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Infront AS
Deliverable 2
IT and Management (INF5890) Spring 2017
University of Oslo
THE FACULTY OF MATHEMATICS AND NATURAL SCIENCE
DEPARTMENT OF INFORMATICS
Matias Snellingen Radoslaw Krzeski
Syeda Taiyeba Haroon Mohamed Laaouar
Submission Date
28.03.2017
1
Acknowledgement
We would like to thank the CIO and members of IT management team at Infront for their support in producing this document.
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Contents
Acknowledgement 1
Abstract 4
Introduction 5
Historical Evolution of IT at Infront 6
Key IT Systems at Infront AS 8 Architecture (Customer directed) 9
Front-end systems 9 Back-end systems 9 External systems 9
Architecture (internal Organization) 10 Applications 10
FreshDesk (Support & IT/Operations) 11 FreshSales (Sales) 11 Ceeview (Monitoring Operations) 11 O�ce Suite 11 Exchange 11 Skype for business 11 Trello 12 Atlassian Con�uence 12 Slack 12 Xledger 12
Organizational Structure of IT at Infront AS 12 Development and IT 12 Support and Client Management 13 Sales 13 Administration 13
Current IT Governance 13 The organizational structure 14 The Governance Matrix 15 The following are systems of decision makers: 15 The following are a set of organizational principles that govern the organisation: 16
Other External Relationships of the Company 17 Data Providers 17
In�nancials 17 TDN Finans 17 Nyhetsbyrån Direkt 17 SME Direkt 18
Technology Providers 18
3
Analysis of IT Governance and IT Management at Infront 18 Why is IT Governance needed? 19 The Weill and Ross Framework 19
IT Decision Domains 19 IT Governance Archetypes 20 Implementation Mechanism 20
How to assess IT Governance? 21 Application of Weill and Ross Framework on Infront 22
What is considered Best and Worst Governance Performance? 23 Why Duopolies worked best for decision making at Infront? 24
IT Principles 27 IT Architecture 27 IT Infrastructure 28 Business Application Needs 28 IT Investment 28
Operational Model 29 Current operational model 29 What should be the goal 29
Architecture 30 Customer-directed architecture 30 In-house architecture 30
Integrating IT Governance Strategy at Infront 31 Critical Success Factors for good Governance 31
Conclusion 34
Reference 34
Appendix 1 - Interview 35 What is Infronts IT principle? 36 What decisions are taken to ensure e�ective management of IT? 36 Key assets? 36 How do you foresight new development and potential business investments? 36 How do you identify new business needs that can potentially generate value? 37 Development done the creative way or discipline way? 37 What is the average investment in IT? 37 Are the any major ERPs involved? 38 Infront group cooperation and data integration. 38 External cooperation and data integration. 38
Appendix 2 - Gantt Chart 38
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Abstract This report is based on the interview and documents provided by Infront AS to
analyze the IT governance of the company.
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Introduction The aim of this project is to describe the current situation related to IT management at Infront. We will describe key systems in use, how they connect and interact, and how key decisions are being governed through IT governance frameworks. We will also conduct an interview of a key position at the company.
The aim is to outline the organizational structure of IT functions at Infront, how the departments are organized and how these structures are enforced. We will look at how the company has placed the right key managers and functions to provide governance over their departments. We also aim to provide an overview of the internal data enterprise and how these connect to external providers and clients.
In the �rst part of our assignment we will gather and source information to cover these requirements. The in-depth interview will provide insight into how Infront manages its IT governance and how it is dividing its decision-making to key stakeholders. We will provide a high-level map of systems in use and map functions related to the operational business at Infront.
In part two we will analyse and critically assess these functions. We will compare these to theoretical frameworks provided by the curriculum, and see how other cases of IT governance can provide guidance to improvement at Infront. Other points of interest will include topics on which markets Infront operates in, who are their competitors, if they have any major regulatory obligations, necessary certi�cations needed, and how they are unique to their business market.
Other questions that are worth looking into are privacy concerns, maintenance and client uptime-security and to what extent real-time trading might pose a threat to the business model. More to follow in the second part of the assignment.
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Historical Evolution of IT at Infront
Ref: Infront 1
Infront was established as a company in 1998 before going public in 2000. The founders are Chief Executive O�cer and co-founder Kristian Nesbak, along with Chief Technology O�cer and co-founder Morten Lindeman. The company provides �nancial professionals with “real-time data, news and analytics covering key markets”. Infront is an independent and privately owned company and have been in the market for over 20 years. By 2003 they reached 1000 active users. Driven by a team of industry experts building on top of client's business needs within their central tool called the “Infront Terminal”.
They opened their second o�ce in Denmark in 2004, with a third o�ce following closely in 2005. In 2008 Infront acquired Nyhetsbyrån Direkt, a leading newswire for �nancial services. Within this acquisition Infront also gained access to SME Direkt, which is a leading consensus estimate service in the Nordic regions.
Four years later they acquired In�nancials, a leading information outlet for business valuation and equity research. In 2014 their systems have reached 10.000 users, and the company opened an o�ce in London shortly after. The company continues to be active, with the purchase of an additional agency, TDN Finans, supplying brokers with real-time news from the Norwegian share and interest-rate markets. They have integrated with a number of external partners, such as Symphony and FA Solutions, and moved their platform towards new heights on mobile platforms. The company has also secured future prospect by integrating bitcoin exchanges into its terminal.
