1. Business 2.0
Business and IT fusion
Lecture 7: IT Governance and
Standards
Dr Raymond Young (MBA, GAICD)
Raymond.young@canberra.edu.au
CRICOS #00212K
© Raymond Young 2010

2. The value of IT Governance
CIO Wisdom (2004) p124
• „soft-infrastructure‟ that facilitates decision making
– Allows daily operations to function with minimal supervision while
allowing the CIO to focus on strategy and vision
– Facilitates communication
• Governance = building consensus
– Requires leadership, must be able to make tough decisions and
follow through
• Right governance determined by context
– Long term investment
– Implement in „politically doable‟ stages c.f. „Tipping point‟
CRICOS #00212K
© Raymond Young 2010

3. Definitions of IT Governance
Smith (2006) pp54-55
• the process of making decisions about IT – Forester Research
• The decision rights and accountability framework for encouraging
desirable behaviour in the use of IT – Weill and Ross
• The responsibility of the board of directors and executive
management. It is an integral part of enterprise governance and
consists of leadership and organisational structures and processes
that ensure that the organisation‟s IT sustains and extends the
organisations strategies and objectives – ITGI
• The system by which the current and future use of ICT is directed
and controlled. It involves evaluating and directing the plans for the
use of ICT to support the organisation and monitoring this use to
achieve plans. It includes the strategy and policies for using ICT
within an organisation – AS8015, ISO38500
– C.F. The system by which entities are directed and controlled (AS8000)
CRICOS #00212K
© Raymond Young 2010

4. Governance
Inside the head of top management
Kwak and Anabari 2009
?
Mintzberg 1978
ROI
Projects Success: On-time On-budget 30%
Standish
100%
Some OK
90%
80%
70%
60% ? Project Governance
50% ? Portfolio Management
40% ? Programme Management 2/3 of projects
Lovallo and Kahneman 2003
No
30% deliver no
On-time Clegg et al. 1997 benefits
Young
20% and Jordan 2008 On-budget
10%
whatsoever
Fail
0%
1994 1996 1998 2000 2002 2004 2006 2009
Inside the head of project managers
Successful Challenged Failed CRICOS #00212K
© Raymond Young 2010

5. Evolution of Governance
CIO Wisdom (2004) p143
1. No coordination of IT effort
2. Various individuals at independent locations assume the role of
managing IT assets (in addition to other duties)
3. An individual is given “official” responsibility for IT assets and
activities. May be in multiple locations operating independently.
4. IT managers are allowed to hire resources
5. Autonomous islands of systems and information, and the need to
coordinate them are recognised. Often a harmonization project is
initiated.
6. The benefits of full coordination are recognised. A director level
position is established, responsible for cross company or global
activities.
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© Raymond Young 2010

6. IT Governance [structure]
Decision Rights in leading organisations – Weill & Ross
Business
IT IT IT
IT Principles application
Architecture Infrastructure Investments
needs
Business 3 3 3 3
Monarchy 2 Decison
IT Monarchy Decison
1 Decison
1
Decison
2 2
Feudal
Federal 1 3
Input Input Input Input
IT Duopoly 1 2 2
Input Decison
1
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© Raymond Young 2010

7. Governance mechanisms to overcome value leakage As many as 75% of IT
Where most organisations suffer value leakage organisations have little
oversight of their project
portfolios and employ
non-repeatable, chaotic
planning approaches
AMR Research
•Duplication of initiatives Strategy Management
Architecture Management
•Applications which don‟t fit the
business model
•Poorly conceived initiatives
(too late, too early,
52%
P3M3
Portfolio Management
OPM3
unnecessary)
MSP
Program Management PgMP
COBIT5
(incl ValIT) Asset
PRINCE2
Project Management
15% Mngt •Underutilised
•Rework (requirements
PMP 33% infrastructure
•Frequent
misunderstood) reinvention due to
poor architecture
•Over-engineering (lost sight of
alignment
ITIL
reason for change) Operations Management
•Resouce model not aligned to
business need Sources: IBM Strategy & Change, Survey of Fortune 1000 CIOs, Fujitsu Australia, John Thorp
CRICOS #00212K
© Raymond Young 2010

