Bus2.0 - Governance of IT


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Bus2.0 - Governance of IT

  1. 1. Business 2.0 Business and IT fusion Lecture 7: IT Governance and Standards Dr Raymond Young (MBA, GAICD) Raymond.young@canberra.edu.au CRICOS #00212K© Raymond Young 2010
  2. 2. The value of IT Governance CIO Wisdom (2004) p124 • „soft-infrastructure‟ that facilitates decision making – Allows daily operations to function with minimal supervision while allowing the CIO to focus on strategy and vision – Facilitates communication • Governance = building consensus – Requires leadership, must be able to make tough decisions and follow through • Right governance determined by context – Long term investment – Implement in „politically doable‟ stages c.f. „Tipping point‟ CRICOS #00212K© Raymond Young 2010
  3. 3. Definitions of IT Governance Smith (2006) pp54-55 • the process of making decisions about IT – Forester Research • The decision rights and accountability framework for encouraging desirable behaviour in the use of IT – Weill and Ross • The responsibility of the board of directors and executive management. It is an integral part of enterprise governance and consists of leadership and organisational structures and processes that ensure that the organisation‟s IT sustains and extends the organisations strategies and objectives – ITGI • The system by which the current and future use of ICT is directed and controlled. It involves evaluating and directing the plans for the use of ICT to support the organisation and monitoring this use to achieve plans. It includes the strategy and policies for using ICT within an organisation – AS8015, ISO38500 – C.F. The system by which entities are directed and controlled (AS8000) CRICOS #00212K© Raymond Young 2010
  4. 4. Governance Inside the head of top management Kwak and Anabari 2009 ? Mintzberg 1978 ROI Projects Success: On-time On-budget 30% Standish 100% Some OK 90% 80% 70% 60% ? Project Governance 50% ? Portfolio Management 40% ? Programme Management 2/3 of projects Lovallo and Kahneman 2003 No 30% deliver no On-time Clegg et al. 1997 benefits Young 20% and Jordan 2008 On-budget 10% whatsoever Fail 0% 1994 1996 1998 2000 2002 2004 2006 2009 Inside the head of project managers Successful Challenged Failed CRICOS #00212K© Raymond Young 2010
  5. 5. Evolution of Governance CIO Wisdom (2004) p143 1. No coordination of IT effort 2. Various individuals at independent locations assume the role of managing IT assets (in addition to other duties) 3. An individual is given “official” responsibility for IT assets and activities. May be in multiple locations operating independently. 4. IT managers are allowed to hire resources 5. Autonomous islands of systems and information, and the need to coordinate them are recognised. Often a harmonization project is initiated. 6. The benefits of full coordination are recognised. A director level position is established, responsible for cross company or global activities. CRICOS #00212K© Raymond Young 2010
  6. 6. IT Governance [structure] Decision Rights in leading organisations – Weill & Ross Business IT IT IT IT Principles application Architecture Infrastructure Investments needs Business 3 3 3 3 Monarchy 2 Decison IT Monarchy Decison 1 Decison 1 Decison 2 2 Feudal Federal 1 3 Input Input Input Input IT Duopoly 1 2 2 Input Decison 1 CRICOS #00212K© Raymond Young 2010
  7. 7. Governance mechanisms to overcome value leakage As many as 75% of IT Where most organisations suffer value leakage organisations have little oversight of their project portfolios and employ non-repeatable, chaotic planning approaches AMR Research •Duplication of initiatives Strategy Management Architecture Management •Applications which don‟t fit the business model •Poorly conceived initiatives (too late, too early, 52% P3M3 Portfolio Management OPM3 unnecessary) MSP Program Management PgMP COBIT5 (incl ValIT) Asset PRINCE2 Project Management 15% Mngt •Underutilised •Rework (requirements PMP 33% infrastructure •Frequent misunderstood) reinvention due to poor architecture •Over-engineering (lost sight of alignment ITIL reason for change) Operations Management •Resouce model not aligned to business need Sources: IBM Strategy & Change, Survey of Fortune 1000 CIOs, Fujitsu Australia, John Thorp CRICOS #00212K© Raymond Young 2010
