GSE IT Governance


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GSE IT Governance

  1. 1. GUIDE SHARE EUROPE IT-Governance (GSE-Projects 1 and 2 - Highlights) Copyright GSE/Project IT-Governance Folie 1
  2. 2. GUIDE SHARE EUROPE Folie 2
  3. 3. GUIDE SHARE EUROPE GSE – Facts and Figures 11 European Regions - 1.300 Members (Companies) - 2-6 European Events (CIO, Mgmt.Summ., MAC’s) - 11 Regional Conferences - 150 Workinggroups - 3 European Projects (IT-Gov., Bus.Issues) 3-5 Top Business Concerns/year 400 Product-Requirements/year Conference Cooperation-Agreement with IBM-ITES ----------------------------------------------------------------------------- Part of the worldwide Usergroup Community (23.000 Company Memberships worldwide) Member of the International User Group Council Folie 3
  4. 4. GUIDE SHARE EUROPE Strategy 2006-2008 Keeping the topics for the Working Groups closely aligned with the major IT developments. Improve and extend dialogue and cooperation on IT-Management Level between our members, IBM and its Partners. Support all customer intentions providing value to the business using IT, through the organisation of sector specific events. Folie 4
  5. 5. GUIDE SHARE EUROPE Areas of Operation/Services Value Creation Business Solution Current coverage New Coverage6 Infrastructure Products Folie 5
  6. 6. GUIDE SHARE EUROPE GSE Members per Industry code IT Services IT Services IT Services Folie 6
  7. 7. GUIDE SHARE EUROPE Scenario IT-Governance IT is an intensively discussed topic in Organisations and Enterprises. Discussion ranges from ‘cost factor’ to ‘business enabler’ and ‘innovator’ in general. A close link between the Enterprise-Strategy and IT-strategy is key, but it seems the distance between Enterprise-Management and IT is growing. Top Managers come very often from the „classical“ disciplines. CIO’s are not very often members of the Board. For many Enterprises are „Consolidation“, and „Concentration on core business“ priorities of today. (But this is tightly coupled with Processmanagement, IT-Infrastructure and IT-Skills !!) Folie 7
  8. 8. GUIDE SHARE EUROPE IT Increasing Budget outsourcing workload Restrictions New Technologies, CIO Staff/skills methods shortage Business Need for value ? consolidation Folie 8
  10. 10. GUIDE SHARE EUROPE Target/Goals of the Projects The 2 Projects „IT Governance“ are dealing with : the role of IT the strategic positioning of IT alignment of IT in/with the enterprise-strategy Necessary control gremia related organisational aspects Folie 10
  11. 11. GUIDE SHARE EUROPE IT Governance Project-1 • Goal : - a Backgroundanalysis - an estimation of Development Trends - the identification of Successfactors and Best Practice Samples - raise quality and influence of the CIO (IT-Department) • Discuss representative Referencemodels for : - the establishment of an effective IT-Strategy - IT-Guidance - IT-Services tightly linked to the Enterprise- Strategy. • Targetgroups are CEO’s, CIO’s Folie 11
  12. 12. GUIDE SHARE EUROPE IT Governance Project-2 • Due to the changed “rules” in an on Demand scenario there is a strong demand to adapt the classical IT-Governance model, elaborated by GSE’s Project IT-Governance/1. • Top Managers have to be made familiar with the necessary changes, best practise examples and pitfalls. They often not realize the potential of the on demand opportunities and the necessary adaption of the classical IT- Governance model including the IT-Strategy. • GSE was working together with IBM on this subject. Folie 12
  13. 13. The GSE Working Group GUIDE SHARE EUROPE Insights on current IT Governance Trends were developed by experienced IT Managers, Business Managers and Consultants Industry and Public Sector Consulting Companies Amt der oberösterreichischen Landesregierung IT-Sektion Bundespensionsamt IT Austria This broad range of diverse backgrounds and experiences results in a comprehensive view on IT governance with different perspectives and emphases. Some foils are company-copyrights. Folie 13
  14. 14. GUIDE SHARE EUROPE Let‘s repeat the keymessages of the IT-Governance Project-1, the „classical“ IT-Governance approach. Folie 14
