Gene Leganza Vice President Forrester Research

ForrTel:IT Governance ModelsGene Leganza

Vice President

Forrester Research

March 15, 2004. Call in at 12:55 pm Eastern Time

Theme

Governance is a top-down process for imposing the will of

the enterprise as a whole on the actions of individuals. It acts on what people do and how they

do them.

Agenda

• IT governance defined

• Areas in need of governance

• Types of IT governance

• The role of metrics in governance

• Best practices

• Common mistakes

Definition

► IT governance is the responsibility of the board of directors and executive management. It is an integral part of enterprise governance and consists of the leadership and organizational structures and processes that ensure that the organization’s IT sustains and extends the organization’s strategies and objectives.

Source: Board Briefing on IT Governance, IT Governance Institute

The CEO’s perspective

Is our IT:

» Likely to achieve its objectives?

» Resilient enough to learn and adapt?

» Judiciously managing the risks it faces?

» Appropriately recognizing opportunities and acting upon them?

Adapted from Board Briefing on IT Governance, IT Governance Institute

The CEO’s perspective (cont.)

IT Governance is about:

» Aligning IT strategy with the business strategy

» Providing structures and processes that facilitate the implementation of strategy and goals

» Implementing an IT control framework

» Measuring IT’s performance

Adapted from Board Briefing on IT Governance, IT Governance Institute

Federated decision-making

Source: AstraZeneca

Core assets

Enterprise-Wide Requirements and Resources

Common assets for some BUs

BU Assets

BU 1

BU 2

BU 3BU 4

BU 5

BU 6

BU Assets BU

AssetsBU Assets

BU Assets

BU Assets

Striking a Balance Between Centralized & Decentralized

IT areas in need of governance

• Capital planning and investment control

• Strategic plan implementation

• Project selection

• Portfolio management

• Budget control

• Enterprise architecture

IT areas in need of governance (cont.)

• Service level management

• Vendor management

• Policies, processes, procedures & methodologies

» SDLC

» Project management methodology

» Security

» Change management

» Sarbanes-Oxley

» Etc.

Areas within enterprise architecture

• Approval of architecture

» Business architecture

» Application architecture

» Information / data architecture

» Technical architecture

• Application of standards and guidelines

• Technology road map

» Research

» Introduction of emerging technology

» Retirement of obsolete technology

Types of governance

• Steering committee

» Project selection

» Portfolio management

» EA approval

• Program office

» Strategic plan implementation

» EA: Overall and its components

» Other major transformations

Types of governance (cont.)

• Review boards

» EA adherence

» SDLC design reviews

• Audit

» SDLC compliance

» Project management process compliance

» Security

» Change management

» Other standard processes

Types of governance (cont.)

• Standard management review

» SLAs

» Vendor management

» Strategic plan implementation

» Special projects (program offices)

• Consulting

» EA design and technology selection

» Project management

Common to all of the above: metrics & reporting

The role of metrics

Metrics

ReportingAreas

Needing Improvement

Planning

Execution

Best practices

• Direct linkage to business goals

• Clear process owners

• Clearly defined processes

• Clearly communicated processes

• Systematic, consistent reporting

» Dashboard or other graphic

» Summary level with detail backup

• Systematic status review

» Run by process owner

• Continuous process improvement

Common mistakes

• Inconsistent processes, ad-hoc environment

• Vague ownership

• Crisis needed to trigger attention

• Process paralysis: impractical processes

» Lack of clear criteria for inclusion

• Lack of comprehensive governance plan

• Lack of communication

Summary

• Governance is the responsibility of management.

• It controls adherence to business strategy by controlling what is done.

• It controls quality by controlling how things are done.

• Formal structures and processes are required to implement governance.

• Metrics are key to reporting & process improvement.

Gene Leganza

gleganza@forrester.com

www.forrester.com

Thank you

Entire contents © 2004 Forrester Research, Inc. All rights reserved.

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