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Information Technology Management (ITM101) Week 02: IT Standards & Governance Matthew W. Stephan: CISM, CISSP, CGEIT, CRISC, PMP.

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Presentation on theme: "Information Technology Management (ITM101) Week 02: IT Standards & Governance Matthew W. Stephan: CISM, CISSP, CGEIT, CRISC, PMP."— Presentation transcript:

1 Information Technology Management (ITM101) Week 02: IT Standards & Governance Matthew W. Stephan: CISM, CISSP, CGEIT, CRISC, PMP

2 Corporate Governance: Leadership by corporate directors in creating and presenting value for all stakeholders IT Governance: Subset of the Corporate Governance framework tasked with ensuring the alignment of IT with enterprise objectives IT governance aims to ensure that expectations for IT are met and IT risks are mitigated. Governance?

3 The purpose of IT governance is to direct IT endeavors and that IT is aligned with business objectives. Ideally:  Governance should be a top- down process  Linkages to business process and strategy exist for all actions  Information in oral, paper, and electronic forms  Governance transcends physical boundaries  Through governance, acceptable practices, policies, and procedures are established Business DriversInternal EnvironmentEntrustment FrameworkDecision Model and Framework Value Realization and Delivery Framework Performance ManagementValue Management IT Governance Objectives

4 Five main focus areas for IT governance, all driven by stakeholder value.  Two are outcomes:  Value delivery  Risk management.  Three are drivers:  Strategic alignment  Performance measurement  Resource management (which overlays them all) Focus Areas of IT Governance

5 ISO Family (1799, 20000, 27001) International Standard Organization ’s Security Managemen t Standards Framework of standards that provide best practices for information security manageme nt ITIL IT Infrastructur e Library Best practices framework drawn from the public and private sectors internationa lly COSO Committee of Sponsoring Organization s of the Treadway Commission Organizatio n dedicated to financial reporting through business ethics, internal controls, and corporate governance COBIT Control Objectives for Information and related Technology Framework and supporting toolset to bridge the gap between control requirement s, technical issues, and business risks FISMA Federal Information Security Managemen t Act of 2002 Mandatory set of processes required by legislation for US federal information systems OCTAV E Operationall y Critical Threat, Asset, and Vulnerability Evaluation Risk based strategic assessment and planning technique for security CMMI Capability Maturity Model Integration An approach to governance based on process maturity IT Governance Frameworks

6 Val IT Principles IT-enabled investments will: Be managed as a portfolio of investments Include the full scope of activities that are required to achieve business value Be managed through their full economic life cycle Value delivery practices will: Recognize that there are different categories of investments that will be evaluated and managed differently Define and monitor key metrics and will respond quickly to any changes or deviations Engage all stakeholders and assign appropriate accountability for the delivery of capabilities and the realization of business benefits Be continually monitored, evaluated and improved

7 The Four Questions The strategic question. Is the investment: In line with our vision? Consistent with our business principles? Contributing to our strategic objectives? Providing optimal value, at affordable cost, at an acceptable level of risk? The value question. Do we have: A clear and shared understanding of the expected benefits? Clear accountability for realising the benefits? Relevant metrics? An effective benefits realisation process over the full economic life cycle of the investment? The architecture question. Is the investment: In line with our architecture? Consistent with our architectural principles? Contributing to the population of our architecture? In line with other initiatives? The delivery question. Do we have: Effective and disciplined delivery and change management processes? Competent and available technical and business resources to deliver: The required capabilities? The organisational changes required to leverage the capabilities? Some fundamental questions about the value enabled by IT

8 P3M—Projects, Programs and Portfolios Portfolio Management Program Management Project Management Program—A structured grouping of projects designed to produce clearly identified business value Project—A structured set of activities concerned with delivering a defined capability based on an agreed schedule and budget Portfolio—A suite of business programs managed to optimize overall enterprise value

9 What fits where? Board / Senior Executive Business Management IT Operations IT (Functional Mgt) Auditors

10 Outsourcing Benefits: Access to Expertise and Technologies  Access to expertise and the deployment of new technologies  rapid technological developments require a significant portion of the human resources capacity of internal IT divisions and require high investments in the training of IT professionals.  An IT supplier whose core business consists of the delivery of IT services is able to keep the level of knowledge of its IT professionals up to date more effectively and efficiently.