  15. 15. 1.1. Role of IT GUIDE SHARE EUROPE IT is evolving from a Support Tool into a Source of Competitive Advantage... Development Exhausted Or New Future Push To Be Expected?(1) Source of differentiation Airlines Retailing Financial Automotive and advantage Services Health Care Support core IT business role processes Support back office Copyright © The Boston Consulting Group 1960's 1970's 1980's 1990's 2000's 2010's IT evolution over time IT evolution over time IT needs to be linked with business strategy to generate value for the business Copyright © The Boston Consulting Group Folie 15
  16. 16. 1.2. Our Definition of IT Governance GUIDE SHARE EUROPE Our Definition of IT Governance emphasizes the close Link of IT to the Organization as a whole ... ... but also acknowledges the Limits of IT Governance (!!) IT governance is an integral part of corporate governance and analogously What? combines leadership, organizational structures, and processes that ensure that IT sustains and extends the organization’s strategies and objectives IT governance provides guidelines, establishes criteria and standards for How? decision making, monitoring, measuring, and improving the performance of IT IT governance is the responsibility of the executive board and the executive Who? management (incl. IT) and supports the interaction of all the organization's parties involved with IT Though guided by it, daily operations or operative project management, are What not? not core part of IT governance nor can IT governance substitute for a sound business strategy (1) Vorstand Source: GSE Arbeitskreis "IT Governance" Folie 16
  17. 17. Inhalt GUIDE SHARE EUROPE Content Project-1 IT Strategic Alignment (IT-Governance) IT Value Delivery (ROI, IT-Marketing, Measurement, Tools) IT Macroorganisation (Enterprise-Focus) IT Microorganisation (IT-Focus) Folie 17
  18. 18. GUIDE SHARE EUROPE Strategic Alignment “IT is there to support people and processes, not the other way around.” “The only way to justify IT-Investments is by understanding how to support the business and get customer satisfaction” Folie 18 GSE-IT Governance-Team1-17Okt03-DT-dt-VIE2.ppt
  19. 19. 1.1. The Integrated Strategy GUIDE SHARE EUROPE Increasing Strategic Relevance of IT in a Company demands for Integrated Business and IT Strategy Development “On demand Services” Separated Aligned Business- Integrated Business- and IT- and IT-Strategy Business and IT Strategies Strategy Business- strategy Business- strategy Integrated Strategy IT-Strategy IT-Strategy Integrated strategy development requires joint planning and controlling boards and processes Source: IBM Business Consulting Services Folie 19
  20. 20. 1.1. IT Stakeholder Interaction GUIDE SHARE EUROPE IT Governance manages the Interaction of all involved with IT Central functions Business units, (Corporate strategy, Board of directors subsidiaries, Accounting, affiliated companies Controlling, HR ...) Employees, Cooperation Regulatory authorities workers' council Internal IT service providers External IT service (IT organization, providers shared services center) Transparency needed: roles, influence and mandate of each involved party (1) E. g. in Energy/utilities, health care, telecommunications, financial services (2) Source: BCG; GSE Arbeitskreis Folie 20
  21. 21. 1.3. Frameworks' Overview GUIDE SHARE EUROPE Several IT Governance Frameworks with different Focus Business and IT strategy IT decision integrated Focus on structures and strategy IBM Business and processes IT strategy BCG alignment Gartner Giga Group Structure of global IT Primary organizations objective KPMG IT process Implementation of performance controls COBIT IT governance and metrics ISO using CobiT, ITIL 17799 Company IT security individual Focus on ITIL management ITIL De facto operations standard IT services management IT focus Business/IT alignment Content Each framework can be deployed in different situations accordingly Note: A "framework" is a comprehensive concept describing options, methods, and tools to implement IT governance. If a framework is chosen and adapted to fit a specific companies needs, we speak of a "model" Source: GSE Arbeitskreis "IT Governance" Folie 21
