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IT Governance
- 1. CSZ QUANTUM LEAP – Vic Falls Peter Doona Finance Director BAT Zimbabwe
- 2. Corporate and Enterprise Governance IT Governance Shareholder Value Equation Signs & pitfalls of bad IT Governance IT Governance to support the Business Delivering a Business Focussed IT Organisation Don’t forget the basics
- 3. Corporate governance models may vary but principles are the same Corporate governance is vested in a supervisory board that is responsible for protecting the rights of shareholders and other stakeholders (e.g. employees, government, customers, creditors) The board works with a senior management team to implement governance principles to ensure the effectiveness of organisational processes
- 4. Vertical integration Board Senior executive team Horizontal integration towards achievement of overall business objectives e.g. growth. Marketing Finance HR IT Operations
- 5. “Governance of enterprise IT focuses on delivering services to support top line growth while moving operational savings to the bottom line” “Value from IT investment is not limited to the financials (discounted cash flow analysis and others)” “Defining the value of a project must connect the investment with its contribution to strategic goals. Simple monetary returns are necessary but not sufficient.”
- 6. • Sustainable future growth through optimal strategy and execution Future Cash Flows • Innovation and Speed to Market Productivity • Maximise Return on Investment through effective decisions • Control of cost base and working capital Cost of capital + Business Risk • Predictability of business performance • Quality of governance and controls • Risk mitigation procedures Growth
- 7. IT is seen as impeding rather than strategically enabling corporate strategy and objectives Executive doubts the value derived from IT investment Application silos emerge (HR, Marketing, etc) with no enterprise architecture IT projects run late and are over the budget (more often than not) Poor management of conflicting goals
- 8. IT investments benefits not tracked IT investment not aligned to corporate objectives Frequent project failure Multiple non enterprise wide applications Uncontrolled IT TCO Focus on technology, not business objectives No discipline in standardisation of business processesses and technical solutions Breakdown in controls Missed business opportunities
- 9. • Value Focus Strategic alignment Visibility of benefits Efficient control IT Managers “know their numbers” • Initiatives focussing on cost efficiencies and productivity enhancement across the business • IT Managers are fully connected to the Business Strategy • IT investments are prioritised and selected based on business goals • Clear Business Cases for IT investments • Costs of investments and benefits delivered tracked and made visible to the Business • Technical solutions which enhance the control environment across the business without slowing it down
- 10. Starts with the whole business leadership team Participation in strategy formulation and business risk assessment Full understanding of business operations Alignment of IT initiatives with business objectives Line of sight from the Board Room to the Computer Room Clear performance measures – shared with other Functions Drive for visibility – don’t hide
- 11. IT Organisation Focus Objectives • Strategy Robust and rapid information for decisions: growth and productivity Speed of business operations • Operational & Technical Excellence • Innovative solutions in marketing (emerging technologies) • Access controls • Records management • Data protection • Backups / BCPs Maximising Future Cash Flows Firewalls • Delivering Shareholder Value Minimising Business Risk
- 12. THANK YOU
Editor's Notes
- Strategy to address harmonised business objectives is developed at functional level.HR , IT, Marketing, Production, etc will develop appropriate strategies to address the growth agenda set by the business.If Marketing strategy is change in RTM, IT and other functions come to the party to enable this otherwise the strategy may be thwarted by IT and other support functions
- The more senior management embraces IT governance the more value from IT investment.The infrastructure may be the wrong one if IT becomes a barrier to business strategy.Good governance does not change with every small strategic change. It should be robust enough from the beginning and be able to handle minor changes in strategy e.g. new product range or line, new route to market strategy. The business was always going to have new products or RTM strategy!Good project governance ensures resources (human and financial) are in place before the project starts.Ways to manage conflicting goals must be design in the governance model chosen by the enterprise.
- Overinvesting in infrastructure, or worse the wrong infrastructure results in wasted resources, delays and system incompatibilities with business partners.On average infrastructure accounts for 55% of IT TCO Investment therein must therefore be in line with business objectives and approved at the right level.