and competitive weapon Vision and Business Alignment . Who has decision and input rights? . . . Rights are exercised in different governance styles • Monarchy, Feudal, Federal, Duopoly, Anarchy • IT policy? • IT strategy? • Governance? • Shared services? . How are the decisions formed and enacted? . . . Multiple mechanisms make governance work • • • • • Decision Making Councils (e.g., Office of CIO) Business/IT Relationship Managers Process Teams Service-Level Agreements Chargeback Arrangements Funding, Budgeting and Pricing Staffing and Organization • Reinvestment? • Application prioritization? • Continuous migration? • Outside suppliers? • Roles and responsibilities? • Process? • Compensation? • Retention?
Slide 6: Administrative Process Map: IT Governance Aligns these Processes Political Agenda Business Strategic Plan Business Case Inputs • Organizational Capacity • Cost • Time • Risk • Procurement • Portfolio Performance IT Strategic Plan Cross-Agency Prioritization Investment Budget Cutting Desires Budget Strategic Sourcing Human Resources Acquisition Decisions Project Management Corporate Performance Management Tactical Execution Service Delivery
Slide 7: IT Governance and Management Are Not the Same What IT Governance Is: Collective decisions and guidance about:  How What IT Governance Is Not:               IT should be used in the business (policies, principles) makes What decisions How (clear accountabilities) cases and investments (priorities, ownership and benefits realization)  Who  Business Internal IT operations IT people management IT contract management Internal IT organization Project management System testing Audits Procurement of hardware Facilities management Documentation and training Client satisfaction Benchmarking Capacity planning Resource management
Slide 8: What Are the Key Components that Make Up IT Governance? An IT Governance framework usually comprises the following components:  Structural Model • • •  Mission - Purpose and approach to managing the IT organization IT Organization - Structure, reporting relations and connections between resources and their counterparts across the IT organization Roles & Responsibilities - Definition of work requirements and the Office of the CIO groups/individuals to perform them Process BU Proposal Requirements Assessment Specification Design Build/Buy Test BU CIO Project Manager BU AD team Managers CIO Functional Management Operational Model • Processes - Pre-defined activity flow for necessary actions and creation of outcomes Measures - Accountability mechanisms at all levels Policies - Pre-defined decision on boundaries, standards, latitude Information and analysis to inform decisions Office of Integration Project Office Development Services Relationship Manager Project Manager Functional AD team Office of Architecture, Standards & Planning • • Competency Centers Network and Data Design Change Management “Exotics” (Multimedia, Intranet) Infrastructure and Production Support Maintain Support Shared Services Systems - Network - Data - Applications Asset Management - Operations Help Desk and Local/Peer Support • Customer / End User
Slide 9: Top IT Governance Mechanisms Focus On Business And IT Relationships IT Governance Mechanism Effectiveness Business/IT relationship managers IT leadership committee IT council of business and IT executives Executive committee Process teams with IT members Tracking of IT projects and resources Service level agreements Capital approval committee Architecture committee Formally tracking IT’s business value Web-based portals, intranets for IT Chargeback arrangements % respondents using 85 87 71 89 86 96 89 56 67 62 79 62 1 Not © 2002 MIT Sloan Center for Information Systems Research (Weill) and Gartner, Inc. 2 3 Effectiveness 4 5 Very
Slide 10: The Three Components of IT Governance 1. What decisions need to be made? 2. Who makes them? 3. How are they made?
Slide 11: 1. What Decisions Need To Be Made? . . Clarify Five Major IT Decision Domains IT Principles IT Infrastructure Strategies IT Architecture High level statements about how IT is used in the business Strategies for the base foundation of budgeted-for IT capability (both technical and human), shared throughout the firm as reliable services, and centrally coordinated (e.g., network, help desk, shared data) An integrated set of technical choices to guide the organization in satisfying business needs. The architecture is a set of policies and rules that govern the use of IT and plot a migration path to the way business will be done (includes data, technology, and applications) Business applications to be acquired or built Business Application Needs IT Investment and Prioritization Decisions about how much and where to invest in IT including project approvals and justification techniques © 2002 MIT Sloan Center for Information Systems Research (CISR). This material is adapted from Weill & Woodham's work originally published and copyrighted by the MIT Sloan CISR as Working Paper No. 326, "Don't Just Lead, Govern: Implementing Effective IT Governance," April 2002, and is used by Gartner with permission.
