April 11 Design Effective Govern Process Hcolella

8/10/2019 April 11 Design Effective Govern Process Hcolella

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This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other

authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied,distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. 2011 Gartner, Inc. and/or its affiliates. All rights reserved.

Heather Colella

Research Vice President

April 11, 2013

Top Recommendations to Design anEffective Governance Process

#GARTNER


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This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other

authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied,distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. 2011 Gartner, Inc. and/or its affiliates. All rights reserved.

Heather Colella

Research Vice President

April 11, 2013

Top Recommendations to Designan Effective Governance Process


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Governance Defined

The decision framework and process by

which enterprises make investment

decisions and drive business value.


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The Basics of Corporate Governance isAbout Risk Management

FinancialApproach

Audit Processand

InvestmentReview

EnterpriseInformationand Privacy

RegulatoryCompliance

and DataGovernance

WorkforceManagement

KnowledgeManagement,

Skills andSuccession

OperationalExcellence

BusinessProcess

Improvementand Maturity


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But Real Power Comes When CompetitiveAdvantage is Added into the Equation

DeliverCompetitiveAdvantage

Assess

Business

Opportunities

Leverage

Emerging

Technologies

Manage

an Innovation

Process

Take

Calculated

Risks


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Governance is a Framework anda Process

Corporate Decision Framework

CorporateStrategy

CorporateValues

BusinessModel

IT Governance Framework

IT Strategy

IT Principles

ITArchitecture

Management

PortfolioManagement

ProjectExecution

BenefitsRealization


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The Basic Governance Structure

Board ofDirectors

SeniorExecutive

Team

EnhancementCommittee

Corporate Governance

Growth /TransformationDecisions

Manage theEnhancement Portfolio


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The Six Most Commonly FoundSupporting Governance Structures

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BoardGovernance

IT InvestmentCouncil

Business-IT

ProjectPrioritization

Council

IT Architectureand StandardsManagement

ProjectManagementOffice (PMO)

FinancialManagement

RiskManagement


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Customize the Governance Process bySelecting Governance Mechanisms

Permanent Governance Mechanisms Project Governance Mechanisms

Senior Executive Committee

Business-IT Investment Group

Chargeback Process

Service-Level Agreements

Technical Process Teams

Business Process Teams

User Advisory Group

Project Sponsor Role

IT Leadership Committee

Architecture Committee

Relationship Managers

Project Management Office

Business Case Process

Escalation-Exception Process

Benefits Management Process

Communication Plans

Mandates and Directives

Performance Management

Stakeholder Meetings

Change Management Office

Structures RolesTools

Governance Mechanisms May Be:


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Changesto

BusinessModel

NewIdeas

BusinessShifts

Create an Exception Process to CaptureInnovation and Help Adapt Governance

Determine

ROI

Assess

Impact

Determine

Portfolio

Position

Decide


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Governance Maturity Model: DeliversGreater Business Benefits at Each Level

Maturity Level

Decision-Making

Style

Business

Outcomes

Strategic Planning

Approach

Leadership

Style

Risk

Approach

Fiscal

Approach

Level 1:

None

Decision making is

random rather than

deliberate and

coordinated

Enterprise is slow to

react to competitive

threats, weak

resource

management and

poor transparency

Minimal to no

strategic planning

taking place

Follows practice or

doctrine of

noninterference

with individuals or

business units

Ignore/deny

risks

Distribution of

budget to

individuals and

groups with

weak central

controls

Level 2:

Isolated

Competency

Decision making is

deliberate for high-

risk efforts or crises

only

Performance

improves in distinct

pockets of the

enterprise only

Near-term focused

and limited in scope

to key initiatives

Focused on high-

priority or high-

stress activities

and delegatesother activities

Respond

reactively to

imminent risks

only

Funds

allocated

parochially to a

community orset of initiatives

Level 3:

Risk

Mitigation

Decisions driven by

constrained

resources or

compliance issues

Reduced costs, and

reduced waste of

resources. Greater

regulatory

compliance

Longer-term focused,

but created in

response to specific

events or immediate

conditions

Control-oriented

and deliberate,

averse to

delegating to

others

Proactively

identify and

manage cost,

compliance and

security risks

Cost

accounting and

cost recovery

focus with little

variability or

agility in

budgets

Level 4:Benefit

Optimization

Decisions are drivenfrom the top down;

based on a clearly

articulated strategy

and guiding

principles

Predictable ROI andgrowth, and

measurable

operational

improvements

Long-term focused,based on taking

advantage of

enterprise synergies

and coordinated

efforts

Devolved style withclear prioritization

and guidance

moving through

enterprise layers

Accept andmanage

business risks

based on an

ROI model

IT portfoliomanaged at the

run/grow/

transform level

Level 5:

Competitive

Innovation

Decisions are made

dynamically and at

high speed

Ability to innovate

and deliver

competitive

advantages in spite

of competition orenvironment

Strategy iterates

rapidly in response to

competitive

opportunities and

threats

Heavy focus on

experimentation

and problem-

solving activities

Take calculated

risks for

competitive

advantage

Venture

capitalist

approach to

financial

management


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Integrate Key Components of the Process

Standardize ProjectInvestmentDashboard

Categorize eachpotential projectinvestment basedon businessoutcomes.