  22. 22. GUIDE SHARE EUROPE IT Value Delivery "Instead of valuing something by its cost, figure out how much it's worth." Folie 22 GSE-IT Governance-Team1-17Okt03-DT-dt-VIE2.ppt
  23. 23. 2.1. IT Benefit GUIDE SHARE EUROPE Benefit from IT is derived exclusively via business processes it supports or enables. IT x Enterprise Enterprise Value Value IT Benefit Business Strategic Value Processes Process Drivers Benefit • enables the process in the first place • market potential • increases effectiveness of the process • customer value • increases efficiency of the process • productivity of resources • reduces risk of the process (e.g. through higher flexibility) • resource prices • increases competitiveness of the enterprise • increases efficiency of the enterprise Source: Wigand • reduces risk of the enterprise Folie 23
  24. 24. 2.2. Levers of IT Value Management GUIDE SHARE EUROPE IT Value-Added can be managed using 3 Levers Strategic Effectiveness Efficiency Alignment „Requesting the right „Delivering the right IT „Delivering IT IT services“ services“ services right.“ Source: IBM Global Services Folie 24
  25. 25. 2.2. Three Levels of IT Optimization GUIDE SHARE EUROPE The right sequence of optimization is crucial to avoiding „doing the wrong things more efficiently“! Non-strategic Strategic IT Services not required IT Services Business Strategy Strategic Optimization Optimization 1 1 Optimization „Requesting the right IT services“ IT Services Unknown IT Optimizing User Requirements Effectiveness 2 Optimizing not required Potential 2 Effectiveness „Delivering the right IT services“ Requirements Unknown IT Current IT Services not met Potential Type of Service Optimizing Requirements not met Unknown IT Potential Optimizing Efficiency 3 3 Specific Customized Standardized Efficiency „Delivering IT services right“ Self Sourcing Strategic Partnerships Market Requirements Unknown IT not met Potential IT Sourcing Source: IBM Global Services Folie 25
  26. 26. 2.2. IT Portfolio Alignment GUIDE SHARE EUROPE The overall optimum for the organization is achieved by aligning user requirements with the strategic guiding principles. Optimum Functionality and Service Level Optimum Functionality and Service Level Functional & Service Level Requirements of IT users Additional Requirements Requirements Cut-off from Strategic Guiding Principles from Strategic Guiding Principles (e.g. Security or Integration Requirements) (e.g. 80/20 Rule of Functionality) Source: IBM Global Services Communicate and explain the rules for additional requirements and cut-offs! Folie 26
  27. 27. GUIDE SHARE EUROPE IT Macroorganisation Folie 27 GSE-IT Governance-Team1-17Okt03-DT-dt-VIE2.ppt
  28. 28. 3.1. Principles of IT Control GUIDE SHARE EUROPE Principles of IT Control federal Strategic central IT-Management local Low customer orientation Reinventing the wheel Scale effects Systems partially in Bad coverage of BU-specific („Economies of Scale“) responsibility of requirements BUs Excessive total costs Critical mass Good coverage of BU- at skills specific demands Different standards und Low transparency and competences possibility of control Enterprise priority of demands of central IT-costs by BU standards user-controlled No synergies and integration advantages synergies Enterprise-wide IT-Strategy, Architecture and Infrastructure Folie 28
  29. 29. 3.2. Sourcing Strategy GUIDE SHARE EUROPE Choice of Optimal Sourcing Model … … Depends on a Sourcing Strategy The Sourcing Strategies Space and the Sourcing Models: Competition Level Make or Buy As part of their externalization strategies, worldwide and European organizations are using, and will continue to use, not only outsourcing but also different intermediate models ! Folie 29