Slide 12: Defining IT Principles/Policies • Characteristics of effective principles/policies - Actionable — facilitate decision making - Succinct — express a focused point of view - Appropriate specificity: not too general ("Motherhood and Apple Pie "); there must be a compelling alternative - Clear implications — adhering or not adhering to the principle/policy should have consequences - Relevant — address the specific business context of an enterprise (business trends, IT trends, corporate culture and values) • Components of principles/policies - Principle statement - Rationale - Implications
Slide 13: 2. Who Has Decision Rights And Inputs? . . Rights Exercised In Six Governance Styles Style Business Monarchy IT Monarchy Feudal Federal Duopoly Anarchy Who Makes The Decisions? C-level executives, as a group or individuals, including the CIO (but not acting independently) Individuals or groups of IT executives Business unit leaders or their delegates C-level executives and at least one other group. (Equivalent to the center and states working together) IT executives and one other group (eg CXO or BU leaders) Each individual business process owner or end user Note: Some Governance styles were inspired by Davenport, 1997. © 2002 MIT Sloan Center for Information Systems Research (CISR). This material is adapted from Weill & Woodham's work originally published and copyrighted by the MIT Sloan CISR as Working Paper No. 326, "Don't Just Lead, Govern: Implementing Effective IT Governance," April 2002, and is used by Gartner with permission.
Slide 14: 3. How Can IT Governance Arrangements Be Represented? Domain Style IT Principles IT Infrastructure Strategies Business Monarchy IT Monarchy Feudal Federal Duopoly Anarchy Don’t Know ? Business IT Application Architecture Needs IT Investment © 2002 MIT Sloan Center for Information Systems Research (CISR). This framework is adapted from Weill & Woodham's work originally published and copyrighted by the MIT Sloan CISR as Working Paper No. 326, "Don't Just Lead, Govern: Implementing Effective IT Governance," April 2002, and is used by Gartner with permission.
Slide 15: IT Governance — Example of Domains, Decision Rights and Styles Domain Style IT Principles Input Decision IT Infrastructure Strategies Input Decision IT Architecture Input Decision Business IT Investment and Application Needs Prioritization Input Decision Input Decision Cap appr comm Business Monarchy IT Monarchy Feudal Federal Duopoly Exec comm Biz leaders Exec comm IT leadership Exec comm Biz leaders CIO IT leadership CIO IT leadership Biz leaders Biz pro own Biz leaders Biz leaders Biz pro own Biz pro own Biz/IT rel mgs Exec comm Biz leaders Governance Mechanisms • Exec comm • Biz leaders • IT leadership • Executive committee ("C" levels) • Business unit heads/presidents • CIO, CIO's office and biz unit CIOs • Biz pro own Input rights • Cap appr comm • Biz/IT rel mgs Decision rights • Exec comm subgroup, includes CIO • Business process owners • Business/IT relationship managers © 2002 MIT Sloan Center for Information Systems Research (Weill) and Gartner, Inc. drawing on the framework of Weill and Woodham, 2002.
Slide 16: Business And IT Executive Collaboration Mark High IT Governance Performers Domain IT Principles Style IT Infrastructure Strategies IT Architecture Business IT Investment and Application Needs Prioritization Business Monarchy IT Monarchy Feudal Federal Duopoly Anarchy 1 2 3 Top three patterns of high IT governance performers © 2002 MIT Sloan Center for Information Systems Research (Weill) and Gartner, Inc, drawing on the framework of Weill and Woodham, 2002.
Slide 17: Six Guiding IT Principles What IT decisions are made 1. IT will enable and provide strategic value to the business. 2. IT architecture & standards shall be governed at the enterprise level to ensure integrity, planned evolution, and periodic refresh in light of new technologies and business strategies. 3. Information is our business, so data is one of our most valuable assets. It must be accessible, managed and protected accordingly. 4. IT will reuse before it buys and buy before it builds. 5. As new applications are developed, we will strive to create reusable components and processes (in line with the architecture) to facilitate business reuse where appropriate. 6. IT will strive to reduce complexity in the the technology environment.
