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© 2006 Jupitermedia Corporation Webcast TitleIT Governance: Sound Management Practices that Deliver Results November 29, 2006 2pm EST, 11am PST George.

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Presentation on theme: "© 2006 Jupitermedia Corporation Webcast TitleIT Governance: Sound Management Practices that Deliver Results November 29, 2006 2pm EST, 11am PST George."— Presentation transcript:

1 © 2006 Jupitermedia Corporation Webcast TitleIT Governance: Sound Management Practices that Deliver Results November 29, pm EST, 11am PST George Spafford, Principal Consultant, Pepperweed Consulting

2 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results Housekeeping Submitting questions to speaker –Submit question at any time by using Ask a question section located on lower left-hand side of your console. –Questions about presentation content will be answered during 10 minute Q&A session at end of webcast. Technical difficulties? –Click on Help link –Use Ask a question interface

3 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results Main Presentation

4 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results Agenda What "IT Governance" entails IT Mission Considerations –Enablement –Risk Management Please either George or Kendra for a copy of this PPT

5 © 2006 Jupitermedia Corporation Webcast TitleIT Governance: Sound Management Practices that Deliver Results Why should we care?

6 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results Why Governance Gets Attention AT Kearney Technology Innovation Study: –72% of business leaders believe IT enabled their business strategy but only 30% are fully aligned –45% of respondents believe IT is primarily focused on day-to-day requirements –70% identify technology innovation as critical yet 80% of actual IT investment is focused on infrastructure and core operation Projects –$600 billion spent on ill conceived or poor executed IT projects – Gartner –71% of IT projects fail or are challenged – Standish Operational Processes –80% of availability problems caused by human error – IDC –45% of operating expense budget consumed by unplanned work - ITPI

7 © 2006 Jupitermedia Corporation Webcast TitleIT Governance: Sound Management Practices that Deliver Results What is governance?

8 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results Corporate Governance Defined Governance derives from the Latin word gubernare relating to the rudder and steering of a ship "Corporate Governance is concerned with holding the balance between economic and social goals and between individual and communal goals. The corporate governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources. The aim is to align as nearly as possible the interests of individuals, corporations and society." -- Adrian Cadbury in Global Corporate Governance Forum, World Bank Corporate governance is the set of processes, customs, policies, laws and institutions affecting the way a corporation is directed, administered or controlled. Corporate governance also includes the relationships among the many players involved (the stakeholders) and the goals for which the corporation is governed. The principal players are the shareholders, management and the board of directors. Other stakeholders include employees, suppliers, customers, banks and other lenders, regulators, the environment and the community at large. – Wikipedia

9 © 2006 Jupitermedia Corporation Webcast TitleIT Governance: Sound Management Practices that Deliver Results So what is IT Governance?

10 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results IT Governance The overall objective of IT governance, therefore, is to understand the issues and the strategic importance of IT, so that the enterprise can sustain its operations and implement the strategies required to extend its activities into the future. IT governance aims at ensuring that expectations for IT are met and IT risks are mitigated. – IT Governance Institutes Board Briefing on IT Governance It arose from a lack of discussions about IT at the Board and strategy levels –Often times IT is only discussed with capital is needed –Organizations that had strategic IT discussions at the Board level outperformed competitors over the past five years – AT Kearney –The management of IT should be no different than any other functional area. In short, IT Governance outside of the Board level is really concerned about sound management and not governance per se

11 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results So, Whats the Goal?

12 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results To Maximize Sustainable Profits And the business knows this best. Alignment problems arise when IT goes around the business and pushes solutions.

13 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results Theory of Constraints Dr. Eliyahu Goldratt – Israeli Physicist Organizations are systems of business units assembled to achieve a goal If there isnt a goal, there isnt a system Throughput accounting –Inventory is money tied up in the system –Operating Expenses are monies consumed creating units of the goal –Throughput is the conversion of units of inventory into units of the goal –We want systems that improve throughput while driving down inventory and operating expenses Constraints are what inhibit attainment of the goal We want to identify constraints and then act to drive them down to increases systemic throughput Need to recognize that we are dealing with a system and focus on system throughput – not just local optimizations If we cant relate activities to the goal, then why are we performing the activities? Resource –Domenico Lepore and Oded Cohen. Deming and Goldratt – The Theory of Constraints and the System of Profound Knowledge. North River Press –Eliyahu Goldratt. Beyond the Goal: Eliyahu Goldratt Speaks on the Theory of Constraints. Coach Series [Audio Book on CD]

14 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results What Is Constraining the Goal? When properly designed and implemented, IT is a force multiplier that empowers functional areas to attain their objectives in support of the Goal.

15 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results Improving the Organization * Adapted from ITIL Service Support Graphic

16 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results Value Enablement Positive Force Multiplication vs. Negative Force Multiplication

17 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results Quality Management Quality means conformance to requirements – Phil Cosby This means –IT must understand the customers requirements –IT must meet the customers requirements –This assumes that the customer and IT understand the goals of the organization and how functional area objectives support them After WWII in Japan, Ishikawa used to tell the people on the manufacturing line that the people in the next step were their customer

18 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results Business IT Alignment (BITA) Need the business engaged with IT and not just IT in a vacuum Technology Pull vs. Technology Push IT Service Management – services that meet customer requirements both today and in the future Primus inter pares –First among equals – IT and other managers working together –IT may know the technology but the business knows the business even better –IT and the business must leverage each others strengths and compensate for each others weaknesses –Requires dialogue, regular meetings, … and lots of hard work! –Roles & responsibilities must be understood It cant just be IT – this is an organizational culture issue Who better than logistics to argue for a new IT logistics service with IT playing a supporting role?

