Panel Discussion – Sharing Industry Knowledge
Successful Business/IT Alignment, Execution & Governance Best Practices: Why, What and How? Practices Society for Information Management March 15, 2006 Dr. Gad J. Selig, PMP, COP Managing Partner, GPS Group, Inc., Director Technology Management & Dual Graduate Business Degree Programs & Director, Associate Professor, Management & Technology, University of Bridgeport Cell: (203) 521-9664 E-mail:
[email protected] SIM March 15, 2007 Panel
©Copyright, GPS Group, Inc., 2007. All Rights Reserved.
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Objectives • Discuss the major j issues,, opportunities, pp , strategies, g , processes and techniques to improve the effectiveness and level of maturity of IT services: - Business/IT B i /IT alignment li t and d value l delivery d li - Execution of program/project initiatives - On-going operational and infrastructure services - Performance management, governance & compliance • Share industry knowledge and experiences with key business and IT leaders: - What worked? Why? - What did not work? Why? - What areas can be improved? How? SIM March 15, 2007 Panel – Work-in-Progress as of 2/18/07
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Panel Members: • Dr. Gad J. Selig, PMP, COP – Moderator: Director, MS in Technology Management and Dual Graduate Business/Engineering Degree Programs, Uni ersit of Bridgeport and Managing Partner, University Partner GPS Gro Group, p Inc. Inc
• Neal Bronzo – Senior Vice President and CIO, The Pepsi Bottling Group • Atefeh (Atti) Riazi - Senior Partner and CIO, Ogilvy and Mather Worldwide
• Stuart E. E Werner – Senior Vice President and CIO CIO, Footstar Footstar, Inc Inc.
SIM March 15, 2007 Panel – Work-in-Progress as of 2/18/07
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The Board’s Role in IT Governance
Executive Summary
“ IT
Governance is the responsibility of the Board of Directors and executive management. It is an integral part of enterprise governance and consists of the leadership p and organizational g structures and processes p that ensure that the organization’s IT sustains and extends the organizations strategies and objectives.” IT Governance Institute Board Briefing, Second Edition, 2003
Lesson: Governance should be tailored to each organization’s operating philosophy, issues, opportunities, level of maturity, audit/legal requirements and cultural readiness. readiness
SIM March 15, 2007 Panel – Work-in-Progress as of 2/18/07
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Executive Summary Top Issues and Concerns of CIOs* 1. Align IT strategy with the business strategy and governance 2. Meeting the business needs effectively 3. Infrastructure and service management (reliability and scalability) l bilit ) 4. Coping with accelerating change (and become one of the key y drivers of innovation)) 5. Dealing with senior management and the board (get a seat at the “C” table 6 Managing costs, 6. costs budgets and resources (internal & external) 7. Keeping up with technology 8 Recruiting 8. R iti and d retaining t i i staff t ff 9. Executing projects effectively (time, cost & resource g ) management) 10. Maintaining skills and knowledge (continuous learning) * Source – www.cio.com/state-modified-2006 SIM March 15, 2007 Panel – Work-in-Progress as of 2/18/07
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Definition and Objectives of Governance
Executive Summary
Governance formalizes and clarifies oversight, accountability and decision rights. • Align IT investments and priorities more closely with the business based on value delivery • Ensure that IT delivers on its plans, budgets & commitments • Manage risks, vulnerabilities and contingencies proactively • Improve IT/Business demand management management, VOC, VOC performance performance, compliance, security, maturity, privacy and overall customer/constituent satisfaction • Manage, evaluate, prioritize, fund, measure and monitor requests for IT services and the resulting work and deliverables, in a more consistent and repeatable, yet flexible and scalable manner
SIM March 15, 2007 Panel – Work-in-Progress as of 2/18/07
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Executive Summary
