1. Copyright Andrew J. Clark 2007. This work is the intellectual property of the author. Permission is granted for this material to be shared for non-commercial, educational purposes, provided that this copyright statement appears on the reproduced materials and notice is given that the copying is by permission of the author. To disseminate otherwise or to republish requires written permission from the author.

2. IT Governance: Establishing Who Decides Andrew J. Clark (Syracuse University) OR

3. Value of organization’s IT 1. My interest in Governance 2. Ineffective governance symptoms 3. Why is it important - who cares? 4. IT Governance model 5. Conclusion

4. My interest in IT Governance Recent reading/researchRecent reading/research New CIO at SUNew CIO at SU Functional area relationshipsFunctional area relationships Enterprise thinkingEnterprise thinking IT Governance by Weill & Ross

5. What is Governance? In the English language, “governance” is an old term which, like “civil society”, fell into disuse, but which has been revived, given new meaning, and attained widespread currency. Like “government” and “governor”, it is derived from the Latin work “gubernare” – the action of steering a ship. A popular definition reflects these ancient Roman roots by defining governance as “steering, not rowing. [ In the English language, “governance” is an old term which, like “civil society”, fell into disuse, but which has been revived, given new meaning, and attained widespread currency. Like “government” and “governor”, it is derived from the Latin work “gubernare” – the action of steering a ship. A popular definition reflects these ancient Roman roots by defining governance as “steering, not rowing. [1] [ 1] [1] [1] MacLean, Don, “Herding Schrodinger’s Cats: Some Conceptual Tools for Thinking about Internet Governance”, page 6, Background paper for the ITU Workshop in Internet Governance Geneva, 26-27 February 2004. Accessed November 15, 2005. Available at http://www.itu.int/osg/spu/forum/intgov04/contributions.html Internet http://www.itu.int/osg/spu/forum/intgov04/contributions.html

6. What is Governance? “Providing the structure for determining organizational objectives and monitoring performance to ensure that objectives are obtained.” [ 2] [ 2] [ 2] [2] [2] “OECD Principles of Corporate Governance, Organization for Economic Cooperation and Development, Directorate for Financial, Fiscal and Enterprise Affairs, SG/CG (99) 5 and 219, April 1999

7. What is IT Governance? 3. Wikipedia Information Technology Governance, IT Governance or ICT Governance, is a subset discipline of Corporate Governance focused on information technology (IT) systems and their performance and risk management 3.

8. What is IT Governance? (continued) 4 4. Holland, Norma, EDUCAUSE Leadership Program, June 2005 Describes the rules and procedures for making and monitoring decisions on strategic IT concerns. IT governance is the term used to describe how those persons entrusted with governance of an entity will consider IT in their supervision, monitoring, control and direction of the entity.

9. IT Governance is: 1. Decision rights 2. Accountability 3. Desirable behaviors The assignment of decision rights and the accountability framework to encourage desirable behaviors in the use of IT.

10. Symptoms of ineffective governance Low IT value Low IT value IT barrier to strategies IT barrier to strategies Ineffective IT mechanisms Ineffective IT mechanisms Can’t explain governance Can’t explain governance Projects late & over budget Projects late & over budget Outsourcing seen as fix Outsourcing seen as fix Changes frequently Changes frequently

11. Why is it important? IT Costs / Business value IT Costs / Business value New business models New business models Business risk Business risk Dependence on other entities Dependence on other entities Essential business knowledge Essential business knowledge Business’s reputation Business’s reputation

12. Why is it important? (2) Research findings: Thoughtful design leads to above average returns on IT investments Percent of executives who can describe IT governance.

13. Governance Model Three Major Components What decisions need to be made? What decisions need to be made? (Domains) (Domains) Who has decision and/or input rights? Who has decision and/or input rights? (Styles) (Styles) How are the decisions formed and How are the decisions formed and enacted? (Mechanisms) enacted? (Mechanisms)

14. 14 What Decisions Need to be Made? ( Domains) There are five major decisions domains 1. Principles 2. Infrastructure strategies 3. Architecture 4. Business application needs 5. Investment and prioritization

15. 15 Who has Decision & /or Input Rights? (Styles) 1. Business Monarchy 2. IT Monarchy 3. Feudal 4. IT Duopoly 5. Federal 6. Anarchy

16. 16 Key players in Governance Archtypes 5 C-levelITBiz Business Monarchy √ IT Monarchy √ Feudal√ IT Duopoly √√ √√ Federal√√√ √√ Anarchy 5. Weill, P. & Ross, J.W. (2004)

17. 17 How are Decisions Formed & Enacted? (Mechanisms) Decision-making structures Decision-making structures Alignment processes Alignment processes Communication approaches Communication approaches

18. 18 Mechanisms: Decision-making structures 5 Decision-making structure % using CIO Rank Executive or senior management committee 89 % 3.5 *** IT leadership committee comprising IT executives 85 % 3.8 Process teams with IT members 84 % 3.4 *** Business/IT relationship managers 83 % 3.9 *** IT council comprising business and IT executives 71 % 3.7 Architecture committee 66 % 3.1 Capital approval committee 55 % 3.1 5. Weill, P. & Ross, J.W. (2004)

