Monday, November 17, 2014

How to Improve IT Governance Maturity

 IT Governance is like a steer, to ensure IT running with the right speed smoothly; not like a brake to stop it and stifle the innovation and performance.

IT plays a significant role in running modern enterprise; more often than not, technology is the business differentiator and innovation engine for business’s growth; also the failure of IT projects can directly impact business’s bottom line. What is the best approach to begin implementing formal IT Governance specifically aimed at optimizing 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?

Start with the board sponsorship and the recognition by the CXO team: 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. The IT dollars are enterprise resource and are finite, and they 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. There is no reason the executive team shouldn't be completely aware of where and how IT assets are being deployed. The CIO is probably the last person to be setting IT priorities and when you take this approach, IT priorities become all CXOs’ priorities, as it should be. The executive team will provide input upon:
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

CIOs need to communicate well and dedicate to planning and executionThe CIO should assess objectively and give a clear idea about the maturity of IT function (Sourcing Unit, Order Taker, Solution Provider, Innovation Partner, Game Changer) - A CXO survey could help at this stage. And CIO has to keep communicating what they are doing to make operations more efficient, outside consultants, benchmarks etc. Begin with the CIO identifying every component of the cost associated with "keeping the lights on." 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. The resources can be bucketed under the run, grow, transform category at the broad organization level informally. 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 a business transform. 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.

IT Steering Committee (ITSC) needs to focus on advising WHAT, not how: 
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 we could have more dollars to spend on new things")? Help CIOs identify some IT pain points such as (Delayed Projects, Cost Overrun, No Innovation, No business involvement, Rouge IT). Every organization will have some quandaries with IT and each organization is different, hence IT governance should be looked more holistically in an enterprise. Once the ground is firmed up, formal IT Governance can be established via the following steps:
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
f. Security and Compliance – Information Security, Risk, and Compliance

The best approach for IT governance has been the one which has aligned the framework approach with the principles and best practices. The CIO's willingness to do anything to improve IT performance usually puts more pressure on the justifications the other officers are offering. After the first few things go pretty smoothly, the future implementations are much easier and the CIO can then be measured on what he/she has committed to do without all the second guessing about what IT is working on. With strong IT governance discipline, IT organizations can be transformed from a cost center to value creator. 


Consultants Factory (CF) specializes in model based approach. We help your IT Organization establish industry best practices & standards like ITIL, COBIT, ISO 9001, ISO 20000, ISO 27001, ISO 22301, Six Sigma etc.

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