Monday, September 29, 2014

IT Governance Approaches and Practices

 Governance is like a steering wheel, to keep business toward the right decision

The emerging digital IT trends such as Cloud, Moble, Social and Big Data bring unprecedented opportunity for business growth, and also expose business to the higher risks than ever, so 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? 

Each Organization is different; hence, IT governance should be looked more holistically in an enterprise. Start with the Board and C-Level sponsorship and the recognition by the officer team that the IT dollars are an 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 benefit to the enterprise. The holistic approach for IT governance has been the one which has aligned the framework approach with tailored IT organization’s governance capability:
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 approach in the organization.

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. There is no reason the executive team shouldn't be completely aware of where and how IT assets are being deployed. IT priorities become the Board and senior executive team’s priorities, as it should be. Regarding the CIO, 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. CIO can then be measured on what he/she has committed to do without all the second guessing about what IT is working on.

Begin with the CIO identifying every component of cost associated from "keeping the lights on" to business value-adding. 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 transform. Then the current approved projects by title, executive sponsor, budget, schedule and resources dedicated to each project. Next in exactly the same format, show the requested projects for which there are no resources in the current budget. 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.

Establish IT governance body, principle and disciplines: By Now some pain points from IT would have surfaced (Delayed Projects, Cost Overrun, No Innovation, No business involvement, Rouge IT) – Every organization will have some quandaries with IT. What’s the role of ITSC: what’s the composition and size of the IT Steering Committee (ITSC)? How much of a decision making body (vs. advisory or discussion forum) is the 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, we could have more dollars to spend on new things")? Once the ground is firmed up, a formal IT Governance can be established – Consider following
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

IT governance practices: 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. Gamifcation - 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.

Governance is like a steering wheel, to keep business toward the right decision; high effective IT governance must create good IT performance, not only for keeping the light on, but especially for the long run business growth. Further, IT governance is converging with corporate governance. The companies which have good performance must have good governance structure and behavior as well.


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