Slide 18: IT Will Enable and Provide Strategic Value to the Business  Rationale • • • • • • • • • • • IT Services and Solutions must meet business needs and help drive value.  Implications IT will be “students” of the business – to provide appropriate technical solutions and support, IT must understand the business IT will manage appropriately within established budget IT will make provisions to ensure Business is an educated consumer of IT Products and Services IT Application Leadership will engage with Business in business strategy, planning, and management IT will partner with Business Unit leadership to support enterprise requirements and business solutions Business processes need to be optimized to obtain full benefits of technological solutions IT Business Relationship Managers will represent all facets of the IT function to the Business Units IT will provide business “consulting” services (alternatives, pros, cons, recommendations) as a partner to its business clients IT will evaluate alternative technological and sourcing approaches to provide business solutions IT must be “easy to do business with” - make IT easy to navigate for business colleagues
Slide 19: IT Governance Mechanisms How the Decisions Get Made Business Application Needs Domain Style - Major Decisions Addressed • • Rule of 7 Only those decisions that the governing entity reserves clearly and completely for itself, with no delegation Business App Needs Input Decision Business Monarchy IT Monarchy Feudal Federal Duopoly Anarchy - Mechanism • • • • Input Forum Decision Forum Trigger: Regularly scheduled at xxx interval, or reactive based on yyy Sponsor - Metrics • Minimum metrics to ensure successful operation and compliance Input rights Decision rights Refer to Exception process for more information - Compliance • • “Loop-closing” mechanism MUST fit the culture
Slide 20: Sample IT Governance Mechanisms How the Decisions Get Made Exception Process Exceptions to the IT Governance processes should be very rare and well-justified. In cases where an involved party has significant issues or concerns regarding a decision reached via the IT Governance processes, the following process should be followed: - For Senior Management Team decisions CEO makes final decision - For Senior Management Team, CIO & ITLC decisions Sr. Leader (or designee) approaches appropriate ITLC member with specific circumstances CIO & Sr. Leader formally approve exception Escalate to CEO, if necessary - For Business Unit Leaders decisions Sr. Leader approaches Application Head with specific circumstances CIO & Sr. Leader must formally approve exception Escalate to CEO, if necessary
Slide 21: Implementing IT Governance Communications/Change Management Components • • • • Executive (CEO leadership team meetings, COO leadership team meetings) socialization presentations, discussions Executive announcement ‘Elevator speech’ (COO to CEO & CEO direct reports) Executive summary slide deck BRM (business relationship manager) communication tools - Slide deck - Suggested talk track - Suggested email announcement - FAQs • Core team continued availability during above
Slide 22: Key Success Factors for IT Governance • The full buy-in of the CEO & direct reports is required • Clear participation of the business (it’s all about governing IT) - A willingness between Corporate and the business units as well as across business units to cooperate and to develop a solution that is supported by all is essential • Existing organizational and decision making structures can’t be sacred cows as they will be questioned and likely modified • The project can’t be treated as an IT project • Formal change management needs to be part of the work • Communicate, communicate, communicate • Minimal “loop closing“ is required to ensure compliance
Slide 23: Typical Benefits of Implementing an IT Governance Framework • Enhanced alignment between the Business and IT • Improved IT decision-making & communications - Overall clearer - More efficient as decisions and communications are quicker and more costeffective - More effective as the right decisions get made • Improved perception of value of IT • More focused strategies • Clearer business objectives for IT investment • High level executive participation in IT governance • Stable IT governance, fewer changes year to year • Well functioning formal exception processes • Formal communication methods
Slide 24: Typical Project Timeline • The following presents a more or less typical timeline for projects of this nature: Milestones Project Planning Governance Requirements Identification Governance Design Transition Month 1 Month 2 Month 3 • Depending on the specifics of the project, a more detailed timeline will have to be developed
Slide 25: Example • Summary of Case Study
Slide 26: Effectiveness Short Form Self-Assessment IT Governance Effectiveness Indicators 1. We have strongly differentiated business strategies 2. We have clear business objectives for evaluating every type of IT investment 3. Executives are engaged in IT governance and can describe these arrangements 4. Our IT governance is stable, with few major changes year-to-year 5. We use well-defined, formal IT exception processes 6. We use multiple formal communication methods to engage business leaders 6 or less (no effective IT governance) 10-13 (maturing IT governance) Disagree Strongly (Score 0) Disagree Somewhat (Score 1) Agree Somewhat (Score 2) Agree Strongly (Score 3) 0 0 0 0 0 0 1 1 1 1 1 1 2 2 2 2 2 2 Total 3 3 3 3 3 3 7-9 (low-level IT governance) 14+ (top performer, guard against complacency) © 2002 Gartner, Inc. and MIT Sloan Center for Information Systems Research (Weill)
Slide 27: Assess Your IT Governance Effectiveness Long Form Self-Assessment Assess your current position on a journey into the future. For each area, rate these factors, where 1 means strongly disagree, 5 means strongly agree. Decisions 1. Clarity about decision rights 2. Consistency 3. Strong business cases 4. Business roles clear 5. Appropriate committees 6. Optimized budgets 7. Architecture plan Relationships 1. Clear links to corporate governance 2. Strong and trusted teamwork between business and IT 3.Strong and trusted teamwork within IT Directions 1. Aligned strategies 2. IT strategy known 3. Defined IT principles 4. Risks assessed & managed 5. Business value understood 6. Performance metrics clear