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Infront recently opened an o�ce in South Africa last year and now operate in more than 27 countries. Ref: Infront 2 & 3
They are strongly rooted in the Nordics, with the following infographic to prove this:
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Key IT Systems at Infront AS
Infront has their key IT systems splitted into two classes:
- Customer directed systems, and - System used to run the shop.
The customer directed systems, can be further split into three sub categories:
- Front End Systems - Backend Systems - External Systems
The overall architecture of the systems and their inter relations are discussed in more detail with the diagram below.
Figure A - high level overview of the architecture of the customer directed systems.
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Architecture (Customer directed) The customer directed architecture at Infront is constructed into three di�erent systems, each playing their own individual roll yet connected through data and infrastructure sharing.
Front-end systems As shown in the previous diagram, these are the systems that present the information to the users. Users use these service systems to gain access to their demands. There are two main components the users can use to access the infront service:
- The Infront Mobile Trader application and - The Infront Terminal.
The user can also access some through browser websites.
Back-end systems The back-end system is the heart of Infront. It consists of several components that interact with each other. One of the central components is the authentication server . This server handles all the authentication requests by the users and grants or denies access to resources the user requests. When the user is authenticated, the main component they connect to is the streaming servers, these servers stream the requested data (Exchanges, history, news etc.) to the terminal. These streaming server get their data from the feed handlers, the feed handlers job is to collect the data from the external data providers, process these to a compatible format and send it to the streaming servers. The webservers are also in this class, as well as databases (not included in the graphic). Infront also provides trading servers for some external partner, these are where the users can get portfolio management functionality for the given external provider.
External systems The external system consist primarily of stock markets by data providers and stock brokers by technology providers. Infront also have some other technology providers that does an example data analysis for them.
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Architecture (internal Organization)
Infront has several shared resources that the employees and systems can use. Such system that use these shared resources is the Outlook (Exchange), Infront Web Admin, Infront Wiki, Ceeview and the computers that are connected to the network. Infront Web admin is used to manage customer data and access. Infront Wiki is a con�uence framework and this is where you access most of the documentation. And the network that the computer are connected to gives them access to the available shared servers, �les, applications or printers.
Applications Infront uses a number of applications. Some of the applications are to provide services to the customers, while others are used internally for employees within the organization and then there are others which are used technically to collect and analyze data into useful information for the organization and their customers. The Key Applications used at Infront are;
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FreshDesk (Support & IT/Operations) Freshdesk is a customer support ticketing software used by Infront to handle support tickets and delegating them to the correct persons. Also to follow up the requests on time. The Freshdesk system replaced the previous use of salesforce and it has been great for managing and meeting customer expectations.
FreshSales (Sales) Freshsales is also another product by FreshDesk. It is a great Customer Relationship Management (CRM) system. At Infront with their high velocity sales teams, it has been used to manage customer contacts and to manage the sales pipeline.
Ceeview (Monitoring Operations) Ceeview is an IT service monitoring and management system. At Infront it is used by the operations team to monitor the statuses of all the servers and feeds. The whereabouts of where it is deployed or monitored from is private and should not be disclosed.
O�ce Suite The o�ce suite at Infront is an all purpose tool used for creation and editing of all kinds of documents needed from day to day tasks such Word for creating Reports, Excel for Graphs, Powerpoint for presentation, Outlook for managing email etc.
Exchange Infront hosts their own exchange server, this server handles all the mails for the Infront domain. This provides employees internally with some level of security while exchanging delicate information.
Skype for business Skype for business is used for meetings and chat between colleagues, customers and partners.
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Trello Trello is used as the kanban board for project management. Trello is a starting point for any project as it provides a whole lot of choices of creating boards, lists, cards, labels, deadlines etc which enables the employees and product managers to organize and prioritize tasks as well as monitor project/employee progress.
Atlassian Con�uence Con�uence is used as an internal wiki for Infront where there is a searchable collection of documentation related to development, sales, external providers etc.
Slack Slack is used as a messaging/social networking tool within the organization. It provides employees from multiple locations within the organization a common platform for chatting and communicating during/after working hours. This also makes remote employees more welcome as they feel part of the day to day communication.
Xledger At Infront Xledger is used mainly for the organization's �nance and expenditure. A small team handles this task.
Organizational Structure of IT at Infront AS There is only one central IT department at Infront, and that is located in the OSLO o�ces. This department handles IT for all the other o�ces and other departments local and remote.
Development and IT In the past, IT operations and development have been distinct groups, but now they are more and more getting uni�ed with a DevOps Strategy. Now Developers are expected to handle more and more operations like deployment and con�guration concerning what they have developed. In fact developers enjoy this freedom of not having to rely on the operations to roll out their work.
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Support and Client Management Support is very close with the IT and Operation department, this is because a lot of the support tickets are related to IT and operations. Support uses the system named FreshDesk as mentioned above. This is a platform for handling customer support requests. The support team adds tickets to the systems so that they can handle the requests themselves or escalate it to IT and Operations.
Sales Sales uses FreshSales. The sales team uses Freshsales to manage the sales pipeline as well as to manage the customer contacts.
Administration The CFO who is in charge of the Administration mainly deals with and connects with other departments. Other then that the administration team is quite small. There is about 2 to 3 employees working there and they mainly manage expenses of the organization internally using two key applications - Xledger and Excel.