8. Mistaken uses of governance
CIO Wisdom (2004) p145
• Strategy vs. Execution
– Strategic process: Who decides what is done?
– Operational process: how is the strategy executed?
• Throttling
– Too much for the CIO ... Learn to use high-level governance
bodies to share prioritisation process
• Hypocrisy
– You must be prepared to practice what you preach
• Governance for governance‟s sake
– “never put anything in a design unless it has a specific reason to
be there”
CRICOS #00212K
© Raymond Young 2010

9. Major Assignment
• Implementation of an IT Capital Planning and
investment management process
– Best strategy to infuse technologies into organisations
• Stakeholder analysis
• Collaboration / influence strategy
• Change leadership
– Governance
• Metrics – to measure usefulness of technologies
• Strategy to balance portfolio of projects
• Governance structures
CRICOS #00212K
© Raymond Young 2010

10. HB280, AS8016, 6Q Governance™
Investment & Strategy: Strategy/capability:
Benefits / alignment? how much change is required?
67%->40% 40%
Business Case ?MSP?
Evaluate
Initiate
5-23% Direct &
Support
Responsibility: Governance Monitor 0-13%
Project Sponsor? Benefits Realisation
Investment:
Performance & Behaviour: benefits or terminate?
measures and motivation?
33-67% PMBOK, PRINCE2, etc
ChangeTracking™ ITIL, COBIT
ICT Projects Changed
Operations ICT Operations
Conformance & Behaviour:
Changed
Business processes culture for issues to Business Processes
be raised?
© Raymond Young 2010 ??% CRICOS #00212K

11. Key Concepts (I)
10-year goals
• ↑ economy, ↑ jobs (↑quality)
• ↓ crime 5% & „feel safer‟
Output • ↑ health
Initiatives – ↓ waiting times (emergency,
elective, …)
• ↑ education
– ↑ literacy/numeracy
– >90% yr 12
– ↑ VET participation
Asset • ↑ transport
Investments – ↓ commuting times
• ↑ environment
Programs
asset investments alone generally will not
– ↓ water usage 15%
lead directly to the realisation of strategic goals
CRICOS #00212K
© Raymond Young 2010

12. Key Concepts (II)
40%
Q2. Strategy/capability:
Efficiency how much change is required?
5-23%
Q3. Responsibility:
Avoid
duplication Programme Portfolio
Portfolio Project Sponsor?
33-67%
Management
management
Q4. Performance & Behaviour
Victorian measures and motivation?
investment
frameworks
Governance
On-time
Management
On-budget of Programmes
Project
Programme Q5. Conformance & Behaviour
management
culture for issues to be raised?
Effectiveness
Products/ Any Benefits aligned Realisation
Outputs benefits to strategy of strategic goals
0-13%
Q1. Strategy: 67%->40% Q6. Monitor:
Benefits / alignment?
© Raymond Young 2010 benefits or terminate? CRICOS #00212K

13. Questions & Discussion
CRICOS #00212K
© Raymond Young 2010

14. Business 2.0
Business and IT fusion
Risk and Reward
Dr Raymond Young (MBA, GAICD)
Raymond.young@canberra.edu.au
CRICOS #00212K
© Raymond Young 2010

15. Risk Identification
Smith (2006) p202
• Identify Risk Type Internal External
Political Personal agendas Regulations affect
Risks cause delays growth
• Prioritise Cultural Access to data is a
threat to fiefdoms
Customers dislike new
system
• Strategise Economic Accounting changes
affect financials
Recession impacts
donations
to minimise Environmental Office relocation
impacts data access
Unstable power
threatens BCP
– Avoid Technical
– Transfer Continuity Virus causes downtime ERP processing errors
cause delays
– Minimise Data integrity Dirty data delay system New system doesn‟t
migration match requirements
Change mngt Users don‟t accept new Training new users
ERP system impacts staff time
CRICOS #00212K
© Raymond Young 2010

16. Risk Prioritisation
Min Low Med High Extreme
Minimal
Low
Medium
High
Extreme
CRICOS #00212K
© Raymond Young 2010
UC 2010

17. Questions & Discussion
CRICOS #00212K
© Raymond Young 2010