Slide 28: Implementing IT Governance – General Project Approach • Plan it, work it! - Game plan, self-assessment, project plan • Establish IT Governance Principles based on overall IT strategy • Evaluate effectiveness of current IT Governance-like mechanisms, if any do exist either within Corporate or the business units • Develop Governance processes as appropriate (structural and operational model) • Establish clear relationship between the various IT Governance components • Validate IT Governance framework and processes with Business Owners • Implement new IT Governance framework - Roll out to all of IT & Business - Thorough communications & PR campaign • Establish IT Governance oversight role to monitor processes, effectiveness, and compliance
Slide 29: Q&A ? !
Slide 30: Appendix – Sample Deliverables
Slide 31: Example Topics for IT Principles/Policies   Governance Investment Evaluation Criteria Investment Decision Making Funding Cost Allocation Benefits Realization         Architecture Project Management Privacy Procurement Operational Risk Business Continuity Security Organizational Development    
Slide 32: Summary of Case Study • List of 6 guiding principles • Details - principle 1 • Details - principle 2 • Governance arrangements matrix • Details for one IT governance mechanism • Exception process • Communications process
Slide 33: Sample of Six Guiding IT Principles What IT decisions are made 1. IT will enable and provide strategic value to the business. 2. IT architecture & standards shall be governed at the enterprise level to ensure integrity, planned evolution, and periodic refresh in light of new technologies and business strategies. 3. Information is our business, so data is one of our most valuable assets. It must be accessible, managed and protected accordingly. 4. IT will reuse before it buys and buy before it builds. 5. As new applications are developed, we will strive to create reusable components and processes (in line with the architecture) to facilitate business reuse where appropriate. 6. IT will strive to reduce complexity in the the technology environment.
Slide 34: Sample IT Principles - 1 What IT decisions are made • IT will enable and provide strategic value to the business Rationale IT Services and Solutions must meet business needs and help drive value Implications IT will be “students” of the business – to provide appropriate technical solutions and support, IT must understand the business IT will manage appropriately within established budget IT will make provisions to ensure Business is an educated consumer of IT Products and Services IT Application Leadership will engage with Business in business strategy, planning, and management IT will partner with Business Unit leadership to support enterprise requirements and business solutions Business processes need to be optimized to obtain full benefits of technological solutions IT Business Relationship Managers will represent all facets of the IT function to the Business Units IT will provide business “consulting” services (alternatives, pros, cons, recommendations) as a partner to its business clients IT will evaluate alternative technological and sourcing approaches to provide business solutions IT must be “easy to do business with” - make IT easy to navigate for business colleagues
Slide 35: Sample IT Principles - 2 What IT decisions are made • IT architecture & standards shall be governed at the enterprise level to ensure integrity, planned evolution, and, periodic refresh in light of new technologies and business strategies - Rationale - A satisfactory control environment is dependent on meeting enterprise architecture and standards with the aim of reducing permutations of technology and enforcing change management - Research and development into new technologies is a costly investment. Sharing the cost among enterprise activities may permit more technology exploration and further the exploitation of promising technologies. Economies of scale can be realized by sharing architecture and standards as guidelines - Only through local unit compliance with enterprise architecture and standards will we achieve the required integrity planned evolution and refresh of our technology base - Implications - The creation of and adherence to standards are the joint responsibility of all IT organizations - We will strive for consistent and single standard IT processes including: change management, IT security standards, disaster recovery, ID management, development methodology - Business specific architecture and IT architecture shall align with the Enterprise Architecture (EA). EA shall be our architecture - Changes or modifications to the EA architecture will be governed at the greater enterprise-level - Enterprise views toward an architectural design or standard such as those effecting compliance and regulatory needs (e.g., SOX, Privacy) must be considered when designing a technology solution - Only one IT project methodology shall exist - Continuing investment must be made to keep our infrastructure environment current - Infrastructure services are managed at an enterprise level
Slide 36: Sample IT Governance Arrangements Matrix Who makes the decisions Overall IT Infrastructure IT IT Principles Strategies Architecture Input Decision Input Decision Input Decision Domain Style Business App Needs IT Investment / External Prioritization Relationship Decision Input Decision Input Decision Input Senior Mgmt. Team CIO / Ent IT BU Leaders ITLC Senior Mgmt. CIO & ITLC * Input rights Decision rights * CIO has “Veto” rights Senior Mgmt Team CIO / Ent IT BU Leaders Corporate office (CEO and Staff) CIO office and Enterprise IT Leaders from the Business Units ITLC Senior Mgmt & ITLC IT Leadership Council (includes App Head) Combined Corp Office and IT Leadership © 2002 Gartner, Inc. and MIT Sloan Center for Information Systems Research (Weill) drawing on the framework of Weill and Woodham, 2002.