19. 19 Mechanisms: Alignment Processes 6 Alignment Process % using CIO Rank *** Tracking of IT projects and resources consumed 96%3.4 *** Service-level agreements 88%3.2 Formally tracking business value of IT 62%2.9 Chargeback arrangements 61%2.8 6. IBid

20. 20 Mechanisms: Communication Approaches 7 Communication approach % using CIO Rank *** Work with managers who don’t follow the rules 90%3.2 Senior management announcements 88%2.9 *** Office of CIO or Office of IT governance 85%3.6 Web-based portals and intranets for IT 79%2.9 7. Ibid

21. 21 The Governance Model The “Harmony ‘What-How’ Framework” Strategy GovernanceArrangementsPerformanceGoals DesirableBehaviors GovernanceMechanisms Metrics & Accountabilities HowHowHow WhatWhat WhatWhat

22. 22 The Governance Model The “Harmony ‘What-How’ Framework” Strategy GovernanceArrangementsPerformanceGoals DesirableBehaviors GovernanceMechanisms Metrics & Accountabilities HowHowHow WhatWhat WhatWhat

23. 23 Mapping Styles Against Domains DomainsPrinciplesArchitectureInfrastructure Business Applications Investment & Priorities Styles Inpu t DecisionInputDecisionInputDecisionInputDecisionInputDecision Business Monarchy IT Monarchy Feudal Federal Duopoly Anarchy

24. 24 SU’s Mapping of Styles Against Domains DomainsPrinciplesArchitectureInfrastructure Business Applications Investment & Priorities Styles Inpu t DecisionInputDecisionInputDecisionInputDecisionInputDecision Business Monarchy IT Monarchy Feudal Federal Duopoly Anarchy √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √

25. 25 Mapping Styles Against Domains DomainsPrinciplesArchitectureInfrastructure Business Applications Investment & Priorities Styles Inpu t DecisionInputDecisionInputDecisionInputDecisionInputDecision Business Monarchy 0 IT Monarchy 1 Feudal Federal Duopoly Anarchy 0 83 15 00 36 14 3 18 2706071121 30 7359 20100809 001211803 465981933027 2730 46 153023176 34 00110031

26. 26 How Top Financial Performers Govern 8 PrinciplesArchitectureInfrastructure Business Needs Investment & Priorities Business Monarchy ProfitGrowthProfitProfitGrowthProfitGrowth IT Monarchy Profit FeudalGrowth FederalProfit DuopolyROAROAROAROAROA

27. 27 Non-Profit IT Governance More Business Monarchies More Business Monarchies Less IT Monarchies Less IT Monarchies More Federal decision arrangements More Federal decision arrangements More Federal input arrangements More Federal input arrangements More IT duopolies More IT duopolies

28. 28 Top 10 Leadership Principles 1. Actively design governance 2. Know when to redesign 3. Involve senior managers 4. Make choices 5. Clarify exception handling

29. 29 Top 10 Leadership Principles (continued) 6. Provide right incentives 7. Assign ownership & accountability 8. Design at multiple levels 9. Provide transparency & education 10. Implement common mechanisms

30. Questions ?

31. References Board Briefing on IT Governance, Available from http://www.isaca.org Click on Governance, then on Downloads, and scroll down to Anonymous Access Board Briefing on IT Governance, Available from http://www.isaca.org Click on Governance, then on Downloads, and scroll down to Anonymous Accesshttp://www.isaca.org Broadbent, M. & Kitzis, E., The New CIO Leader: Setting the Agenda and Delivering Results, Cambridge, Harvard Business School Press, 2004 Broadbent, M. & Kitzis, E., The New CIO Leader: Setting the Agenda and Delivering Results, Cambridge, Harvard Business School Press, 2004 Lane, D, CIO Wisdom: Best Practices from Silicon Valley’s Leading IT Experts, Upper Saddle River, Pearson Prentice Hall, 2004 Lane, D, CIO Wisdom: Best Practices from Silicon Valley’s Leading IT Experts, Upper Saddle River, Pearson Prentice Hall, 2004 McCredie, J. (2006) Improving IT Governance in Higher Education (Research Bulleting 18). Boulder, CO: EDUCAUSE Center for Applied Research. Available from http://www.educause.edu/ecar McCredie, J. (2006) Improving IT Governance in Higher Education (Research Bulleting 18). Boulder, CO: EDUCAUSE Center for Applied Research. Available from http://www.educause.edu/ecarhttp://www.educause.edu/ecar McNurlin, B.C. & Sprague Jr, R.H. (2004) Information Systems Management in Practice, Upper Saddle River, Pearson Prentice Hall. McNurlin, B.C. & Sprague Jr, R.H. (2004) Information Systems Management in Practice, Upper Saddle River, Pearson Prentice Hall. Weill, P. & Ross, J.W. (2004), IT Governance: How Top Performers Manage IT Decision Rights for Superior Results, Boston, Harvard Business School Press Weill, P. & Ross, J.W. (2004), IT Governance: How Top Performers Manage IT Decision Rights for Superior Results, Boston, Harvard Business School Press

32. Contact Information: Andrew J. Clark Syracuse University Chief Process Architect E-mail: ajclark@syr.edu