Sunday, August 10, 2014

The Holistic IT Governance

It takes strategic and systematic thinking and holistic IT governance approach in running an Agile IT.

Digital IT is permeating into the very fabric or core processes in modern organizations, thus, IT governance is crucial to steering business toward the right direction and make effective business decisions. However, what is the best approach to begin implementing formal IT Governance specifically aimed at improving the quality of demand? How can the "competition" for finite dollars be structured so that the end game, best benefit for the enterprise, is achieved? How much of a decision-making body (vs. advisory or discussion forum) is the IT Steering Committee (ITSC) and how do they make those decisions? How does one keep the ITSC focused on WHAT IT should work on and not HOW IT accomplishes it ("If IT was more efficient at keeping the lights on, you could have more dollars to spend on new things")?

Starting with the board sponsorship: Make the recognition by the BoD and officer team that the IT dollars are enterprise resource and are finite, and must be leveraged to the benefit of the enterprise. IT governance's purpose is to facilitate all business units in competing for the dollars based on the benefit to the enterprise. Begin with the CIO identifying every component of the cost associated with "keeping the lights on", then the currently approved projects by title, executive sponsor, budget, schedule and resources dedicated to each project.

Categorization and prioritization
There is no reason the executive team shouldn't be completely aware of where and how IT assets are being deployed. Next in exactly the same format, show the requested projects for which there are no resources in the current budget. Informally the resources can be bucketed under the run, grow, transform category at the broad organization level. This will help the organization keep a tab on the type of the expenditure and ensure that a significant portion of the resource is used to create new capabilities which help business transformation. Now the CIO asks the senior executive team and officer of IT steering committee what they'd like him/her to do, he/she has to keep explaining what they are doing to make operations more efficient, outside consultants, benchmarks etc. The CIO's willingness to do anything to improve IT performance usually puts more pressure on the justifications the other officers are offering.

Holistic governance approach
Each organization is different; hence IT governance should be looked more holistically in an enterprise, Try out the approach with following steps:
(1). Understand the operating style of organization. 
Who holds the decision-making power, Is it with the CEO, Board, CFO, PE Investors or someone else. Know what view each of the CXO roles has on organization priorities and the role they consider IT has in the organization.
 (2) Assess IT performance. This should give a clear idea about the maturity of IT function (Sourcing Unit, Order Taker, Solution Provider, Innovation Partner) - A CXO survey could help at this stage.
(3) Identify IT pain pointBy Now some pain points from IT would have surfaced (Delayed Projects, Cost Overrun, No Innovation, No business involvement, Rogue IT – Every organization will have some quandaries with IT).

(4) Formal governance domains: Once the ground is firmed up, a formal IT governance can be established – Consider the following governance can be around:
a. IT Operations - Service Catalog, SLA 
b. Business Management- Projects, Innovation, Demand 
c. Sourcing, Vendor Management, and Control 
d. Organization Structure, Learning, Leadership Development
e. Data, Process, Architecture etc 
f. Security and Compliance – Information Security, Risk, and Compliance

(5) Governance practices: Pick what is most relevant to gain trust of leaders, execution approach could consider following in any order what works best for your organization:
a. Newsletters – Issue Newsletters, Broadcasting good and bad about IT, This could be about ROI of IT, Project delays, Benefits Realization etc.
b. Gamification - Create IT scorecards and benchmarking performance of business units on IT benchmarks to generate a spirit of competition.

c. Decision Entities – Implement Delegation of Authority for IT, This way all the decisions are not cascaded up to IT Steering Committee. Let the Project Manager and Business Manager resolve some things at their own level. 
d. Audits – While no one likes them, however, sometimes they just help in drawing attention to CXO’s ears. Partner with the Audit team and explore how they can help.
e. End to End Demand Management Process – Implement an end to end Demand management process which takes care of new project validation, business case approval, project development and design, user training and rollout, user adoption and change management and benefits realization.

(6). The best approach for IT governance has been the one which has aligned the framework approach with
a. maturity of IT function and the expectations business leaders have from IT
b.immediate and long-term priorities of organization
c. ways of working, political equations among key leaders and decision-making the approach in the organization

IT management and IT governance are interdependent disciplines. The purpose of IT management is to optimize IT resource and catalyze business growth; the goal of IT governance is to ensure making the right decisions and running an effective and agile IT.


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