Current IT Governance Before de�ning IT Governance and how it managed at Infront we will outline the de�nitions from Weill & Ross, and will use these to guideline our point of view. Their de�nition of governance is the following:
“We de�ne IT Governance as specifying the decision rights and accountability framework to encourage desirable behaviour in using IT” (Weill & Ross: Ch 1:p.2)
IT governance is not meant to rule speci�c IT decisions. It determines who systematically manages these decisions, and outline what their role is. Infront manages many assets, and amongst there are �nancials , people, systems plants, and customer relationships. Systems are usually fairly rigid, but business, and business goals, are always in constant change.
E�cient IT governance is attained through various means; clarifying business strategies and what role IT plays in achieving them, measuring and managing resources spent and valued from IT, assigning accountability and adapting usability of IT assets. All these need to be governed through an e�cient set of rules and roles in order to be successful. Weill and Ross had this to say about governance:
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“Good governance design allows enterprises to deliver superior results on their IT investments” (Weill & Ross: Ch 1:p.3).
Through the interview and attached business structures we will answer these questions:
- What decisions have been made to ensure e�ective management and use of IT?
- Who takes these decisions? - How are these decisions made and monitored?
These questions are also to be cross aligned with the �ve IT Governance Concepts as outlined by Weill & Ross; IT Principles, IT Architecture, IT Infrastructure, Business Application Needs and IT Investment and Prioritization.
We will answer these questions through three key sources obtained during the project. Through the Planning Phase (ref. Gantt chart timeline), we planned and executed a set of exercises to obtain the information we needed. We then derived these into the following sources:
- The organizational structure - The government matrix - In-depth interview
The organizational structure
We are able to answer the two �rst questions by looking at the structural table above, seeing how the company has structured itself in order to ensure e�ective management and use of IT. Infront, which considers itself to be in the startup phase, is not structurally very large.
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At the very top you have the CEO, who maintains a close relationship with middle management. The middle management then branches responsibility and governance over their respective departments. As the CIO mentioned in the interview that delegating decisions by de�ning roles and responsibility is the key. Decisions that fall into either of the categories, with examples such as Support or Administration, will tackle the task within their departments. Issues or decisions of larger importance are sent upwards throughout the structure.
Infront`s individual o�ces have their own internal structures, but keep close communication with the CEO and CTO to maintain a uniformed company pro�le.
Looking back back at the interview with the CIO he mentioned in the beginning of the interview that even though they did not have an o�cial IT governance set up in their company, he did believe in using a system that is “best of breed”. His thoughts are inclined to using services which best serves the purpose of the task or sector.
Most major decisions as mentioned above are made higher in the organizational structure but each department plays an important role in marking their opinions and sharing higher up the hierarchy.
The Governance Matrix
Table 1: IT Governance matrix
The Governance Arrangement Matrix is a grid that outlines what decisions must be made and who should make them. The Matrix will help answer this question in detail. What the IT Governance Matrix describes is as follows;
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The following are systems of decision makers:
Business Monarchy : Top Managers are making the decision.
IT Monarchy : IT specialists are making the decision.
Feudal : Each business unit making independent decisions.
Federal : Combinations of the corporate center and the business units with or without IT people involved
IT Duopoly : IT group and one other group are making a unform decision.
Anarchy : Small group decision making
The following are a set of organizational principles that govern the organisation:
What we see in Table 1 from Infront’s Governance Matrix in short is (and being governed by:)
IT Principles: Input decisions is Business Monarchy and Output Duopoly.
IT Architecture: It is both duopoly and anarchy based for input and output decisions.
IT Infrastructure: Input and Output decisions are both Duopoly.
Business Applications: Both Input and Output decisions are Federal
IT Investment: Both Input and Output decisions are Duopoly.
The Governance Arrangement Matrix above shows us that Infront concentrates on making IT decisions based on Business monarchy, federal, duopoly and anarchy as archetypes. Also we can see that the company leans more on Duopoly when it comes to making IT decisions. These sets of decision-making are making us able to answer the third question: How are these decisions made and monitored?
From the matrix we see that duopoly dominates must of the decisions on the company, especially IT infrastructure strategy , IT architect and IT investment because companies’ like to combine two groups to make IT decisions for example; a business unit IT meeting would include the IT department and the business unit leaders.
Recalling from the interview we get the following explanation of why they are following this self tailored matrix. For example, “I and Martin (CTO) work closer together than this, so we work together and present to Martin (Head of product), Kristian (CEO), Max (CFO) and Joachim (Head of sales) about what we should do the next 4-5 months” . From this we see why duopoly works perfectly as archetypes
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between chief and make decisions together about product. We see that the company is using business monarchy as an input when it comes to IT principle, because top managers who clari�es the business role and decisions of IT.
For the business application needs, the company is using a federal as an input and decision, because the company determines the application needs and combines it with IT people. When it comes to last archetype company is using to make decisions is anarchy in It architecture both for input and decision, because the are a small group how makes decisions and de�ning integration and standardization requirements.
All in all so far we know that the CTO and the CIO cooperate very closely, and the CTO is the cofounder, so he has personal interests in everything happening within the organization. At present and in long term they want to avoid “word of mouth” that is they want to avoid have direct communication between the customers and the development team. Of Course the Sales and the production team should be part of the process but communication should be open in an organized way between the sections.
Other External Relationships of the Company Infront has two classes of partnership, the two are: data providers and technology providers.
