1 IT Governance: IT Governance: Establishing Who Establishing Who Decides Decides Andrew J. Clark (Syracuse Andrew J. Clark (Syracuse University) University) OR
Dec 19, 2015
11
IT Governance:IT Governance:Establishing Who DecidesEstablishing Who Decides
Andrew J. Clark (Syracuse University)Andrew J. Clark (Syracuse University)
OR
22
Value of organization’s Value of organization’s ITIT
1.1. My interest in GovernanceMy interest in Governance
2.2. Ineffective governance Ineffective governance
symptomssymptoms
3.3. Why is it important - who Why is it important - who
cares?cares?
4.4. IT Governance modelIT Governance model
5.5. ConclusionConclusion
33
My interest in IT My interest in IT GovernanceGovernance
• Recent reading/researchRecent reading/research
• New CIO at SUNew CIO at SU
• Functional area Functional area
relationshipsrelationships
• Enterprise thinkingEnterprise thinking
IT
Governance
by Weill &
Ross
44
What is What is Governance?Governance?In the English language, “governance” is an old In the English language, “governance” is an old term which, like “civil society”, fell into disuse, term which, like “civil society”, fell into disuse, but which has been revived, given new but which has been revived, given new meaning, and attained widespread currency. meaning, and attained widespread currency. Like “government” and “governor”, it is derived Like “government” and “governor”, it is derived from the Latin work “gubernare” – the action of from the Latin work “gubernare” – the action of steering a ship. A popular definition reflects steering a ship. A popular definition reflects these ancient Roman roots by defining these ancient Roman roots by defining governance as “steering, not rowing.governance as “steering, not rowing.[1]
[1] MacLean, Don, “Herding Schrodinger’s Cats: Some Conceptual Tools for Thinking about Internet Governance”, page 6, Background paper for the ITU Workshop in Internet Governance Geneva, 26-27 February 2004. Accessed November 15, 2005. Available at http://www.itu.int/osg/spu/forum/intgov04/contributions.html Internet
55
What is What is Governance?Governance?
““Providing the structure for Providing the structure for
determining organizational objectives determining organizational objectives
and monitoring performance to ensure and monitoring performance to ensure
that objectives are obtained.”that objectives are obtained.”[2]
[2] “OECD Principles of Corporate Governance, Organization for Economic Cooperation and Development, Directorate for Financial, Fiscal and Enterprise Affairs, SG/CG (99) 5 and 219, April 1999
66
What is What is ITIT Governance?Governance?
3. Wikipedia
Information Technology Information Technology
Governance, IT Governance or Governance, IT Governance or
ICT Governance, is a subset ICT Governance, is a subset
discipline of Corporate discipline of Corporate
Governance focused on Governance focused on
information technology (IT) information technology (IT)
systems and their performance systems and their performance
and risk managementand risk management33..
77
What is What is ITIT Governance? Governance? (continued)(continued)44
4. Holland, Norma, EDUCAUSE Leadership Program, June 2005
Describes the rules and Describes the rules and procedures for making and procedures for making and monitoring decisions on strategic monitoring decisions on strategic IT concerns.IT concerns.
IT governance is the term used to IT governance is the term used to describe how those persons describe how those persons entrusted with governance of an entrusted with governance of an entity will consider IT in their entity will consider IT in their supervision, monitoring, control supervision, monitoring, control and direction of the entity.and direction of the entity.
88
IT Governance isIT Governance is::
1.1. Decision rightsDecision rights
2.2. AccountabilityAccountability
3.3. Desirable Desirable
behaviorsbehaviors
The assignment of The assignment of decision decision rightsrights and the and the accountabilityaccountability framework to encourage framework to encourage desirable behaviorsdesirable behaviors in the in the use of IT.use of IT.
