Post on 16-Jul-2015
What is Strategic IT Governance?
IT governance is the formal process of defining the strategy of the IT organization and overseeing its execution to achieve the goals of the enterprise.
Aligned/synchronized with the enterprise strategy, including
other key asset strategies
Decision rights
framework & mechanisms
Vision,goals/priorities, measures; value
prop & service portfolio;resource approaches &
commitments;change management
plans
Translation intoaligned, tactical, operational
plans; closed-loop monitoring & control;accountability;
regulatory compliance
Why is IT Governance important?
Compliance with regulations
Competitive advantage
Support of enterprise goals
Growth and innovation
Increase in intangible assets
Reduction of risk
IT Strategic Alignment, such as formalized business objectives, up to date IT strategy, linkage between business objectives and IT initiatives;
Value Delivery: IT tactical plans, clear benefits for each level of the organization: infra-structure (systems uptime), applications (degree of automation), operational (productivity), financial (income);
Risk Management: defined responsibilities for risk management, risk analysis methodology, defined strategies for addressing risks, continuous monitoring of threats, occurrence and impact;
Resource Management: sourcing strategies, human management practices, user manuals, segregation of duties, time reporting, infra-structure life cycle management, acceptable usage policies.
Performance Measurement: relevant and measurable metrics, continuous monitoring and reporting, follow-up policies, root cause analysis and problem management, benchmarking against industry practices and proven standards or frameworks.
Elements of IT Governance
Core Competencies for Effective IT Governance
Enterprise Architecture
Mgmt
Relationship Mgmt
IT Strategy Mgmt
Financial Mgmt
Supply / Demand
Mgmt
Portfolio Mgmt
IT Operating Model
• Align operational and strategic IT investments to business strategies & objectives.
• Establish policies, standards, models and processes for managing IT as an enterprise asset
• Lifecycle management of infrastructure, applications and services
• Understand the drivers of IT costs to allocate appropriate costs to the consumers of IT services.
• Establish effective, collaborative relationships with business stakeholders and suppliers.
• Balance the demand for IT services with available resources to meet immediate and strategic goals.
Benefits of IT Governance
Strengthens the relationship between the organization and IT; Helps ensure limited IT resources are focused on the right strategic and tactical activities at the right time
Synergies with Enterprise Risk Management (ERM) and other risk management activities; Helps ensure the appropriate IT risk management processes and activities are in place and operating effectively
Enhanced visibility into the IT Function’s ability to achieve its both tactical and strategic objectives; Key Performance Indicators (KPIs) for day-to-day activities and longer-term/strategic initiatives
Improved adaptability of the IT Function to organizational and IT environment changes; Formality of Governance structure, processes and activities enables more efficient and effective response to change
Capability Maturity Modeling Integration (CMMI)- For Process Improvement
Information Technology Infrastructure Library (ITIL)- For IT Service Management.
Six Sigma- For Process Improvement especially security processes.
Control Objectives for Information and Related Technology (COBIT) - For information technology (IT) management and IT governance
The Balanced Scorecard (BSC) - method to assess an organization’s performance in different areas.
Frameworks for IT Governance
Needs, Issues & Challenges
Procedure, Audits, Metrics
Control
StrategicTactical
Operations
Demand
IT andBusiness
Resources
Supply
Capital, Capacity, Priorities
Planning
Alignment Flexibility
EfficiencyQuality
Lack of Business aligned strategyLack of Business aligned strategy
Reduce costs across business Reduce costs across business Ineffective project ManagementIneffective project Management
Deployment Complexity through lack of standard & legacy
Deployment Complexity through lack of standard & legacy
No Audit Trails No Audit Trails
Management of Service ChangesManagement of Service Changes
Must reduce IT costs by 30%Must reduce IT costs by 30%
Lack of IT resource transparencyLack of IT resource transparency
Missed targets due to lack of steering control Missed targets due to lack of steering control
Deployment Complexity in number of project
Deployment Complexity in number of project
Cannot aggregate need and distribute ROI
Cannot aggregate need and distribute ROI
No means of governing outsourced contractsNo means of governing outsourced contracts
No means of capturing demandsNo means of capturing demands
No means of prioritization of business need
No means of prioritization of business need
No means of reporting SLANo means of reporting SLA
Making new outsourcing decisions
Making new outsourcing decisions
Aligning IT and Business Strategy
Corporate Mission – Business Goals – IT Strategy
Requires involvement from many levels and activities within the enterprise.
Lack of alignment leads to adverse business issues.
Strong IT Governance contributes toward proper alignment.
Ensuring Value and Effectiveness
IT issues are the least understood, despite increasing reliance placed on IT.
Initiate IT governance structures with the right level of executive involvement.
Board of Director’s require essential IT related skills
IT Governance
Consists of leadership, organizational structures and processes that safeguard information.
Security over information assets.
Benefits of IT Governance.
IT is a top-down process.
Measuring IT Governance Performance
Measuring IT performance is a key concern as it demonstrates the effectiveness and added business value of IT.
Commonly seen as the IT “Black Hole” – costs continually rise without clear evidence of value derived from the IT function.
Traditional performance measurement methods require monetary values which are hard to apply to IT systems.
IT Balanced Scorecard
One of the most effective means to aid an organization in achieving IT and business alignment.
Provides a systematic translation of the IT strategy into tangible success factors and metrics.
Gives a balanced view of the value added by IT to the business.
Calculating the value of IT investments is a business issue for which business managers are ultimately responsible for.