Data Providers The data providers Infront has partnership with provide Infront with the data that they view in the terminal. One of the providers Infront have the closest connection with right now are SIx (Bank and data provider). Six discontinued their terminal Six Edge in Sweden, that is when Infront and Six made a deal, where Infront buys the Six Edge user base and for that buys data from Six. Other less close example are Factset.
A few other data providers who are not completely external but are stated as subsidiaries on the website are;
In�nancials
In�nancials is a leading provider of equity analytics, part of the Infront group since 2012.
TDN Finans
TDN Finans is a real-time supplier of news about and for the Norwegian share and
interest-rate markets, providing Norwegian brokers, management companies, listed
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companies, private individuals and the media with price-driving, leading news. It is
owned by the Infront Group, was founded in 1989 and has o�ces in Oslo.
Nyhetsbyrån Direkt
Nyhetsbyrån Direkt has been ranked the best Swedish newswire for more than 15
years in a row. It is the most widely used news source in real time among professional
users in the Swedish �nancial market, and later on also among the private investors.
SME Direkt
SME Direkt is a part of Nyhetsbyrån Direkt and is the leading and independent
consensus estimate service in the Nordic region when looking at market expectations
of the listed companies.
Technology Providers Infront also have external partnership where they integrate technology. This can be features like portfolio management systems or data analysis. Some examples of external company relationships are Escali and FA Solutions.
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Analysis of IT Governance and IT Management at Infront
Overview of IT Governance and the Weill and Ross Framework
Why is IT Governance needed? IT Governance is a smaller part of the big organizational discipline - the Corporate governance. IT Governance is focused on informational technology and it measures the performance of IT and it’s risks at a company. At one point companies did not need IT Governance, but as companies continue to grow and IT starts to play a more vital role at larger organizations, IT Governance is needed to better manage the IT tools involved and the people who are responsible for creating this value.
The institutional de�nition of IT governance is “... leadership, organizational structures and processes to ensure that the organization's IT sustains and extends the organization’s strategies and objectives.” [7]
With this in mind we can understand why Infront as a startup company looking to grow further would need a more structured IT governance at their company.
The Weill and Ross Framework The Weill and Ross Framework has been our main guidance to understanding and implementing IT governance at Infront.
They de�ne IT governance as: The decision rights and accountability framework to encourage desirable behaviour in the use of IT.” [5]
They also further Identify three components of IT Governance which helps answer three questions:
- IT Decision Domains - What are the key decision areas for IT? - IT Governance Archetypes - Who is in charge of these decision domains? - Implementation Mechanism - How is the decisions implemented in place?
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IT Decision Domains
IT Principles: Decision statements on the Role of IT and how it should be used.
IT Infrastructure: Foundation strategies on service coordination, how to keep them upto date and the costs involved.
IT Architecture: Guidance for technical choices; policies, principles, rules of conduct for IT usage involving technologies, data, applications etc.
Business Application Needs: Specifying what is important in terms of business practices and operations. This includes internally developed systems, purchased products, outsourced work etc.
IT investment: Decisions on how much to invest in IT and what sectors require more investment, whether it’s new projects, renewing old projects or budget for hardware, purchased product etc.
IT Governance Archetypes
The governance archetypes refers to the people involved in making the organizations IT decisions at an organization. It answers the questions on who governs the IT decision domains, how the decision hierarchy is organised and who the key input and output key decision makers are. The Weill and Ross framework suggests six archetypes:
Business Monarchy: Top management group or senior managers from each team together make the IT decision of whole organization.
IT Monarchy: CIO and a group of IT teams make the decisions as a whole.
Feudal: No central governance. Unit leaders or middle class management leaders make their own team decisions.
Federal: involves joint collaboration between senior managers and local managers.
IT Duopoly: Two part cooperation involving the CIO and one other individual from another team to make decisions for that team.
Anarchy: Groups or individuals make independent decisions.
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Implementation Mechanism
Using Weill and Ross’s choice of decision domains and governance archetypes, a one page framework is derived which helps to model the organizational structures and the processes involved. This in turn helps to decide how governance should be implemented.
Below is an example of the framework and how the Current IT Governance is at Infront:
IT Principles
IT Architecture
IT Infrastructure
Business Applications
IT Investment
Input/ Output
I O I O I O I O I O
Business Monarchy
x
IT Monarchy
Feudal
Federal x x
IT Duopoly
x x x x x x x
Anarchy x x
In the past we have discussed how IT governance is currently at Infront which is re�ected in the above table. Now we will concentrate more on how to Implement the framework to improve the governance at Infront.
The Weill and Ross framework helps to get an overall view of how decisions are currently made. This framework is used by organizations to map out how IT governance is managed currently and through analysis of the model a new and improved framework is suggested for better decisions.
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As discussed above the model provides the three following categories to specify how decisions should be acted out:
Decision making structure: Who is responsible? Who is accountable?
Alignment Processes: Validating that the decisions made will lead to the business goals.
Communication Approaches: Communicating the responsibilities and the governance processes involved to those who are responsible for the processes.
How to assess IT Governance? Assessing of IT Governance is making right decisions and accountability framework to increase IT use, and helping us to understand and encourage governance performance. There is a way to how managers can make a good IT governance in their companies, there is �ve important factors which can make good assessments: enterprise setting, governance arrangements, governance awareness, governance performance, and �nancial performance . We need to consider each of these factors to get best possible assessing governance performance.