“Firms with “Fi ith superior i IT governance had h d 20% higher hi h profits fit than th firms with poor Governance given the same strategic objectives.” Dr. Peter Weill Dr Weill, Director of the Center for Information Research , MIT (Based on a recent study of 250 enterprises in 23 countries)
“Over 75% of businesses today have ineffective or nonexistent IT Governance. Most enterprises should “blow up” their existing governance models and star from scratch.” Susan Dallas, Gartner
SIM March 15, 2007 Panel – Work-in-Progress as of 2/18/07
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Integrated IT Alignment, Execution & Governance Framework and Roadmap Identifies the major areas that must be addressed on the journey to a higher level of IT governance maturity and effectiveness Areas of Work Business Plan/ Objectives (Demand Management & Alignment)
IT Plan, Objectives, Portfolio Investment and Approvals (Demand Management & Alignment)
IT Plan Execution & Delivery (Resource Management)
Performance Management, Controls, Risk, Compliance and Vendor Management
Description/Components • Strategic Business Plan – Vision, Objectives, Financials, Operations, SWOT, Imperatives (Must Do’s), Initiatives (Alternatives that Support Imperatives), etc. • Capital Planning/Expense Planning & Budgeting • Business Performance Management (Key Metrics) • Executive and Other Steering & Review Councils; Organization Structure
• • • •
• IT Plan is aligned with the Business Plan – IT Capital/Expense Budget • IT portfolio investment, rationalization, selection, prioritization, funding and approval (Portfolio Management Model (for New, Change Programs and Projects and/or Operational and Infrastructure Functions) • Fund development and infrastructure initiatives • IT Performance Management (Define Metrics and Measurement Criteria)
• IT Strategic/Tactical Plan/Metrics • Portfolio Mgt. Model (Investment Criteria); ITIM • Engagement Model - Roles • Business Rules & Authorization • McFarlan, McFarlan Cash; Luftman; Popper; Selig
• Tactical, Project and Operating Plans (Project Plans and Budgets) • Policies, Standards, Guidelines & Processes (e.g. Management Control, Enterprise Architecture Security, Architecture, Security PMO, PMO ITIL, ITIL etc.) etc ) • Processes ( PMO, Help Desk, Security, Administrative SOPs, Workflows, ITIL, etc.) • Financial, program, project, application, maintenance and operational accountability
• Assess Implications of PMMM, PMBOK, CMMI, ITIL, SDLC, CoBit, Security (ISO 17799), Prince2 Frameworks on Company’s P Processes • Infrastructure & Operational Integrity, Continuity & Security • Risk Management
• • • •
• Balanced Scorecard & KPIs • Performance Management • RFI, RFQ, RFP and Contract Management; • Sarbanes-Oxley ++ Compliance • Management Controls/Cobit
Manage and measure plans, plans budgets programs programs, projects projects, operations & risks Define and track critical success factors and key performance indicators (KPI) Compare plans to actuals and take appropriate corrective actions Outsourcing and Vendor Selection, Tracking, Measurement & Management
• Human capital development • Organizational, Project & Operational Maturity Models and Standards • Managing Change and Transformation (e.g. culture, interoperability) SIM March 15, 2007 Panel – Work-in-Progress as •of Training 2/18/07 and Certification (e.g. ©Copyright, Inc., 2007. All Rights Reserved. IndividualGPS and Group, Organization) People Development & Continuous Process Improvement
Deliverables/ References Plan Document Financials Balanced Scorecard Metrics BCG; Porter; Hamel
• Adopt Current and Emerging Industry and Government Best Practices Standards & Guidelines • PCMM; OMB 300; ISO; ITIM • Career Development and Certification
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Successful IT Alignment, Execution & Governance Is Built on Three Critical Pillars • Leadership, Organization, Decision Rights and Metrics – defines the organization structure, roles and responsibilities, decision rights, a shared vision vision, managing change proaactively and meaningful metrics metrics.
• Flexible and Scalable Processes – the IT/Business alignment, execution & governance model places heavy emphasis on the importance of process implementation and improvement (e.g. Portfolio Investment, Program/Project Management, IT Service Management (ITIL), Risk Management, Performance Management, etc.)