11 Outsourcing Benefits: Increase in the Level of Flexibility  Increase in the level of flexibility  Due to the fact that an IT supplier has several customers, the IT supplier is better able to absorb the peaks and valleys in the demand for IT services than the internal IT division, which generally only provides services to its parent organization.

12 Outsourcing Benefits: Decrease in Costs  Decrease in costs  Due to their scale and ability to share production resources, IT suppliers are able to provide more efficient and effective IT services  Increase the predictability of costs:  Outsourcing contracts are generally multi-year contracts  This increases the predictability of costs for the outsourcing organization.  This is an important advantage, particularly for investors.

13 Outsourcing Benefits: Generation of Cash Flows  The generation of cash flows  Through the sale of assets, hardware and immovable property, the outsourcing organization is able to generate a one-time cash flow by outsourcing its IT services.

14 Outsourcing Disdvantages: Management of IT Suppliers  Management of IT supplier(s)  The management of IT suppliers requires the attention of the management of the outsourcing organization and this carries its own costs.  Furthermore, many organizations have difficulty finding qualified managers to assume this role.

15 Outsourcing Disdvantages: Confidentiality  Confidentiality  Outsourcing arrangements cause the outsourcing organization’s confidential data to be accessible to the IT supplier’s employees  This constitutes a risk that must be considered when the decision to outsource is taken  Dependency on the IT supplier(s):  By entering into a multi-year contract, outsourcing organizations become dependent on their IT suppliers, particularly when there are changes in IT services required by the outsourcing organization

16 Outsourcing Disdvantages: Dependency on the IT Supplier  Dependency on the IT supplier(s)  By entering into a multi-year contract, outsourcing organizations become dependent on their IT suppliers,  Particularly when there are changes in IT services required by the outsourcing organization.

17 Outsourcing Disdvantages: Confidentiality  Confidentiality  Outsourcing arrangements cause the outsourcing organization’s confidential data to be accessible to the IT supplier’s employees  This constitutes a risk that must be considered when the decision to outsource is taken  Dependency on the IT supplier(s):  By entering into a multi-year contract, outsourcing organizations become dependent on their IT suppliers, particularly when there are changes in IT services required by the outsourcing organization

18 Outsourcing Disdvantages: Dependency on the IT Supplier  Dependency on the IT supplier(s)  By entering into a multi-year contract, outsourcing organizations become dependent on their IT suppliers,  Particularly when there are changes in IT services required by the outsourcing organization.

19 Projects  The three main goals of project management are… 1. Complete the project on time or earlier. 2. Complete the project on budget or under. 3. Meet the specifications to the satisfaction of the customer.

20 Project Structure  Functional Structure:  The team is housed in a specific functional area. Assistance from other areas must be negotiated.  Pure Project:  Team members work exclusively for the project manager, which is best for large projects.  Matrix Structure:  A compromise between the functional and project structures. Members remain in various functional areas and the project manager coordinates across functional areas. Dual authority can cause problems.