Application of Weill and Ross Framework on Infront
As we have already discussed the current IT Governance at infront on the �rst part of our report, here we focus on applying Weill and Ross’s Framework on Infront and from that derive a better working IT Governance Matrix for them to implement.
First we will discuss what governance gives us top IT performance and then compare it with the company and what the company can do to have better IT Governance, What governance arrangements work best? We will then discuss how to provide better input, after that moving to what works best to make better decisions. From the book there research shows that enterprises with higher governance performances are using federal as an archetype input model for better governance when it comes to IT principles and business applications need. On the other hand, enterprise with lower governance are using duopoly as an archetype input for the same decisions as the higher enterprisers.
In general, the book recommends federal governance arrangements as a start point for all inputs to all IT decisions. The federal inputs provide a combination of the corporate center and the business units with or without IT people involved. That means the federal model provides a trade-o� between the senior managers and the managers in the business units, furthermore they can choose if they want to include IT stakeholders when it comes to make decisions.
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So the question is why the small enterprise are using the duopoly models as input (Infront)? The answer is that the model is typically restrictive meaning that the input to IT and corporate with other group create often a feeling for not involving them through the process. That makes duopoly model very e�ective when it comes to making decision rather than providing better inputs.
What is considered Best and Worst Governance Performance?
There is no currently way or theorem to tell us what or how to make a good IT governance. Multinational professional services �rms, company worldwide and a variety of businesses told us that is di�cult to come to conclusion about making the best It governance, because we cannot �nd an infrastructure to guide us to the best It governance.
Some quote from di�erent Senior managers from the book: ‘’we were not making best use of our opportunities … the business case for an IT initiative included costs for the project itself, with some infrastructure thrown in. We used a full chargeback model, so the �rst project needing a particular piece of infrastructure had to pay the entire cost of creating it’’
This quote illustrates a nature of IT governance for large companies. Every senior management has there own de�nition of making a good IT governance. For example, if we get ten di�erent managers into one room, we are going to get more than a one de�nition from each manager. There are some questions which can help to obtain better It governance:
How can we assess governance?
What governance arrangements work best?
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Here is a �gure from the book which illustrates best and worst governance performances:
+ top performance - poor performance
IT Principles
IT Architecture
IT Infrastructure
Business Applications
IT Investment
Input/ Output
I O I O I O I O I O
Business Monarchy
IT Monarchy
Feudal -
Federal + - - - + -
IT Duopoly
- + - +
Anarchy
If we compare this �gure with the one we made for the company (Infront) , we see that the Infront matrix is poor in same places and matches top performance in others, furthermore we see that most of the infront matrix is dominated by duopoly which makes it poor for input models but rich on making decisions.
Why Duopolies worked best for decision making at Infront?
Basically the reason duopoly works so well at Infront now is because most meetings involve the CiO and CTO working together. Also since the CTO and CEO are founders of the company and as a “small startup” they still continue to be part of every decision that is made at Infront as a whole. All forms of Ideas are always discussed and presented to the CEO which makes it Business Monarchy. Sometimes Sales, Finance and other teams are part of the infrastructure and business application decisions thus making it Federal. When it comes to IT Investment Plans usually all top managers are presented with the inputs before �nalization thus making that also Federal.
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So overall we can see that Infront is using duopoly as models for IT Architectures and IT infrastructure Strategies, which from the “top performance point of view makes - Infronts’ decision ine�cient. Referring to the �gure below collected from a research paper presenting “Top 3 IT Performers” and their best practices duopoly models should be used to make decisions over IT principles and IT Investments. This model approach enables joint decision making between the business managers and IT group, allowing them to make creative solutions and discuss it with the business group. Unlike federal models, where managers need to balance interest of the center and the business unit.
So all in all what we noted with Infront’s use of federal and duopoly is that this makes the IT Governance very decentralized and such a governance pattern may result in maximum autonomy to business unit managers (great innovation here), thus encouraging entrepreneurship but little regard to standardization which can a�ect a growing company looking to be more “organized”.
As Weill and Woodham mentions on their research paper [8] -
“When governing IT, there is a tradeo� for most �rms—balancing the responsiveness
of the business process owners to their local customers and sharing and standardizing the use of IT assets within the �rm. “
Therefore when we came to think of proposing a new governance model, we took into consideration the company's current operating model and how we can make slight adjustments to make their governance e�cient without causing too much disruption to their current working model.
Apart from best practices for high performance, we also came across IT Governance patterns that most organizations follow. It’s marked in orange on the matrix below. We noticed that Infront somewhat follows a similar pattern too.
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Referring to the book [5], In Chapter 5 We came across another explanation on �gure 5-6; Who makes better IT Decisions - Business or IT Managers?
Decision Rights (%) + Top
Performers * - Poor
Performance * = No Di�erence * Statistically signi�cant relationship with governance performance
Business IT Joint
Business - IT principles - Business
Application needs - IT Investment
-
29
=
7
+
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IT - IT Architecture - Infrastructure
- 5
= 27
= 8
This explains best performance, poor performance and what change makes no di�erence to the output of the governance model. They derived three general principles from their analysis which seems to apply well with Infront where there CTO is also one of the founders and is part of almost all IT and business decisions.