Slide 37: Sample IT Governance Mechanisms How the Decisions Get Made • • Business Application Needs (Governed by each Business Unit / Function independently) Domain Style Business App Needs Input Decision - Major Decisions Addressed * Approve application strategy and direction Determine appropriate application resource allocation; resolve major resource conflicts Propose significant application initiatives and projects Approve and prioritize application initiatives and projects (within parameters established by Prioritization process) Sponsor major projects to the Prioritization process Provide oversight for significant initiatives and projects Approve business risk mitigation tactics and strategies (with app impact) Senior Mgmt. Team CIO / Ent IT BU Leaders ITLC Senior Mgmt. CIO & ITLC - * - Mechanism Input Forum: ITLC meetings or CIO staff meeting Decision Forum: Regularly scheduled business unit leadership meetings (one per Business Unit / Function) Trigger: Regularly scheduled (no less than quarterly) Sponsor: Application Head Input rights Decision rights * CIO has “Veto” rights Refer to Exception process for more information
Slide 38: Sample IT Governance Mechanisms How the Decisions Get Made Exception Process Exceptions to the IT Governance processes should be very rare and well-justified. In cases where an involved party has significant issues or concerns regarding a decision reached via the IT Governance processes, the following process should be followed: - For Senior Management Team decisions CEO makes final decision - For Senior Management Team, CIO & ITLC decisions Sr. Leader (or designee) approaches appropriate ITLC member with specific circumstances CIO & Sr. Leader formally approve exception Escalate to CEO, if necessary - For Business Unit Leaders decisions Sr. Leader approaches Application Head with specific circumstances CIO & Sr. Leader must formally approve exception Escalate to CEO, if necessary
Slide 39: Sample IT Governance Communications Components • • • • Executive (CEO leadership team meetings, COO leadership team meetings) socialization presentations, discussions Executive announcement ‘Elevator speech’ (COO to CEO & CEO direct reports) Executive summary slide deck BRM (business relationship manager) communication tools - Slide deck - Suggested talk track - Suggested email announcement - FAQs • Core team continued availability during above Return
Slide 40: Sample IT Governance Design Enterprise Architecture Example Mechanism, Roles, Process IC Director XYZ IC Directors IC Directors Directors IC Directors Advice for EA Funding FARB FARB Technical Advice for EA Funding or Appeals IT BOG IT BOG ILL ST U IV E AT R Exception Evaluations-minor EA Updates for Approval Architecture Architecture Review Board Review Board Exception Evaluations-major XYZ CIO Guidance Leadership Office of the Office of the Exception Advice Chief IT Architect Chief IT Architect Advice Requests Project Teams IT Architecture IT Architecture Domain Teams Domain Teams ICCIOs ICCIOs
Slide 41: Sample IT Governance Design Clarifying Roles & Responsibilities • RACI analysis clearly defines who is Responsible, Accountable, Consulted, Informed on all decisions, activities, etc. WCIT Services Organizational Function Catalyst Ops Group Center R R R I R R Bus Supt Team A A A R Central Service R Tech Supt R R R Tech Eng. IT IT Plan Client Mgmt ing Team C,I C,I C,I R R I I I A C,I C,I R R R Application Operations Support - no code changes Application Maintenance - fix bugs Application enhancements Application Development – In-house development, purchased Apps., application integration Local Application Development and support Level-1 Support • • • • • • Resolves common problems associated with desktops, servers, Applications, etc. Hardware Break/Fix Is accountable for the problem resolution Change management coordination Security administration Central Help Desk ILL I ST U R I AT R A R IV E C,I I R C,I R A • Interfaces to 2nd level and Business Support Team Level-2 Support • • Resolves more complex problems associated with desktops, servers, others. Accountable to Level-1 R C,I A C,I C,I R • Recommends new configuration. Formal Client Training (remedial, operational) Client Consulting • • Help client select new local software Provide consulting on IT foundation technology and standards. Evaluate base cost increase to IT (if any) I I I R A C,I I I C,I I C,I I I A C,I R R •