  30. 30. 3.1. Governing Bodies GUIDE SHARE EUROPE High Level Governing Bodies Steer and Monitor Implementation and Performance of IT Governance High (leaders) Roles/responsibilities Governance Committees: Provides strategic oversight to corporation 5–7 most senior people (usually CEO, CFO, BU presidents, CIO) IT is only one dimension of their scope Aligns IT to business strategy Provides IT coordination across BU’s IT Councils: CIO and 5–7 well respected BU managers Establishes IT policies and enforce standards Prioritizes IT projects Seniority of members Chartered by IT Council IT Working Groups: Develops policy recommendations for IT CIO and senior IT manager from each BU Council Focused on a specific IT topic IT Advisory Boards: 3–5 IT specialists Provides BU perspective to CIO with 1–2 IT Council members Debates IT strategy Input on IT project prioritization Low Top-down Balanced Autonomous (technical experts) Corporate IT Corporate IT only and BU IT BU IT groups only (no BU IT groups) groups (no corporate IT) Degree Of Centralization Drives Which Bodies are Deployed for Which Tasks ! Folie 30
  31. 31. 2.3. IT Benchmarking GUIDE SHARE EUROPE Benchmarking – used correctly – can deliver important information for IT controlling BENCHMARKING = structured comparison for better performance = structured comparison for better performance with Own Past Standards Other Companies comparable key metrics comparable key metrics periodic comparison of periodic comparison of standardized standardized (Problem: How to get (Problem: How to get relevant measures of IT relevant measures of IT „„Best Practices“ – Best Practices“ – relevant and comparable relevant and comparable performance performance e.g. ITIL, ITPM, COBIT e.g. ITIL, ITPM, COBIT figures from others?) figures from others?) Hint: Do not neglect „internal“ benchmarking in favour of external Benchmarking! Source: IBM Global Services Folie 31
  32. 32. GUIDE SHARE EUROPE IT-Microorganisation Folie 32 GSE-IT Governance-Team1-17Okt03-DT-dt-VIE2.ppt
  33. 33. 4.1. Gestaltungskriterien IT-Organisation GUIDE SHARE EUROPE Different solutions for the organisation of the IT-Department Function oriented IT-Process oriented • Organisation aligned with IT-Processes • E.g. Oracle-Group, Java-Group, SAP- • E.g. Project Office for Project- Group management, Applicationssupport, Relationship Management, Help Desk, Operation, Engineering Customer oriented Businessprocess oriented • Aligning the IT-Organisation with • Aligning the IT-Organisation with organisational Structures on Customer Businessprocesses Customerside (divisional Structure) • E.g. Finance, HR, … • E.g. Boards, Divisions, Departments, .. Folie 33
  34. 34. 4.1. Zentralisierung vs. Dezentralisierung GUIDE SHARE EUROPE Centralisation versus Decentralisation Centralisation for cost reasons. Enabled by Technologie (Broadband, Internet, Mobile Computing) Decentralisation enables Focus on specific Topics and supports a closer relationship with the customer. Operation with the same Know-How-Basis in decentral Structures results in lower efficiency and professionality and will result in higher costs Calculation of the relevant pro‘s and con‘s, lead in our days mostly to centralisation of – at least – mission critical functions. Folie 34
  35. 35. 4.3. Innovator - Adopter - Follower GUIDE SHARE EUROPE Technology Adoption Folie 35
  36. 36. 4.2. Motivationsfaktoren GUIDE SHARE EUROPE Climate, Culture and Teamspirit are Keyfactors to influence the motivation of your staff Performance oriented Salary Quality Continous of education Leaders Motivation Flexibility of the Working working environment scenario Folie 36
  37. 37. GUIDE SHARE EUROPE IT-Governance Project 2 How will „On Demand“ change the classical How will „On Demand“ IT-Governance model ? change the classical IT-Governance model ? Folie 37
  38. 38. GUIDE SHARE EUROPE Forget how it‘s called …… On Demand Business Adaptive Enterprise Agile Enterprise Realtime Enterprise Zero-Latency Enterprise . . . Folie 38
  39. 39. GUIDE SHARE EUROPE Three important Steps Folie 39
  40. 40. GUIDE SHARE EUROPE Four keyquestions Folie 40
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  51. 51. GUIDE SHARE EUROPE Summary/1 Folie 51
  52. 52. GUIDE SHARE EUROPE Summary/2 Folie 52
  53. 53. GUIDE SHARE EUROPE Not every presentation is successful ........ ……. I hope you enjoyed this one Folie 53