• Enabling Technology – Leverage leading tools that support the key IT alignment, execution and governance processes. People Technology SIM March 15, 2007 Panel – Work-in-Progress as of 2/18/07
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Process 9
IT Strategy & Governance – A Future State Blueprint Concept (Illustrative Example) • Business and IT Leads are defined for each of an enterprise’s core business process area
Strategic Planning (Business/IT Alignment Driven) . . core . . business . . . . process . . . . area . . submits . . . .its • Each SBU Requirements
• The Business and IT Leads for each core business process jointly develop and prioritize requirements, and agree on a strategic t t i alignment li t and investment plan
Functional/Corporate Needs (Finance)
• The IT Leads also serve as the Single Point of Contact to their respective Business Unit Leads, address requests for new/changing requirements and address all service issues
Business/IT Exec. Steering Council
Project 1 – New Initiative
Project 2 – Enhancement or Maintenance
Project Team
Project Team
. . . . . . . . . . . . . . . . . . • PMO tracks the status of each active project, helps resolve issues and escalates critical issues to a PMO Steering Committee via a dashboard, and authorizes change management activities
Infrastructure Programs
Project Team Program Management Office (PMO)
Project Team
…
Project Team
• Business/IT Exec. Steering Council council sets top-down IT spending targets and allocation across business portfolios, reviews all strategic roadmaps and investment plans, prioritizes IT opportunities across all areas, defines key programs, approves final roadmaps and conducts periodic program/operating reviews
…
…
• Each Program Manager initiates projects as specified on the approved roadmap by forming cross-functional Project Teams
Business Intelligence
• The Business and IT Leads complete more detailed business cases for programs in the roadmap
Application Development (Metric Driven)/Programs/Projects • IT establishes a Program Manager and budget for each key program approved by the Exec. Steering Council
strategic roadmap together with business justification for review and approval, and finalizes them based on decisions made by the Business/IT Exec. Steering Council
Project Team
• Project Teams receive formal authorization from PMO before initiating and closing projects, and releasing to production
• Each Project Team executes its project by following well defined, repeatable methodologies/processes, and technical architecture standards • Each Project Team draws its key resources from common pools of internal Centers of Excellence, but outsources where appropriate
User Groups
Service Support (Metric Driven)
Customers
SLA’s KPIs
User Support
Suppliers Employees p y
• Internal or outsourced
Compliance
SIM March 15, 2007 Panel – Work-in-Progress as of 2/18/07
Change/Risk Management • Internal resources plan and manages changes/risks using ITIL ITIL-compliant li t processes
OLA’s KPIs
Service Delivery (Metric Driven) Planning & Implementation • Internal resources plan and deliver services using ITILcompliant li t processes
• All processes are documented and monitored for compliance
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Infrastructure/ Operations
• Internal or outsourced g resources manage each technology domain
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Select Business Questions for the Expert Panel •
How o do you align a g the t e IT strategy st ategy with t tthe e bus business ess strategy? st ategy What at processes/tools? Who is involved? What worked? What did not?
• How and in what areas is IT delivering value to your organizations? How is it measured? • How do you ensure that IT delivers on its plans and commitments and executes t effectively? ff ti l ? Program/Project P /P j t Management? M t? IT Service S i Management and Delivery? Security? Business & IT Continuity? Performance Metrics? Other? • How is IT developing/sustaining constructive and positive relationships with its customer community? Executive management? Vendors? • What IT controls, governance and compliance frameworks, processes, tools and techniques are being used? What worked? What did not? • Has your business aligned itself with technology, innovation, the customer and open to managing accelerating change? SIM March 15, 2007 Panel – Work-in-Progress as of 2/18/07
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Select Questions for the Expert Panel •
How is IT performance measured? What KPIs are used at CIO level? Above CIO Level? Below CIO level?
• How effective is IT in marketing and communicating its progress and performance results to its constituents? What tools and techniques are used? How often? • How do you sustain continuous improvement initiatives to increase the level of IT maturity and effectiveness, staff development, constituent ownership and decision rights? • How are you sustaining compliance processes and reporting? • Does the Board/Operating Committee/Senior Business leadership review and approve the IT strategy, priorities and funding? Major changes to plan, programs, budgets, etc.?
SIM March 15, 2007 Panel – Work-in-Progress as of 2/18/07
©Copyright, GPS Group, Inc., 2007. All Rights Reserved.
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Thank You!
Dr. Gad J. Selig, PMP Managing Partner, GPS Group, Inc., Director, Technology Management & Dual Graduate Business/Engineering Degree Programs & Associate Professor University of Bridgeport Cell (203) 521-9664 Cell: 521 9664 E-mail:
[email protected] SIM March 15, 2007 Panel – Work-in-Progress as of 2/18/07
©Copyright, GPS Group, Inc., 2007. All Rights Reserved.
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