IT Governance – Executives are from Mars, IT management is from Venus

1. IT Governance – Executives are from Mars, IT management is from Venus Peter Hidas

2. IT Management Evolves —IT Governance Becomes a Critical Enabler Business managers with a functional responsibility for IT 2012 High IT Governance Impact IT Leadership Focus IT managers supporting business management 2006 Low Internal Efficiency and Control Partnerships, Agility, Global Business Ecosystem Company Leadership Focus Governance = styring Management = få utført det som er bestemt

3. Key Issues • How can IT governance be described pragmatically in terms of its scope and application? • How do I develop the best IT governance strategy for my organization? • What are best practices for implementing IT governance effectively?

4. IT Governance • IT governance is made up of processes with activities, inputs, outputs, roles and responsibilities • IT's role is identified as "ensuring" as opposed to "executing" • The goals of IT governance are business goals • Key performance measures are effectiveness and efficiency "The processes that ensure the effective and efficient use of IT in enabling an organization to achieve its goals"

5. IT Demand Governance: The CIO's View … • IT governance, broad in scope, a high-impact issue, a senior management operating responsibility • However, business doesn't understand its responsibilities; therefore, it isn't committed, accountable or fully engaged • IT governance is getting better, but going only from bad to neutral • Business management's lack of understanding is a key inhibitor, but no compelling change is planned • Business management and IT management each see IT governance as a way to control the other Source: Gartner CIO IT Governance Survey, 2005

6. … Of a Persistent Challenge "To what extent is each of the following a priority for you in 200X?" 2004 2006 2005 Delivering projects that enable business growth Delivering projects that enable business growth Delivering projects that enable business growth Linking business and IT strategies and plans Linking business and ITstrategies and plans Linking business and IT strategies and plans Demonstrating the business value of IS/IT Building business skills in the IS organization Improving the quality of IS service delivery Demonstrating the business value of IT Applying metrics to IS organization and services Attracting, developing and retaining IS personnel Demonstrating the business value of IT Attracting, developing and retaining IS personnel Tightening security and privacy safeguards Applying metrics to the IS organization and IT services Providing new types of information (for example, analytics) Improving business continuity readiness Improving the quality of IS service delivery Improving the quality of IS service delivery Developing or managing a flexible technology Consolidating the IS organization and operations Flexible technology infrastructure Improving IT governance Building business skills in the IS organization Developing leadership in the senior IS team Improving IT governance Leading change initiatives (involving more Consolidating the IS organization and operations Improving IT governance Source: Gartner Executive Programs' Annual CIO Survey

7. IT Governance Strategy • IT Governance • Goals • Domains • Principles and Policies • Decision and Input Rights Supply Governance Demand Governance IT Governance Operations How Should IT Do What It Does? What Should IT Work On? Business Primary Responsibility IT Management Primary Responsibility IT Governance — What Are the Components?

8. Principles/Policies: How? How should we view the use of IT in the business? Goals: Why? What do we want to achieve through IT governance? Domains: What? Which areas need to be governed? Decision Rights: Who? Who makes what decisions? And who has input rights? IT Governance Strategy

9.                           Example Domains and Decision Rights IT Investment and Prioritization Goals Bus. App. Requirements Company Architecture Domain Principles Stakeholders Input Decision Input Decision Input Decision Input Decision Input Decision Exec. Committee Steering Committee LOB Managers IT Leadership Bus. Proc. Owners IT Rel. Managers • IT Leadership — CIO, CIO Office and BU CIOs • Exec. Committee — Executive committee (C-level executives) • Steering Committee — IT steering committee (representatives from executive and LOB management and senior IT management) • Bus. Proc. Owners — Business process owners • IT Rel. Managers — IT/business relationship managers • Bus. App. Requirements — Business application requirements • LOB Managers — Business unit (BU) heads/presidents Note: This chart is adapted from MIT Sloan Center for Information Systems Research and Gartner drawing on the framework of Peter Weill and Richard Woodham, 2002.