  8. 8. Mistaken uses of governance CIO Wisdom (2004) p145 • Strategy vs. Execution – Strategic process: Who decides what is done? – Operational process: how is the strategy executed? • Throttling – Too much for the CIO ... Learn to use high-level governance bodies to share prioritisation process • Hypocrisy – You must be prepared to practice what you preach • Governance for governance‟s sake – “never put anything in a design unless it has a specific reason to be there” CRICOS #00212K© Raymond Young 2010
  9. 9. Major Assignment • Implementation of an IT Capital Planning and investment management process – Best strategy to infuse technologies into organisations • Stakeholder analysis • Collaboration / influence strategy • Change leadership – Governance • Metrics – to measure usefulness of technologies • Strategy to balance portfolio of projects • Governance structures CRICOS #00212K© Raymond Young 2010
  10. 10. HB280, AS8016, 6Q Governance™ Investment & Strategy: Strategy/capability: Benefits / alignment? how much change is required? 67%->40% 40% Business Case ?MSP? Evaluate Initiate 5-23% Direct & Support Responsibility: Governance Monitor 0-13% Project Sponsor? Benefits Realisation Investment: Performance & Behaviour: benefits or terminate? measures and motivation? 33-67% PMBOK, PRINCE2, etc ChangeTracking™ ITIL, COBIT ICT Projects Changed Operations ICT Operations Conformance & Behaviour: Changed Business processes culture for issues to Business Processes be raised?© Raymond Young 2010 ??% CRICOS #00212K
  11. 11. Key Concepts (I) 10-year goals • ↑ economy, ↑ jobs (↑quality) • ↓ crime 5% & „feel safer‟ Output • ↑ health Initiatives – ↓ waiting times (emergency, elective, …) • ↑ education – ↑ literacy/numeracy – >90% yr 12 – ↑ VET participation Asset • ↑ transport Investments – ↓ commuting times • ↑ environment Programs asset investments alone generally will not – ↓ water usage 15% lead directly to the realisation of strategic goals CRICOS #00212K© Raymond Young 2010
  12. 12. Key Concepts (II) 40% Q2. Strategy/capability: Efficiency how much change is required? 5-23% Q3. Responsibility: Avoidduplication Programme Portfolio Portfolio Project Sponsor? 33-67% Management management Q4. Performance & Behaviour Victorian measures and motivation? investment frameworks Governance On-time Management On-budget of Programmes Project Programme Q5. Conformance & Behaviour management culture for issues to be raised? Effectiveness Products/ Any Benefits aligned Realisation Outputs benefits to strategy of strategic goals 0-13% Q1. Strategy: 67%->40% Q6. Monitor: Benefits / alignment?© Raymond Young 2010 benefits or terminate? CRICOS #00212K
  13. 13. Questions & Discussion CRICOS #00212K© Raymond Young 2010
  14. 14. Business 2.0 Business and IT fusion Risk and Reward Dr Raymond Young (MBA, GAICD) Raymond.young@canberra.edu.au CRICOS #00212K© Raymond Young 2010
  15. 15. Risk Identification Smith (2006) p202 • Identify Risk Type Internal External Political Personal agendas Regulations affect Risks cause delays growth • Prioritise Cultural Access to data is a threat to fiefdoms Customers dislike new system • Strategise Economic Accounting changes affect financials Recession impacts donations to minimise Environmental Office relocation impacts data access Unstable power threatens BCP – Avoid Technical – Transfer Continuity Virus causes downtime ERP processing errors cause delays – Minimise Data integrity Dirty data delay system New system doesn‟t migration match requirements Change mngt Users don‟t accept new Training new users ERP system impacts staff time CRICOS #00212K© Raymond Young 2010
  16. 16. Risk Prioritisation Min Low Med High Extreme Minimal Low Medium High Extreme CRICOS #00212K© Raymond Young 2010 UC 2010
  17. 17. Questions & Discussion CRICOS #00212K© Raymond Young 2010