Slide 42: IT Governance Operations — Making It Work (What Should IT Work On?) Demand Governance Business Management Primary Responsibility Plan Biz/IT Strategy Validation IT Governance Strategy IT Governance      Goals Domains Principles Decision Rights Styles (How Should IT Do What It Does?) Supply Governance IT Management Primary Responsibility IT Governance Operations Implement Develop Demand Governance Processes Demand Governance Implementation Manage Business Unit Prioritization Monitor Spending/Project Oversight Security IT Supply Governance Domains Plan Implement  Manage  Monitor Compliance   Architecture Plan Implement  Manage  Monitor Compliance   Biz/IT Operational Planning Intra-/InterEnterprise Prioritization Business Benefits Realization Corporate Compliance Plan Implement  Manage  Monitor Compliance   Project Management Plan Implement  Manage  Monitor Compliance   Overall IT Investment & Expense Councils/ Committees Issue Escalation/ Resolution IT Value Assessment Sourcing Plan Implement  Manage  Monitor Compliance   Procurement Plan Implement  Manage  Monitor Compliance   IT Investment Portfolios (PPM) Investment Evaluation Criteria IT Service Chargeback IT Service Funding IT Gov Effectiveness (Metrics, etc.) Etc. Plan Implement  Manage  Monitor Compliance   Board IT Governance
Slide 43: Best Practices for Governance When Governance Isn’t Governed • Use a stick: Threat of auditor, Sarbanes-Oxley, Basel II… • Use a club: How would CFO look at these actions? Do they insert more risk and lower ROI? Under FOIA (Freedom of Information Act), does this pass the newspaper test? • Use a carrot: Advertise the joint success of IT and SBU on a particular initiative and why it helped governance. • Use chocolate: Make the advertised success addictive, and this is what we are looking forward to later ... • Use secret sauce: CIOs can be slightly off-center (devious) by stating that service-level architecture or Web-based infrastructure requires greater transparency, much like FedEx allows customers to see where packages are and estimated times of arrival, which is why FedEx’s IT is bullet-proof.
Slide 44: More Symptoms of Good IT Governance • • • • • • • • • • • • • Decisions Score Clarity There is clarity about who makes strategic decisions about IT — Investment IT investments are evaluated and approved using consistent criteria — Approval Project IT projects deliver results consistently in accord with the business case — Implementation Business Business executives clearly understand their roles in IT decisions — Roles Committee Appropriate committees are in place, with clearly documented roles — Structures Budgets The IT budget process is aligned with business and IT strategies — Enterprise Architecture exceptions have a defined process for approval — Architecture • • • • • • • • • • • Directions Alignment There is clear alignment between business and IT strategies — IT Strategy The IT strategy is clear to all affected stakeholders — IT Principles There is a clear set of IT principles underlying decisions that are clear to all — Risk IT risks are understood by all stakeholders and managed effectively — Management Business The business value of IT is tracked, understood and communicated — Value IT Metrics IT metrics highlight critical success factors for performance management — Relationships Corporate IT governance is clearly linked to corporate governance — • • Governance Trust There are strong and trusted relationships between business and IT
Slide 45: IT Governance Maturity Checklist - Life-cycle PfM - Business architecture - Market agility • Advanced - Enterprise PMO - Project PfM - Info architecture Transformation • Good - Project prioritization - Asset portfolio management (PfM) - Independent audit Respect Trust Cost • Basics Review boards Regular audits Universal controls Standards Credibility of IT Governance Do you plan, build, and run as one body? Business Perception of Its Dependency on IT Governance • World-class Efficiency Effectiveness Investment

   
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