Create PortfolioViews

Create portfolioviews andoptions usingbusinessoutcomes.

Deliver BusinessScorecard

Track milestonesand reportbusiness resultsbased onbusinessoutcomes.

Integrating the three key components of theinvestment process

Use the same business outcome metrics at eachstage in the process to ensure decision-makingconsistency and clear communications.


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Business Outcome Metrics are Highlightedin Gartners Business Value Model

13


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Use Portfolio Views to Help Decision MakersAnalyze Investment Patterns and Options

Tool: Sample portfolio views


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Integrate Standing and Project Governance:Estee Lauder Case Example


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Consistently Report Results Usinga Business Benefits Scorecard

Tool: Sample business benefits scorecard


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Develop a Standard Project InvestmentDashboard With Business Outcome Metrics

Tool: Project investment dashboard


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Develop a Charter to Define Create theBounds of Governance

Decision making or advisory body?

Expected business performance outcomes (costreduction, risk management and growth targets)?

Type: permanent, temporary or project/goal-specific?

Revision of charter schedule? Exception process?

Group Purpose

Chair of the group?

Positions of voting members? Positions of nonvoting members?

Roles of specific members (business process,industry, technology, legal or financial expertise)?

GroupMembership

Funding sources and financial authority?

Guiding principles and policy scope?

Audit responsibilities or accountabilities?

Portfolio of assets or investments responsibility?

Scope of approvals or advice?

Responsibility for minutes and communications?

Subcommittees and relationship to othergovernance bodies?

Roles andResponsibilities


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Use Principles to Guide and ShapeInvestment Decisions

Enterprise Strategic Success Driver IT Principles

Sampension Agility in the face of regulatorychange

[We] can disengage from any vendorwithin two to three years.

Helphire Excellence in absorption-style

acquisitions

The enterprise architecture must be

able to grow on demand, possibly inlarge steps.

TravelCo Growth through cross-saleswhere business units don't like tocollaborate

Everything is decentralized until weagree it is a commodity.

Tesco Operational excellence We will converge to a singleoperating model.

DFID Need to support extremelyremote sites

All DFID systems used overseasmust deliver acceptable performanceover satellite connections.


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Regularly Assess the Effectivenessof Your Governance Process

Talk to key stakeholders first and then the

governance committee to determine where theproblem might lie

Refine the charter to ensure the scope and authorityof the committee are appropriately defined

Refine business case criteria

Are the BestInvestmentDecisions

Being Made?

Create a communications plan

Target to key stakeholders

Deliver consistent messages to the organization

Does theOrganization

Know theDecisions?

Measure benefits

Refine measures and business case criteria asrequired

Communicate results to the enterprise

Are ExpectedResults BeingAchieved?


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Core Governance Tools

Governance charter Agreed to business case criteria that include

strategic value and are used to compare allinvestment proposals in the same way

A picture of the supply side or resources of theequation, which refines demand prioritization

Reporting views: One-page strategy orbusiness capability map, project investment

dashboard, implementation road map, benefitsrealization scorecard

Communication plan to deliver consistent messages tothe enterprise


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Recommendations

Less is more with governance, design the leastamount of governancerequired to make greatdecisions. Constantly review governanceprocesses and streamline regularly.

Imperfection is perfect start with "good enough"tools and use them to facilitate the conversation.Governance in action.

Great governance is about agility and competitive

advantage. Develop an approach and tools thatfocuses on the outcomes your enterprise needs.


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Related Gartner Research

Practical GovernanceTina Nunno, Cathleen Blanton and Heather Colella(G00209451)

Capability Assessment Tool for "Practical Governance"Tina Nunno, Cathleen Blanton, and Heather Colella

(G00212672)

Effective Communications: How to Develop aCommunications PlanHeather Colella (G00170368)

Defining IT Governance: The Gartner IT GovernanceDemand/Supply ModelMichael Gerrard (G00175053)

IT Governance Must Be Driven by Corporate GovernanceJulie Short, Michael Gerrard (G00172463)

For more information, stop by Gartner Solution Central or email us at [email protected].
mailto:[email protected]:[email protected]


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