Milan GrossPrincipalSynergy Corporate Technologies

Real-world Challenges What is IT Governance? The Value of IT Governance The Principles of IT Governance Principles of Practice Governance

Services firm based in the US US $10 million annual revenue 4 business units No IT strategy No governance mechanisms No standardized procedures Leadership failure triggered 95% drop in

business over 3 months Company folded 9 months later

Medical laboratory firm in the US Support:

◦ 200 desktops◦ 20 servers◦ Windows, Unix, and AS 400◦ Remote site in Europe

Resources: 4 IT staff and 1 IT Director Virtually zero downtime

Well articulated set of governance policies

US Government Agency Development of intranet web portal Applied strict IT governance methodology Project finished on time and within budget Achieved all stated objectives Project failed! No engagement of business unit needs Never more than 10% utilization of capacity

Firms with strong IT Governance:

Average 20% higher profit margins

Generate 40% greater ROI on IT investment

A set of processes, procedures, and policies that control IT functions

ITIL

Zachman

Balanced Scorecard

TOGAF

PMBOK

PRINCE2

CobiT

Adopted the ITIL model in 1997 US$500 million and up saved over four

years. Reduced IT staff by15% – 20%

25,000 users at 1,000 locations Implemented ITIL Reduced trouble tickets and costs by 40%

Expensive Resource and Time Intensive Often adopted in isolation Not always tied to governance policies Can overwhelm smaller organizations

Should: Apply to organizations at all sizes Be Actionable Derive from corporate governance Drive line-of-business policies Govern day-to-day business operations

The decision rights and accountability framework to encourage desirable behavior in IT.

Weill and Ross, 2004

1. What decisions must be made to ensure the effective management and use of IT?

2. How should make these decisions?

3. How will these decisions be made and monitored?

IT Principles

IT Architecture

IT Infrastructure

IT Investment and

PrioritizationBusiness Application

Needs

High-level Small number Clearly articulated Define how IT is used in the business

Ex. Provide flexible, customized, integrated customer solutions.

Organizing logic for data, applications, and infrastructure.

Standardization Consistency

Ex: Pursue solutions based on industry standard protocols such as XML, SOAP, and WSDL

The set of shared and reliable services provided across the business

Ex: A web content management system servicing both the intranet and extranet

Specific business needs that directly generate value

Ex: provide sales reps with online access to a product images catalog

Purchasing decisions that reconcile enterprise goals with specific business needs

Ex: a specific vendor’s web content management system. Selected for:◦ Adherence to standard protocols◦ Support for both intranets and extranets◦ Flexible and customizable◦ Allows for building custom image catalog

The decision rights and accountability framework to encourage desirable behavior in the use of a business application or process

A set of governance principles, policies, and procedures published for a specific business practice

Defines: ◦ Principles of practice◦ Delegation of responsibility and authority◦ User roles

Derives from IT Governance principles and policies

Principle: ◦ Content editing and publishing should be

delegated to business units for greater flexibility.

Policy: ◦ Designated users will publish content to their

business unit site by 12 pm Tuesday for review and approval by COB Friday.

Practice:◦ The XYZ Approval Workflow is applied to the

content library in each business unit

Effective IT governance is the single most important predictor of the value an organization generates from IT.

Weill and Ross, 2004

Questions?