10. Example IT Principle/Policy —Investment Decision Making • Principle/Policy: • Business unit leaders and department heads are responsible for determining IT investment and prioritization decisions to maximize the business value of IT Implications: • Business units (project sponsors) are responsible for benefits realization of IT expenditure; IT is responsible for IT cost management • IT is a critical functional component of the business unit, and business unit leaders are expected to understand and articulate how to achieve business value from this function • IT is responsible for providing the right information to educate the business on the value, cost and risk of its investment Rationale: IT is the organization's largest capital investment, and we need to manage the investment of technology expenditure to maximize the return on that asset

11. (How Should IT Do What It Does?) (What Should IT Work On?) Supply Governance Demand Governance IT Governance Operations IT Management Primary Responsibility Business Management Primary Responsibility • Plan • Implement • Manage • Monitor Compliance Architecture Plan Implement Manage Monitor IT Supply Governance Domains Business/IT Strategy Validation Develop Demand Governance Processes Business Unit Prioritization Spending/Project Oversight • Plan • Implement • Manage • Monitor Compliance Security Business/IT Operational Planning Demand Governance Implementation Intraenterprise/ Interenterprise Prioritization Business Benefits Realization • Plan • Implement • Manage • Monitor Compliance Corporate Compliance Overall IT Investment and Expense Councils/ Committees Issue Escalation/ Resolution IT Value Assessment • Plan • Implement • Manage • Monitor Compliance Project Management IT Governance Effectiveness (Metrics, etc.) IT Investment Portfolios (PPM) IT Services Funding • Plan • Implement • Manage • Monitor Compliance Sourcing Investment Evaluation Criteria Board IT Governance • Plan • Implement • Manage • Monitor Compliance Procurement IT Service Chargeback • Plan • Implement • Manage • Monitor Compliance Etc. IT Governance — The Operational View IT Governance Strategy • Goals • Domains • Principles • Decision Rights • Styles IT Governance

12. Business/IT Role Segmentation Model Business: Market Leader/Risk Taker/High Growth The Butler The Entrepreneur "IT provides supporting services but is not strategically important" "IT is a vital component of our business model" Expected IT Role: Tactical/ Utility Expected IT Role: Strategic/ Transformational The Team Player The Grinder "We are totally dependent on IT systems in our business operations, so we give IT as much time as we can afford" "IT is a cost of doing business; costs should be as low as possible" Business: Market Follower/Risk- Averse/Mature

13. IT Governance vs. IT Role Business: Market Leader/Risk Taker/High Growth The Entrepreneur • No time for IT governance • Principles for speed/quality balance • Clear domain responsibility The Butler • Minimized governance • Anticipate business needs • Portfolios for focus • Low governance overhead Expected IT Role: Tactical/ Utility Expected IT Role: Strategic/ Transformational The Grinder • Governance as self- protection • Principles for focus • Benefits realization for value • Strong ROI criteria The Team Player • Formal collaborative governance • Clear decision rights • Focus on benefits realization • Agile governance processes Business: Market Follower/Risk-Averse/Mature

14. Operating Management and Governance Board Product Manager and Service Delivery Manager Operating Management and Governance Board Relationship and Product Managers Roles and Responsibilities Roles and Responsibilities Roles and Responsibilities Roles and Responsibilities Activities Activities Activities Activities Prepare Proposal for New Service Evaluate Feasibility Prepare Detailed Product Development and Operational Deployment Plan Go/No Go Decision Example Effective IT Governance — Implement Processes to Achieve Goals Adding a New IT Shared Service Good Investment Decision

15. Strategy Council • Company business vision • Overall funding • Infrastructure investment • Issue resolution • CEO, CxO, CIO and LOB manager Business Initiative Council • Initiative management • Project priorities • Resource allocation • Funding allocation • Measurement criteria • Trading partner liaison • Project manager, business manager, BU process manager and IT manager Effective IT Governance — Governance viaStakeholder Collaboration Technical Council • Technical architecture • Project management practices • Tools and standards • Vendor criteria • Technical manager, BU process manager and IT manager

16. "Common Good" • Based on a collaborative corporate culture and shared needs • BU management sets individual BU priorities • BU management collaborates to decide overall priorities and allocate resources • Steering committees as major forum for all stakeholders • Steering committees have decision-making role • "Common Reality" • BUs do not normally collaborate, and each demands an individual relationship with IT • BUs are IT's customers (some are more important than others) • Relationship management and product management are used to drive service • Steering committees serve as stakeholder forums linked to decision making • Senior business management acts as the IT "board" and oversees demand management IT Governance Pitfall!'Common Good' or 'Common Reality'

17. Understand Your Customer(s) Common Goals IT Governance Clear Principles Implement Processes, Not Committees Recommendations