19 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results Communication Barrier Need to speak in terms of enabling objectives and goals while managing risks –Focus on business and customer needs, technology is secondary Need to focus on terms that are mutually understood IT must avoid geekinese and understand what management needs –For example discussing requirements for a two page summary report vs. a forty page report that serves up lots of content but little information Communication must be on a regular schedule in a venue and format that maximizes senior managements attention

20 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results Tone At The Top Senior management must support IT in deeds as well as words Just get it done can destroy all the organizational change work done to date Recognize that IT must be engaged the same as any other technical group

21 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results Strategic Planning IT and the business must work together to accomplish objectives IT needs to understand strategic plans in order to support the business and the business must understand ITs capabilities IT projects and resulting services are costly and can impact the quality of business services rendered – they need proper planning –No different than planning for new production plants Recognition of IT value, not just cost Board level IT strategy committee

22 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results Steering Committee Visibility and involvement into the direction of IT Set within context of strategy Steering committee defines –Priorities –Tracks status of projects

23 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results Service Development Lifecycle Quality standards around development projects –Requirements definition –Coding standards –Testing –Identification of best practices –Migration to production –Documentation –Evidentiary requirements –Roles and responsibilities Resource –Carnegie Mellons Capability Maturing Model Integrated (CMMI) –Google

24 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results Project Management 29% of projects delivered on-time with expected features, 53% were challenged and 18% outright failed1 The majority of the causal factors are non-technical including: –Lack of project planning –Poor requirements definition –Correct stakeholders not involved, or not involved early enough –Poor communications –Insufficient management oversight Resources –PMIs Project Management Body of Knowledge (PM-BOK) –Projects in Controlled Environments Version Two (PRINCE2) –Google 1. Third Quarter 2004 CHAOS Report. The Standish Group.

25 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results IT Service Management (ITSM) Three objectives –Align IT Services with the current and future needs of the business –To improve the quality of IT services delivered –To manage long-term costs of services This is a change in mindset away from technology to one of enabling services and quality People, Processes and Technology Resources –Information Technology Infrastructure Library (ITIL) –IT Service Management Forum (itSMF)

26 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results Internal Audit Dr. Deming eschewed the Shewhart cycle of Plan- Do-Check-Act Audit plays an important role in organizations by performing a facet of the check function –Ethics –Regulatory Compliance –Process Compliance –Control and Process Improvement Opportunities Resources –The Institute of Internal Auditors (The IIA) –Information Systems Audit and Control Association (ISACA)

27 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results Risk Management Safeguarding The Goal

28 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results Why Is Risk Management So Important? Limited Resources and Seemingly Unlimited Risks! Companies need to understand and prioritize risks in order to safeguard functional area objectives and organizational goals

29 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results Safeguard the Goal IT must reasonably safeguard the Goal by reducing residual risk to an acceptable level.

30 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results What Is a Risk? The probability of a negative event impacting the realization of functional area objectives and/or organizational goals Does a risk matter if it doesnt impact a functional area objective or organizational goal? –NO Information Technologies are a threat vector In the end there is only business risk –It isnt IT that goes out of business! IT should be a stakeholder in a larger Enterprise Risk Management (ERM) effort Resource –COSO Enterprise Risk Management (ERM) –NIST

31 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results Use Controls to Manage Risk Risks cause variation around the achievement of objectives and goals Some variation is always present and inevitable By implementing processes with adequate controls, we strive to create a reasonable assurance that we can attain our objective Controls are found in –The services IT maintains and provisions –Within the applications users access Resource –Information Systems Audit and Control Association (ISACA) – Control Objectives for IT and Related Technologies (COBIT)

32 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results Dont Try to Eliminate Risk! Level of Assurance Level of Investment 100% You can spend a fortune and you will never truly hit a 100% level of assurance – its not possible The objective is to lower risk to an acceptable level, not eliminate it because that is not possible! Work with senior management and Internal Audit to define what level of residual risk is acceptable There is no prize for overly controlled processes – only costs, frustration and lost agility

33 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results Change Management Change Management is a risk management function and a foundation control 78-80% of unavailability is tied to human error The result: Delayed projects and the perception that IT can not get anything done As the levels of complexity and integration increase, so to does the need for effective change management otherwise forward momentum will stop and even reverse Properly designed Change Management can facilitate agility because productive work can actually be accomplished There is a huge difference between total changes and net successful changes –Being able to deploy 10,000 patches overnight can crash thousands of systems overnight! Need a company specific change management process that balances off risks to the organization with the business need to change Resources –ITIL Service Support volume –ITPIs Visible Ops methodology

34 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results Continuous Improvement PLAN DOCHECK ACT

35 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results Continuous Improvement What is needed today will be different than what is needed later Objectives, Risks, resources, and so on will all change over time Continuous Improvement is a necessity

36 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results Continuous Improvement * Adapted from ITIL Service Support Graphic

37 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results If something doesnt map to objectives and goals, then should it be done?

38 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results If something doesnt map to objectives and goals, then should it be done? NO

39 © 2006 Jupitermedia Corporation Webcast TitleIT Governance: Sound Management Practices that Deliver Results Thank you for the privilege of facilitating this webcast George Spafford Daily News Archive and Subscription Instructions Please either George or Kendra for a copy of this PPT

40 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results Questions?

41 © 2006 Jupitermedia Corporation IT Governance: Sound Management Practices that Deliver Results Thank you for attending If you have any further questions,


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