99
Symptoms of ineffective Symptoms of ineffective governancegovernance
• Low IT valueLow IT value• IT barrier to strategiesIT barrier to strategies• Ineffective IT mechanismsIneffective IT mechanisms• Can’t explain governanceCan’t explain governance• Projects late & over budgetProjects late & over budget• Outsourcing seen as fixOutsourcing seen as fix• Changes frequentlyChanges frequently
1010
Why is it Why is it important?important?
• IT Costs / Business valueIT Costs / Business value
• New business modelsNew business models
• Business riskBusiness risk
• Dependence on other entitiesDependence on other entities
• Essential business knowledgeEssential business knowledge
• Business’s reputationBusiness’s reputation
1111
Why is it important? Why is it important? (2)(2)
Research findings:Research findings:
Thoughtful design leads to Thoughtful design leads to above average returns on above average returns on IT investmentsIT investments
Percent of executives who Percent of executives who can describe IT can describe IT governance.governance.
1212
Governance ModelGovernance ModelThree Major ComponentsThree Major Components
• What decisions need to be made?What decisions need to be made?
(Domains)(Domains)
• Who has decision and/or input Who has decision and/or input
rights?rights?
(Styles)(Styles)
• How are the decisions formed andHow are the decisions formed and
enacted?enacted? (Mechanisms)(Mechanisms)
1313
What Decisions Need to be What Decisions Need to be Made?Made?
((Domains)Domains)
There are five major decisions There are five major decisions domainsdomains
1.1. PrinciplesPrinciples
2.2. Infrastructure strategiesInfrastructure strategies
3.3. ArchitectureArchitecture
4.4. Business application needsBusiness application needs
5.5. Investment and prioritizationInvestment and prioritization
1414
Who has Decision & /or Input Who has Decision & /or Input Rights?Rights?(Styles)(Styles)
1.1. Business Business MonarchyMonarchy
2.2. IT MonarchyIT Monarchy
3.3. FeudalFeudal
4.4. IT DuopolyIT Duopoly
5.5. FederalFederal
6.6. AnarchyAnarchy
1515
Key players in Governance Key players in Governance ArchtypesArchtypes55
C-levelC-level ITIT BizBiz
Business MonarchyBusiness Monarchy √√
IT MonarchyIT Monarchy √√
FeudalFeudal √√
IT DuopolyIT Duopoly √√ √√
√√ √√
FederalFederal √√ √√ √√
√√ √√
AnarchyAnarchy
5. Weill, P. & Ross, J.W. (2004)5. Weill, P. & Ross, J.W. (2004)
1616
How are Decisions Formed & How are Decisions Formed & Enacted?Enacted?
(Mechanisms)(Mechanisms)
• Decision-making structuresDecision-making structures
• Alignment processesAlignment processes
• Communication approachesCommunication approaches
1717
Mechanisms: Decision-making Mechanisms: Decision-making structuresstructures55
Decision-making structureDecision-making structure % using
CIO Rank
Executive or senior management Executive or senior management committeecommittee
89 %89 % 3.53.5
*** IT leadership committee *** IT leadership committee comprising IT executivescomprising IT executives
85 %85 % 3.83.8
Process teams with IT membersProcess teams with IT members 84 %84 % 3.43.4
*** Business/IT relationship *** Business/IT relationship managersmanagers
83 %83 % 3.93.9
*** IT council comprising business *** IT council comprising business and IT executivesand IT executives
71 %71 % 3.73.7
Architecture committeeArchitecture committee 66 %66 % 3.13.1
Capital approval committeeCapital approval committee 55 %55 % 3.13.15. Weill, P. & Ross, J.W. (2004)5. Weill, P. & Ross, J.W. (2004)
