Why the growing interest in IT governance?
MISAJune 1st 2009
1
About us
• Founded in 1980• Public-sector focus• A history of IT Strategic Planning (1989)
2
Who we are
• Our strengths• Extensive public sector experience• Extensive experience in the development of information
technology & GIS strategic plans• Multi-disciplinary skills in integrating organizational design,
process re-design, technology and change management • Significant experience conducting organizational &
operational reviews • Major change management experience• Strong partnerships with client organizations• Enthusiasm, pragmatism and leadership skills
3
Some of our recent work
• IT Strategies• Waterloo, Oakville, Burlington, Whitby, Ajax,
Aurora, Whitchurch-Stouffville, Kawartha Lakes• GIS Strategies
• Region of Peel, Red Deer, Cambridge• Strategic Studies
• Mississauga, Business Application Simplification Strategy
4
Off proprietary solutions
PC technology
client server
Y2K
GIS
Best of breed:
CLASS,
AMANDA
Corporate applications
Consolidation
Y2K prep.
ERP
infrastructure environment/
build out
Training of users
GIS
IT out of finance
Corporate IT
Web
Governance
Prioritization of initiatives
Technical resources
Businessanalysts
Need to leverage
investments/ business
tools
1990’s 1995 2000’s 2005 2009…
5
Everyone wants to be …
…a technology leader in municipal services
6
Common current themes• Expectation vs. Delivery
– All municipalities have same expectations – Large or small – similar outcomes - too slow vs. not enough resources– Small organizations have big expectations– Demand/project overload
• Senior managers feel IT is out of their control– “We know we are failing – what do we need to do differently?”– IT feels like it is expensive – Juggling IT investments vs. other corporate priorities
• “Are we getting value for our IT investments?”
• IT is still a black box (lack of transparency)
• Operating & maintaining existing technologies consume a large % of resources (industry around 70%)
7
Common current themes
• Most projects fail to fully meet expectations– lack of accountability for project scope and decision making– lack of standardized process– unclear goals; effort underestimated– inability to say “STOP”
• Lack of shared accountability for IT projects
• IT is grappling with changing focus from technical to business enabler:– Business Analyst’s, Project/Program Managers
• Website is frequently poorly perceived but continues to be a high priority for administration
8
“Inadequate, and in many cases ad hoc IT governance, is one of the primary reasons why
perceptions do not meet reality”
IT Portfolio Management: Step-by-Step
9
IT environment has changed … • Small work group large corporate/enterprise
solutions• Inter-dependencies & integration complexity• IT projects are typically business transformation
projects supported by technology• IT projects are not engineering projects
– Inexact specifications– Managing change
• people, • processes
• IT projects must align with the business goals - otherwise why do it?
10
Reality check
• Technology presents infinite possibilities
• Can’t do all that your customers want to do
• Decide what the organization’s priorities are
• Requires collective decision making or senior direction setting
11
Why IT Governance?
“Tamed, an elephant can perform amazing feats. Untamed, an elephant is capable of …”
… causing total chaos.
IT Portfolio Management: Step-by-Step
12
Why is IT Governance important?
Firms with superior IT governance have at least 20% higher profits (performance)
than firms with poor governance
Weill & Ross, IT Governance
13
Define IT Governance
“Specifying the decision rights and accountability framework to encourage
desirable behaviour in the use of IT”
Weill & Ross, IT Governance
14
Define IT Governance
• Decision making groups (membership, inter-relationships)
• Policies & standards (architecture)• Methods (prioritization)• Measurement (performance)
15
Department/IT Alignment
16
Department/IT Alignment
17
IT governance is about
The need to engage… involve…
and educate
18
Typical municipal IT governance• IT director/manager responsible for budgets and
prioritization of projects
• Department head level may have some projects in departmental budgets
• SMT and/or Council– “This is a MUST-DO project” – imposes priorities
• IT steering committees (where they are present)– Dysfunctional– Low level & lack the ability to look holistically– Turns into an IT user group
19
Some are doing well where…• IT has credibility, respect & is trusted
• IT representation on SMT helps:– the corporation focus on priorities– allows IT to ‘hold the line’– ensure that the right resources are committed to solutions
• IT has defined professional standards & corporate policies are supported & endorsed
• Business recognizes the value that IT bring to the table
• IT is not seen as a bottleneck – IT has realized that its about getting things done – not being confined by its own capacity
20
Barriers to effective IT governance
• History• Workload too high • Lack of recognition of the need for governance• Corporate lack of knowledge and understanding of IT
– Happy to delegate• Conflicting corporate priorities• Disconnect between IT and the business on solutions• Budget process
– leads to under-estimation of resources – always struggling– Palatable (envelope approach) vs. real requirement
21
Increasing acceptance?
• Similar message for the last 10 years. What’s different now?
• We are getting acceptance at the senior level
• IT is now starting to be recognized as core to business service delivery
• CAO/SMT willingness to allocate time to IT
22
IT governance model
© MIT Sloan School Centre for Information Systems Research
23
Principles address
• Often widely accepted, but not documented, or visible– “Reuse before buy, buy before build”– “Technologies will only be implemented if they can
be sustained on an ongoing basis (departmental staff, maintenance costs, support resources)”
IT PrinciplesHigh level statements about how IT is used in the business
(against which all IT initiatives should be judged – does initiative A support the articulated principles?)
24
IT Architecture addresses
• Information architecture• Technology architecture• Standards• Policies which support, encode
and reinforce– K.I.S.S.
IT ArchitectureOrganizing logic for data, applications and infrastructure captured in a set of policies and relationships, and technical choices to achieve desired business and technical standardization and integration(deviations from standards should be fully justified and implications fully understood).