- Business and IT Professionals should collaborate on business-oriented IT decisions (investment, principles and business application needs)
- Business people should not make business-oriented IT decisions alone. A better fusion is business with IT thinking.
- The best arrangement of decision rights for technical decisions depends on other factors such as the synergies between business units, the current IT portfolio, strategic goals, industry di�erences and so on.
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Together with all principles and arguments in place, we proposed a matrix according to our analysis in the following table:
X - current governance X - proposed governance Orange box represents most common pattern followed by organizations
IT Principles
IT Architecture
IT Infrastructure
Business Applications
IT Investment
Input/ Output
I O I O I O I O I O
Business Monarchy
X X X X
IT Monarchy
X X
Feudal
Federal X X X X X X
IT Duopoly
X X X X X X X X X
Anarchy X X
This matrix of course does not map directly to the complex underlying structure of the organization's operational model but it outlines the proposed decision making structure, which seems to be a key area for improvement for a growing company.
However in the next section you will �nd the discussion on the operational model structure followed by how the proposed governance matrix can be integrated into their operational model.
Going back to an overview of the proposed governance model based on the operational model, we will discuss what decisions need to be made, who should make the key (input/output) decisions and how decisions should be formed.
This should further help us identify possible areas for improvement related to IT governance and IT management in the organization under study.
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IT Principles
At Infront currently decisions on IT Principles looks like Business Monarchy as decisions are made by top management teams. This is because as a small company senior business executives made all IT decisions plus the CEO and CTO are also the founders and the CTO takes part in all decision making from start to end.
A proposed solution would be to use Federal as the Input decision makers, as this allows all central team representatives to be part of the input decisions. Further on allowing business monarchy in output decision allows the �nal approval to be made by the top business leaders of the organization. But at the same time, this would not make much of a di�erence in the governance as a whole, thus we think it’s best to keep IT Principle governance the way it is.
IT Architecture
IT Architecture was governed mostly in the form of IT Duopoly and Anarchy, which seemed to work perfectly for a small organization. But as the company grows, thinking long term with external providers and sub-contracting companies becoming part of the companies architecture we propose the input decisions to be IT duopoly and �nal output decisions to be governed by IT monarchy.
This will allow each team to have their own meetings and �nalized decisions from each team will only be brought forward as inputs and the outcome will be decided by top IT managers such as the CTO and CIO making the decisions more inact.
IT Infrastructure
All decisions related to infrastructures were governed by IT duopoly so far as the CTO and CIO are part of every IT related meeting decisions with other departments. There is nothing wrong with this structure, but we felt that using IT Duopoly as input for decision making but �nal outcomes should be decided through Business Monarchy and if needed involve IT Monarchy in the process. This allows �nal decisions to be taken at a business level.
Business Application Needs
These decisions are governed purely Federal at Infront now, but we propose that business application needs in IT have IT Duopoly in input decision making. This will allow IT teams to be part of the discussion with other departments, thus being able to advice on best IT usage. Output and �nal decisions can be federal governed like they are now as this works �ne for most growing companies. Also because in the end the IT investment decisions are governed by top business o�cials.
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IT Investment IT investment and strategical decisions are currently governed by federal but we suggest that even if input decisions are federal the �nal investment plan should be governed through business monarchy.
Operational Model
Current operational model With the recent acquisitions of companies that Infront had done the two last years, it has become more and more important to identify their own operational model, and how they want it to be. Right now, Infront does not really have a clearly de�ned operational model. From the interview is mentioned that they let the new companies they have acquired to operate independently. Because they operate in the same sector, there will be overlap with the customers. They operate independently as their own business units. The IT system are managed by the central IT department at Infront, but the system and architecture design is still individual, the IT department only assist in general IT support. This indicated that the Infront tries to move the companies they have acquired from a diversi�cation state to a coordination model.
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What should be the goal Because the companies that Infront has acquired belongs to the same sector, they also share most of their customer base. Some of these companies are also directly integrating technology into the terminal, so it makes sense that they should follow the same standardized processes that the development team at Infront does. This will make the collaboration projects much easier to handle as they all follow the same processes and tools. Infront have already started doing this with In�nancials, as they collaborate closely with the development team. For these companies it makes sense to have a goal to achieve the uni�cation model.
Architecture
Customer-directed architecture Infront has an old legacy architecture for the customer-directed systems. The architecture is dominated by silo based systems. These systems do however have api access that is standardized, so other system can communicate with them. There is no centralized “biztalk” business bus that takes care of the communication between the systems. Because of the silo heavy system, it requires extra work to integrate new components to the system. The system is very service oriented, as all the components could be described as services that the terminal uses, but the architecture does have any service channels or bus to get the full potential of these services. What would be good here would be to try to convert the system to be service oriented and implement proper channels and a service bus to make it easier to include components to the system.
In-house architecture
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Infront uses a very heavyweight based system. Most of the channels connect directly to these systems and are not really supported by any lightweight systems. Infront is focusing more and more to support these lightweight systems, moving tools over to platform that support these systems better (trello, slack, etc). Right now infront is at a laissez-faire way of doing lightweight IT as there is up to each department how they do it and there is not really any o�cial support for it. The goal for infront should be to create a platform to get better support for lightweight systems, but they also need to focus more on the security aspects of the integration, therefore the best goal for infront is to achieve a bi-modal system.