1818
Mechanisms: Alignment Mechanisms: Alignment ProcessesProcesses66
Alignment ProcessAlignment Process % % usinusin
gg
CIO CIO RankRank
*** Tracking of IT projects and *** Tracking of IT projects and resources consumedresources consumed
96%96% 3.43.4
*** Service-level agreements*** Service-level agreements 88%88% 3.23.2
Formally tracking business value of Formally tracking business value of ITIT
62%62% 2.92.9
Chargeback arrangementsChargeback arrangements 61%61% 2.82.8
6. IBid6. IBid
1919
Mechanisms: Communication Mechanisms: Communication ApproachesApproaches77
Communication approachCommunication approach % % usingusing
CIO CIO RankRank
*** Work with managers who don’t follow *** Work with managers who don’t follow the rulesthe rules
90%90% 3.23.2
Senior management announcementsSenior management announcements 88%88% 2.92.9
*** Office of CIO or Office of IT *** Office of CIO or Office of IT governancegovernance
85%85% 3.63.6
Web-based portals and intranets for ITWeb-based portals and intranets for IT 79%79% 2.92.9
7. Ibid7. Ibid
2020
The Governance ModelThe Governance ModelThe “Harmony ‘What-How’ The “Harmony ‘What-How’
Framework”Framework”
StrategyStrategy GovernanceGovernanceArrangementsArrangements
PerformancePerformanceGoalsGoals
DesirableDesirableBehaviorsBehaviors
GovernanceGovernanceMechanismsMechanisms
Metrics &Metrics &AccountabilitiesAccountabilities
HowHow HowHow HowHow
WhatWhat WhatWhat
WhatWhat WhatWhat
2121
Mapping Styles Against Mapping Styles Against DomainsDomains
DomainsDomains PrinciplesPrinciples ArchitectureArchitecture InfrastructureInfrastructure Business Business ApplicationsApplications
Investment & Investment & PrioritiesPriorities
StylesStyles InpuInputt DecisionDecision InputInput DecisionDecision InputInput DecisionDecision InputInput DecisionDecision InputInput DecisionDecision
Business Business MonarchyMonarchy
IT IT MonarchyMonarchy
FeudalFeudal
FederalFederal
DuopolyDuopoly
AnarchyAnarchy
2222
SU’s Mapping of Styles Against SU’s Mapping of Styles Against DomainsDomains
DomainsDomains PrinciplesPrinciples ArchitectureArchitecture InfrastructureInfrastructure Business Business ApplicationsApplications
Investment & Investment & PrioritiesPriorities
StylesStyles InpuInputt DecisionDecision InputInput DecisionDecision InputInput DecisionDecision InputInput DecisionDecision InputInput DecisionDecision
Business Business MonarchyMonarchy
IT IT MonarchyMonarchy
FeudalFeudal
FederalFederal
DuopolyDuopoly
AnarchyAnarchy
√√
√√
√√√√√√√√
√√
√√
√√√√√√√√
√√
√√
√√√√√√√√
√√
√√
√√√√√√√√
√√
√√
√√√√√√√√
√√
√√
√√
√√
√√ √√
√√
√√
√√
√√√√
√√ √√
√√
√√
2323
Mapping Styles Against Mapping Styles Against DomainsDomains
DomainsDomains PrinciplesPrinciples ArchitectureArchitecture InfrastructureInfrastructure Business Business ApplicationsApplications
Investment & Investment & PrioritiesPriorities
StylesStyles InpuInputt DecisionDecision InputInput DecisionDecision InputInput DecisionDecision InputInput DecisionDecision InputInput DecisionDecision
Business Business MonarchyMonarchy
00
IT IT MonarchyMonarchy
11
FeudalFeudal
FederalFederal
DuopolyDuopoly
AnarchyAnarchy
00
88331515
00 00
3636
1414
33
1818
2727 00 66 00 77 11 1212 11 3030
7373 59592020 1010 00 88 00 99
00 00 11 22 11 1818 00 33
4466
5599
8811
9933
3030 2727
2727 3030
44 66
1515 3030 2323 1717 66334400 0011 11 00 0033 11
2424
How Top Financial Performers How Top Financial Performers GovernGovern88