21 What AON Nodes look like. Early Start Early Finish Late Finish Late Start Activity Activity Duration Slack The earliest you can complete an activity--determined by adding the activity time (duration) to the early start time. This is the latest you can finish an activity without delaying project completion. It is the same as the Latest Start time of the next activity. If there are two or more subsequent activities, this time is the same as the earliest of those “Latest Start” times. The is the earliest you can start an activity. It is determined by the earliest finish time of the precedent activity. If there are two or more precedent activities, this time is the same as precedent activity with the latest “Early Finish” time. This is the Latest Finish time minus the activity duration. Slack (S) is the difference, if any, between the earliest start (ES) and latest start times (LS) or the early finish (EF) and late finish (EF) times. S = LS - ES or S = LF - EF

22 Types of Project Risk 1. Service/Product Risks: If the project involves new service or product, several risks can arise.  Market risk comes from competitors.  Technological risk can arise from advances made once the project has started, rendering obsolete the technology chosen for service or product.  Legal risk from liability suits or other legal action. 2. Project Team Problems: Poor member selections and inexperience, lack of cooperation, etc. 3. Operations Risk: Information inaccuracy, miss- communications, bad project timing, weather…

23 Types of Project Risk 1. Service/Product Risks: If the project involves new service or product, several risks can arise.  Market risk comes from competitors.  Technological risk can arise from advances made once the project has started, rendering obsolete the technology chosen for service or product.  Legal risk from liability suits or other legal action. 2. Project Team Problems: Poor member selections and inexperience, lack of cooperation, etc. 3. Operations Risk: Information inaccuracy, miss- communications, bad project timing, weather…

24 Breakdown of IT spending Investment – new/improved capabilities * Maintenance, Operations, and Ongoing support of Systems and Equipment 30% 70% IT MOOSE* IT Spend Support current business at current business volumes Budget CategoryConsiderationsAverage % of IT New IT investments: Projects that deliver new business capabilities These projects were likely conceived and approved before the lean times began. 20% Projects to improve IT efficiency Waste creeps in when IT is busy completing other work on behalf of the business. 9% IT MOOSE*: Maintenance and smaller enhancement activity against applications Maintenance budgets are often based on previous year with little year to year scrutiny. 15% Operational costs of applications and services, including software licenses and support Inattention to detail over time can create waste in licensing and contractual maintenance fees. 19% Data centre and networking costs Data centre and networking costs Reduced business can correlate to reduced requirements for storage and computing capacity. 19% End user support, including desktop software What level of support/time between desktop upgrades is appropriate during lean times? 10% Administration, planning, architecture, and IT management Can you shift deployments of administrative or architecture staff to more tactical assignments, temporarily? 7% Forrester Research Inc. (2008): ” Budget Adjustments For CIOs In Lean Economic Times” Support business growth Reduce cost of business Reduce cost of IT MOOSE

25 Adoption of ITIL and Other Frameworks Brings Discipline and Efficiency to IT Ops 25  The Information Technology Infrastructure Library (ITIL) standardizes IT terminologies to establish guidelines and a common language for IT operational processes like:  Change management,  Problem resolution,  Service delivery, and  Resolution of customer inquiries.  Other frameworks include:  COBIT (control objectives for information and related technology)  ISO 17799  These frameworks help companies standardize:  IT operations,  Management processes, and  Practices  Helps lower costs by:  Reducing unplanned and unscheduled work and  Making it easier to adopt and implement cost-reducing technologies

26 Server virtualization lowers hardware costs and reduces administrative burden 26  The proliferation of smaller Wintel and Linux servers has started to escalate the costs of scale-out/scale- up efforts,  Drives greater staff costs to administer and provision the burgeoning number of individual servers.  With virtualization, the decentralize/recentralize pendulum swings back toward centralization as small mainframes and even larger Unix servers, become the new platform on which to consolidate hundreds of virtual servers  Lowering software licensing costs  Lowering server administration staff costs.

27 Questions answered by the Local Contingency Plan:  WHO: Designates individuals and invests them with authority  WHAT: Expectations and procedures associated with an incident  WHEN: The tasks that need to be performed before, during, and after an incident  WHERE: Identifies key locations for incident planning and response, including locations of emergency equipment, escape routes, and indoor post- evacuation rendezvous points  WHY: Protects people and serves as a gateway to continuity  HOW: Explains the way your department should prepare and respond Introduction: The Local Contingency Plan


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