Integrating IT Governance Strategy at Infront
In order to improve and integrate better IT Governance at Infront, we will look at relevant theory that could support what we know about Infront, and what could be done better. Centralizing the major IT decisions is something the company is good at, while other topics are not mentioned in great detail. According to Weill & Ross, top performers “design their IT governance to reinforce the their performance goal”
(Ref: Mis Quarterly, Summary Weill & Ross: p1), and something that could be clari�ed to truly show where the company is headed. Other aspects that re�ect good governance are to “measure and manage the amount spent and the value received from IT”. Seeing how a great deal of the governance Matrix is ruled by the state of anarchy, it is thus even more important to have clear way of measuring the output these groups represent. Another aspect is to “assign accountability” and decide who is to take action in case the ways of anarchy are performing poorly, or when new systems are being implemented. In addition the good IT governance gives insight how to “learn from each implementation, becoming more adept at sharing and reusing IT assets” (Ref: Mis Quarterly, Summary Weill & Ross: 2). If the organisation is mainly ruled by a set of anarchy and individual groupings, it is even more important to establish clear guidelines in terms of how work, improvements and solutions are shared between the di�erent parts of the organisation.
This is all in respect to the limited interview we had, but a thorough implementation of IT governance at Infront should look at these aspects:
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Critical Success Factors for good Governance
In addition to mapping up the company governance within a table, Weill & Ross look at eight critical success to successful IT Governance, which Infront could look at to improve their current state of governance in the organisation. (Ref: Mis Quarterly, Summary Weill & Ross: 16). These are the following:
Transparency: All decision-making should be available to all managers. The more transparency the more people would want to play by the rules and increase enterprise-wide performance.
Actively Designed: Rather than designing IT-mechanisms “by default”, - as they come along, managers should coordinate e�ort to build governance around an enterprise's objective and performance goals.
Infrequently Redesigned: A good governance design should infrequently require a redesign. A redesign is a major undertaking and requires six to eight months before fully adjusted into the organisation. By safeguarding the governance for case of failing economy or merges (such as with Infront acquisitions) the organisations keeps in touch with their enterprise goals and e�ective leadership.
Education about IT Governance: Education was something that was understated in the interview and something Infront can bene�t from to streamline the decision-making governance and philosophy within the company. “Educated users of governance mechanics are more likely to be accountable for the decisions they make and less likely to second-guess other decisions( (Ref: Mis Quarterly, Summary Weill & Ross: 16). Putting of some time for this would probably greatly bene�t the organizational decisions in the future.
Simplicity: Less clutter, and fewer, clearer goals make governance more e�ective. More goals require di�erent governance mechanisms to manage, and can quickly become complicated, con�icting or create undesirable behaviour. Infront is however handling this well, where smaller upcoming problems are tackled as exemptions further down in in the organizational hierarchy.
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An Exception-Handling Process: In terms of the high recurrence of anarchy-decision making at Infront, a exception-handling process is necessary to handle any unknown cases to the current IT governance strategy. A business owner or champion, along with an IT architect should draft a one-pager to justify the means on how to handle the exception. In the case of a decision not reaching a uni�ed acceptance it will be necessary to involve higher hierarchy structures to guide governance handling.
Governance designed at multiple organizational levels: This strongly applies to larger corporations that might have di�erent or con�icting governance in terms how divisions or departments work. Designing a governance on multiple levels is however strongly required, since Infront is branching out their business to several remote o�ces. In order to align the overall business goals Infront should set down solid governance rules for the remote locations to follow.
Aligned incentives: These should be carefully aligned with the IT governance set. If the rewards and incentives are driving a di�erent behaviour than the set governance, encouragement and structure will become less e�ective. If departments of the same structure and goal have di�erent reward scales, then a company such as Infront might ultimately experience behaviour and morality that is misaligned to the overall performance.
As a side note it is worth mentioning the governance acid test of Weill & Ross:
“Can the CIO leave the enterprise for a couple of months to perform due diligence on a potential merger and acquisition, and return to a company where the governance is working e�ectively, or does it require his leadership to function?!
(Ref: Mis Quarterly, Summary Weill & Ross: 17)
Due to the highly agile nature of the teams, it is natural to reference to some of the agile project methods, and how Infront could bene�t from using these.
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Conclusion For an organization to successfully implement a proper IT Governance structure, it needs to start a cycle of collaborating, updating and improving the proposed structures. This report will be presented and discussed with the CIO and other key stakeholders at Infront to further re�ne and �nalize a structure suited for them.
Once that is achieved, the implementation will consist of restructuring the stakeholder into committees, developing a company charter outlining the principles, functions, operating guidelines, external provider policies, subcontracting company leases etc.
The starting point would be to create a task force based on the organizational structure and divide the tasks among them to get a clear and e�cient workable structure.
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Reference [1] Infront: http://www.infront�nance.com/company
http://www.infront�nance.com/company/group/
http://www.infront�nance.com/Company/Leadership
[2] Ceeview: http://www.ceeview.com/product/
[3] Freshdesk: https://freshdesk.com/
[4] Atlassian Con�uence: https://www.atlassian.com/software/con�uence
[5] IT Governance by Peter Weill and Jeanne W Ross.
[6] IT and Management Presentation Slides by Bendik Bygstad
[7] Institutional De�nition of IT Governanc e collected from Board Brie�ng of It Governance
[8] Don’t just Lead, Govern: Implementing E�ective IT Governance by Weill and Woodham
[9] Don’t just Lead, Govern : How Top-performing �rms govern IT by Peter Weill
[10] IT Governance on One Page by Weill and Ross
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Appendix 1 - Interview
Disclaimer: The interview was conducted in Norwegian and translated into the following transcript. If any mis understanding or faults is found, this is to assure anyone that it is not
done purposely.