PrinciplePrinciple
ss
ArchitecturArchitectur
ee
InfrastructureInfrastructure BusinesBusines
s Needss Needs
InvestmeInvestme
nt & nt &
PrioritiesPriorities
Business Business
MonarchMonarch
yy
ProfitProfit
GrowtGrowthh
ProfitProfit ProfitProfit GrowtGrowt
hh
ProfitProfit
GrowthGrowth
IT IT
MonarchMonarch
yy
ProfitProfit
FeudalFeudal GrowthGrowth
FederalFederal ProfitProfit
DuopolyDuopoly ROAROA ROAROA ROAROA ROAROA ROAROA
2525
Non-Profit IT Non-Profit IT GovernanceGovernance
• More Business MonarchiesMore Business Monarchies
• Less IT MonarchiesLess IT Monarchies
• More Federal decision arrangementsMore Federal decision arrangements
• More Federal input arrangementsMore Federal input arrangements
• More IT duopoliesMore IT duopolies
2626
Top 10 Leadership Top 10 Leadership PrinciplesPrinciples
1.1. Actively design governanceActively design governance
2.2. Know when to redesignKnow when to redesign
3.3. Involve senior managersInvolve senior managers
4.4. Make choicesMake choices
5.5. Clarify exception handlingClarify exception handling
2727
Top 10 Leadership Principles Top 10 Leadership Principles (continued)(continued)
6.6. Provide right incentivesProvide right incentives
7.7. Assign ownership & accountabilityAssign ownership & accountability
8.8. Design at multiple levelsDesign at multiple levels
9.9. Provide transparency & educationProvide transparency & education
10.10. Implement common mechanismsImplement common mechanisms
2828
ReferencesReferences Board Briefing on IT Governance , Available from Board Briefing on IT Governance , Available from http://http://www.isaca.orgwww.isaca.org Click on Governance, then on Downloads, and scroll down to Anonymous Click on Governance, then on Downloads, and scroll down to Anonymous AccessAccess
Broadbent, M. & Kitzis, E., The New CIO Leader: Setting the Agenda Broadbent, M. & Kitzis, E., The New CIO Leader: Setting the Agenda and Delivering Results, Cambridge, Harvard Business School Press, and Delivering Results, Cambridge, Harvard Business School Press, 20042004
Lane, D, CIO Wisdom: Best Practices from Silicon Valley’s Leading IT Lane, D, CIO Wisdom: Best Practices from Silicon Valley’s Leading IT Experts, Upper Saddle River, Pearson Prentice Hall, 2004Experts, Upper Saddle River, Pearson Prentice Hall, 2004
McCredie, J. (2006) Improving IT Governance in Higher Education McCredie, J. (2006) Improving IT Governance in Higher Education (Research Bulleting 18). Boulder, CO: EDUCAUSE Center for Applied (Research Bulleting 18). Boulder, CO: EDUCAUSE Center for Applied Research. Available from Research. Available from http://www.educause.edu/ecarhttp://www.educause.edu/ecar
McNurlin, B.C. & Sprague Jr, R.H. (2004) Information Systems McNurlin, B.C. & Sprague Jr, R.H. (2004) Information Systems Management in Practice, Upper Saddle River, Pearson Prentice Hall.Management in Practice, Upper Saddle River, Pearson Prentice Hall.
Weill, P. & Ross, J.W. (2004), IT Governance: How Top Performers Weill, P. & Ross, J.W. (2004), IT Governance: How Top Performers Manage IT Decision Rights for Superior Results, Boston, Harvard Manage IT Decision Rights for Superior Results, Boston, Harvard Business School PressBusiness School Press
2929
Contact Information:Contact Information:
Andrew J. ClarkAndrew J. ClarkSyracuse UniversitySyracuse UniversityChief Process ArchitectChief Process ArchitectE-mail: E-mail: [email protected]@syr.edu