25
Call Centre
CRMCRM
Web/CMSWeb/CMSEmailEmail
Integration TechnologiesIntegration Technologies
Security Layer (AD/LDAP)
Network Layer
Data Storage Layer
BI/DashboardsCorp. ReportingBI/DashboardsCorp. Reporting GISGIS
PhonePhone
Corporate Infrastructure Layer
ePayePay eTaxeTax ePermitePermit
ePlanePlan eBookeBook eLicenseeLicense
Email Print ToolsServerIdentityPC
LetterLetter
CounterCounter
IVRIVR
311311
SMSSMSIMIM
Data WAN WiFi Voice
Intranet
Cell
eRequesteRequest
eEngageeEngage
Customer Service Platforms (Face to Face, Email, Telephone)Customer Service Platforms (Face to Face, Email, Telephone)
DBFile
Phone
Maj
orBu
sine
ss
Syst
ems
Infr
astr
uctu
re
Remote/Mobile Access
Cust
omer
Fac
ing
Syst
ems
Inte
grati
on
Simplified System View
SAN
LAN
NAS
Mobile
Enterprise Search
Enterprise Search
Customer
Customer
PropertyProperty
Infra, Asset & Work Mgmt
Infra, Asset & Work Mgmt
HRHR
ParkingParking
FleetFleetDispatchDispatch
Other …Other …
Planning, Building, Permit, License, Inspect,
Tax
Planning, Building, Permit, License, Inspect,
Tax
RecreationRecreation Finance & Budget
Finance & Budget
Document & Records
Mgmt
Document & Records
Mgmt
POS & POSWeb
POS & POSWeb
26
Business Applications are evolving
• Best of breed losing ground • Enterprise solutions gaining ground• Development receding – common platforms
(e.g. SharePoint)• Consolidation/rationalization of legacy &
customer apps needed • Compromise needs engagement, negotiation &
buy-in
Business Application NeedsSpecifying the business need for purchased or internally developed IT applications(adhering to IT architecture where appropriate)
27
Infrastructure service delivery evolving
• Centralized farm of servers (shared resources)
• Focus on sustainability • Business continuity visible at last• Expectations high IT Infrastructure
DecisionsCentrally coordinated, shared IT services that provide the foundation for the enterprises IT capability(promoting reuse of components)
28
Investment decisions• No conscious IT investment
management/strategy• Corporate IT budget process
– Business case (ROI)– Prioritization– Available capacity
• Portfolio management– Balanced portfolio
• High risk vs. low risk• Maintenance vs. new• Internal vs. external
IT Investment & PrioritizationDecisions about how much and where to invest in IT, including project approvals and justification techniques(ensuring that all projects that have a technology implication are fully considered, and to ensure that the portfolio is appropriately balanced [applications, technology, large -small, low -high risk])
29
Governance bodies
• Define responsibility for each domain• Bodies must be representative to achieve
corporate engagement• Corporate policy must support governance
bodies (including budget processes)• Governance bodies must be sustained and
reinforced (Council, SMT, Directors)
30
IT Users DirectorsMajor
Application Teams
PublicDefine
requirements and prioritise
requirements
Establish enterprise architecture & standards, manage and deliver
IT services, facilitate IT strategy & planning & IT investment process
Set objectives, approve strategies and plans,
establish IT investment priorities
Enforce principles and mandate of
Steering Committee
Endorse strategy and monitor
progress. Approve budget
31
IT
PrinciplesIT
ArchitectureIT
Infrastructure
Business Application
NeedsIT
Investment Accountabilities I D I D I D I D I D
Council • • • Endorse principles and strategy and monitor compliance
SMT • • • • • • • •Enforce principles, set objectives and KPI’s, develop IT strategy and plans and establish IT investment
priorities
IT Working Group • • • •
Facilitate processes for IT investment, IT plans and IT strategy.
Chaired by Corporate Services Commissioner
Departmental Directors • • • • • Define business requirements and
establish departmental IT priorities
IT Management
Team• • • • • • •
Establish and enforce enterprise architecture and standards. Plan,
deliver and manage IT systems and services
IT Users • • • Articulate IT requirements and priorities.
Enterprise Application
Teams• • • Articulate IT requirements and
priorities.
Public/External Customers • Articulate IT requirements and
priorities.
I = Input D = Decision32
Metrics
• Relevant Key Performance Indicators– Tailored to audience– Establish metrics that align with your customer’s
interest areas
33
34
Metrics
• Internal management metrics• Balanced scorecard (compare a suite of
factors)
• Annual/bi-annual IT customer survey
35
Benchmarking• Problems with benchmarking
– Information provided is rarely accurate• Population #’s are inconsistent• Staffing numbers are incorrect, inconsistent or misinterpreted• Budget figures are reported differently• Inclusivity of data is questionable i.e. is voice part of the network? Is the Fire
department or other boards supported?
• Comparisons with similar size municipalities are not always useful– They may be struggling with similar problems– Different levels of maturity of technical implementation– Benchmarking resources is the typical area
• Those that you are benchmarking against are typically under-resourced• Proximity to other major towns or cities can impact resource pool
36
Summary
• Good corporate IT starts with good IT governance• Recognise the signs
– Project overload, business IT disconnect, “leave it to IT”, project failures
• Formalize governance and raise the level of business engagement– Educate, engage and involve senior decision makers
(size, impact, opportunity, capacity)– Let them see/share your pain
• More work (transparency + education is two-way)– Leaders, departments and for IT
• Stick the course, the rewards will come
37
Book recommendations
IT Governance: How Top Performers Manage IT Decision Rights for Superior ResultsPeter Weill & Jeanne W Ross
Managing IT as a business: A survival guide for CEO’sMark D. Lutchen
IT Portfolio Management: Step by StepBryan Maizlish, Robert Handler
38