The interview was conducted with the current CIO of Infront, Espen Øverbye, he joined Infront in 2015.
What is Infronts IT principle? We do not have any o�cial principle. Morten (CTO) and I are having some discussion about how we should pull the company. I wish that we use system that is “best of breed” so that we use Slack where Slack is best, and Skype for Business where Skype is best. What must be our IT principle we should not have a company that is too strict and we end up with everyone running Windows 7 and Internet Explorer because they can’t upgrade, but not too loose so that anyone can decides what laptop they want, but to have it so that if they can argue for it, then they can get it.
What decisions are taken to ensure e�ective management of IT? De�ne roles and responsibility so that decisions can be made. The two worst scenarios are if you have a million discussions, but no decision and the second one are that everyone makes their own decisions. They tend to go together, as in you can end up with everyone making their own decisions while they are waiting for the main decisions that never gets decided. That is why it is important to delegate responsibility.
Key assets? This is something we do not have, but should have.
How do you foresight new development and potential business investments? What we do is that we have a large strategy meeting where we discuss what we should do more of, and what we should do less of. Should we do more trading, should we more web, what is most important? When we have a 4 th month meeting, we do such an evaluation together with sales. In a classic product development, business comes with an opportunity, product should visualize and think about the opportunity while development will create something that match and deliver. I and Martin (CTO)
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work closer together than this, so we work together and present to Martin (Head of product), Kristian (CEO), Max (CFO) and Joachim (Head of sales) about what we should do the next 4-5 months. We also weight in business cases, and always evaluate them against two ideal scenarios: The customers pay for the development and that we can resell it to another customer. Worst case is the opposite: That we will not get the development covered and we cannot resell it. In some cases, we accept, like with our project with Jyske bank, that they pay for 12 of 50 days of development, but because it is in the right direction that we want for the product and we can resell it, we chose to accept it. So, we try to have a conscious estimate, even if we don’t have a lot of analysis, that it is in the right direction or not. And the more o� the direction is, we should think about it harder if we should do it.
How do you identify new business needs that can potentially generate value? What we have started to do and we want to do more of is to make sure that we do not communication along only one path. This can be that the customer communicates with sales, and sales with product, and product to development. What we want is that development can communicate with the customers, and so on. This is to avoid “word of mouth” and that the thing that the customers want becomes di�erent when it reaches development, and that development can see what the customer really want and not necessarily know that they want (e. g asking for a faster horse when they really want a car).
Development done the creative way or discipline way? We lean towards the creative way. Something we have talked about and should do
more if is that we have said that we want to be number 3 in �ve, over 10 years, but we have never said anything about how we should achieve it. We are going to have a set of discussions about how we should make it probable. We need to think about what our customers do in 5 years, does the job he does still exists? That is one of the challenges we have today. We have been delivering pretty much the same thing the last 18 years, we do a little more web now, but that a very small part compared to streaming servers and the terminal. (Side story about DNB hiring 3 consultant team of 50 persons, where all of them developed the same product, because they had a very tight schedule, and the price for not be done by the time is more than the consultants.)
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What is the average investment in IT? We are a kind of re�nement company, we buy data, re�ne it, and sell it to customers. We pay a lot for data, but this is also something we get back, so if we do not account for the data cost, then salary is the largest cost. We are about 70 people, and 25 of them are in IT, so that is about 40% of the cost is for IT. If we are optimistic, then we can say that 60% is investments, and 40% is operations. Then you get 29%.
Are the any major ERPs involved? Not really. We used salesforce before, now we use Freshdesk and Fresh sales. We have two di�erent classes of IT systems, those that we use to run the shop, and the ones that are directed towards our customers. Our customer directed system are very old fashioned and everything run on old hardware, C++ and Windows. It works, so that is not the reason the throw it out. We run half of it on cloud services, and we host mail and skype for business ourselves. We have started to use services like azure on web, but our customer directed systems is something we host ourselves, and not really virtualized either.
Infront group cooperation and data integration. Both Direkt and In�nancials have been data providers that we have bought content from. They have a culture that match our organization, and they are so good at what they do that we decided that it is better if we own them than our competitors. They have been allowed to control themselves, so they operate a little bit di�erently. Direkt sales to our competitors, because of their market and brand, but In�nancials, they also sell to our competitors, but less. They both have their own boards, but is a subcontractor as if they were an external subcontractor.
External cooperation and data integration. We have a set of partnership with other companies. Primary we have two kinds of categories, data providers and technology providers. Among the data providers, Six is a special case, as we have bought their customer base (Six terminal discontinued in Sweden) and we use their data. So it is a lot closer cooperation than with the other providers. We have technology partners where we integrate for example portfolio management systems into our terminal, so that they can buy and sell and get updates on their portfolio in the terminal (Escali, FA Solutions and others). And we have a new category that is in its early stages, where we have partners like Symphony. We expressed in our strategy that we want to deliver 80% of the value with 20% of the cost. So we try to be good with our API so that we can make sure that our partners can integrate and deliver on the more specialized cases, so that we can focus on the larger ones.
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Appendix 2 - Gantt Chart
