IQPC
IT Governance Summit 2006IQPC
IT Governance Summit 2006This year’s annual event drew an audience comprising mostly IT professionals – an imbalance lamented by experienced non-executive Director Chris Gillies. Chris was one of several speakers in a conference that contained a few interesting points of view.
Gartner’s Managing Vice-President of Executive Programs, Mary-Ann Maxwell, delivered a comprehensive discussion of the evolution in thinking about IT Governance. She opened by suggesting that the conference attendees would encounter a barrage of definitions of IT Governance (thankfully, there were relatively few).
Maxwell said that IT Governance reaches beyond the traditional sphere of IT to engage the whole organisation, involving new stakeholders, new principles for decision making, and new processes to drive the decisions. In this light, she said, many CIO’s are struggling with how to craft an effective system of IT Governance, and she emphasises that IT Governance cannot replace organisational leadership.
Gartner’s research appears strongly linked to that of Peter Weill (Author of IT Governance: How Top Performers Manage IT Decision Rights for Superior Results) and his colleagues at MIT’s Sloan Business School Centre for Information Systems Research. It considers, among other things, Decision Domains, Decision Rights and Governance Mechanisms.
Gartner says that more than 75% of organisations have ineffective IT Governance in 2006. The firm’s clear, but perhaps surprising (for some) advice is that, for most, it is not practical to evolve the current approach – it would be better to discard and rebuild. This advice is given against a strategic outlook of accelerating pace of change, raising the stakes several orders of magnitude. Ms Maxwell provided a five point self-test where organisations scoring less than 15 out of a possible 25 should start over, those with scores between 15 and 19 should evolve their current approach and those scoring 20 and over should consider themselves very well placed (gold standard). (Infonomics uses a 12 point quick-check to assess IT Governance performance- see our discussion of the Borland Briefings for further information).
One of several Gartner predictions shared at the conference, is that the performance gap between leaders and followers will widen. The leading organisations will be those “that understand how to generate real business advantage from fusing technology, business process design and business relationships”. Maxwell said that this translates directly into a need for a changed IT Governance, that operates on a broad and inclusive basis to drive IT priorities for the organisation. As part of this, she identified three new areas (domains) in which decisions need to be made – Sourcing Strategies, Enterprise Architecture and Business Processes. The changes will see the business take greater leadership and the governance emphasis shift from technology to business process.
SENSIS CIO Chris Stevens reviewed the essentials of his organisation’s IT Governance. Against a plan to double the company’s revenue in five years, he said that 80% of Sensis capital investment plan is based on IT. He described Sensis approach to IT Governance as focusing on eight points: Business strategy, Portfolio investments, (IT) Strategy and Architecture, Relationship, Pipeline, Planning & Design, Proper execution and Operational performance.
Michelle Kinnane, National Manager of the Applications Branch in Customs gave an overview of the scope of activities within the Customs umbrella, described current governance arrangements, and advanced her view on the events of October 2005.
She described Customs approach to Governance as being “about decision making to control, direct and influence the likelihood of successful business outcomes. Customs IT governance defines the accountability framework to determine the IT services, architecture, standards and policies that assist in delivering our successful outcomes”.
Customs’ list of IT Governance challenges is extensive – the multi-divisional structure; organisation wide project prioritisation; multi-sourcing; b2b service delivery and interdependencies; and changing business and security landscapes are just some of the points.
In discussing Cargo Management Re-engineering, Ms Kinnane explained the background to the initiative, the dimensions of the Customs workload; and the statistics of the project. She identified six governance lessons:
Seamless Governance: This is about going outside the organisation’s borders. Customs was driving industry wide change and should have set up an appropriate governance framework across the entire scope of the change.
Governance is not discrete: There are levels of governance, and it must be ongoing. Governing IT well within a poorly governed overall program of business change will not lead to a good outcome. Set and forget does not work.
Competing priorities: Governance is not necessarily consensus. Hard decisions sometimes must be taken.
Conscious compromise: The initial emphasis on trade facilitation was overtaken by a greater emphasis on security in the wake of the September 2001 terrorist attacks. Effort is needed to ensure that governance processes are not undermined by opinion shopping.
Business alignment: Business governance must drive IT Governance. It can be too easy to retreat to domains where IT is in control – losing sight of the big picture.
There is no panacea for change: it takes particular and persistent effort which must attend to all aspects of change – nothing happens of its own accord.
In summary, she said that the governance model was not right for the initiative. Each entity governed its own part of the initiative, but there was never any overall governance to resolve the fragmentation.
Infonomics comment: We congratulate Michelle Kinnane on her open discussion of the governance problems that contributed to the problems of October 2005. Her messages are entirely consistent with our understanding of the Booz Allen Hamilton report, and should be heard by all Australian organisations – not merely those dealing with the business of government.
Reading between the lines to some extent, and taking into account press reports and other comments we have seen, we have formed the view that Customs IT Governance has been, to date, very much focused on the Delivery of ICT, with the matters of Use and business process being the responsibility of others. Clearly, this is an inappropriate arrangement and could be described as a fundamental contributor not only to the disastrous disruptions of October 2005, but to the overall litany of failings in the overall program, as set out in the Booz Allen Hamilton report.
In addition to the very clear messages in AS8015, the advice of Gartner as delivered by Mary-Ann Maxwell on day 1 of the conference reinforces that narrowly focused approaches to IT Governance are well past their use by date and are inappropriate.
The bottom line is that, no matter how smoothly your system of governance operates, if it’s established on the wrong underlying principles, it won’t work – and if it won’t work, it needs to be changed – and fast!