What is the impact of IT Governance in your Organization?

Today we are in an era of rapid technological changes, complex operating environments and demanding consumerisation of IT.  Enterprises are forced to change gears to make the paradigm shift imminently not only to be competitive but to secure their place in business. In order IT to stay relevant and influential in this age of business,  that understanding the true meaning of IT governance is the key to our success. 

While organisations are spending time, effort and resources to scale up to new frontiers, there is no blue print to guarantee success in their endeavors.  Over and above, changing regulatory and legal compliance requirements make it a difficult proposition to sail through seamlessly.

Hence it is the need of the hour for enterprises to fall back to a robust Governance structure and control to handhold and guide them during this unpredictable journey.

Why is this important?

The recent PINK 14 conference that concluded in Vegas resonated with one clear message about Governance of IT being single greatest reason that businesses were unable to get real benefits of IT. In other words IT fails to give true business value.  Hence there is an increasing need for IT Governance to play a pivotal role in making this a reality.  While IT is getting overwhelmed with Cloud, Mobility, BYOD, Big Data and new market trends, managing complexity needs a phenomenal governance mechanism. It is important to get both IT and the business to understand how Governance can help provide true value to their customers and create customer delight.  Cobit 5.0 – Governance framework has become popular merely by the fact that it has appealed well to the business audience.

So what is Governance?

In today`s context, I see that Governance is used interchangeably with the word Management and would like to clarify a few distinctions between the two to set the context right.

IT governance is primarily concerned about two things: IT’s delivery of value to the business and mitigation of IT risks. On the other hand, Management plans, builds, runs and monitors activities in alignment with the direction set by the governance to achieve the enterprise objectives.  Governance involves executive committee and board that is independent of organization whereas the Management involves senior management staff within the same organization.

In simple words, Governance is doing the right things while Management is about doing things right.

People tend to relate Governance as an element of bureaucracy/executive control, which adds additional layers of approval and processes to ‘tightening screws’.

As a practitioner on IT Governance, I have seen several such myths perceived by the organisation that I had written in my earlier blog titled “IT Governance – 5 Myths to Break this New Year”

Let’s take a  simple example to articulate the importance of  Governance .  All of us know about the Lehmann Brothers bankruptcy.  Valukas report that was produced by an independent investigator of bankruptcy revealed some startling facts.  A) Repo 105 ( Remove B$  security inventory from balance sheet) was completely illegal under the US Law and therefore Lehman Brother had to do all of these transactions in the UK under their London unit .  b) Out of 10 Board of Directors, only 2 had  direct experience in financial industry c)  The risk management committee  only met  twice in 2006 and 2007.

These areas get clearly addressed, if governance structure was formally established to deal with due-diligence proactively.  So what has been your experience with setting up of Governance in your organization?

This Post was published at Service Desk Institue

Take control of your ABCs to make your governance initiatives successful!

What is your company culture? How does your organization view change? Is change accepted or do employees drag their heels and fight it like a child throwing a temper tantrum? COBIT5.0 talks about seven enablers; one of these is “Culture, Ethics and Behavior”. Today I want to discuss Attitude, Behavior and Culture (ABCs) and discuss their impact on your organization.

Why is culture important?

The adoptability of change is determined by the culture of the organization. This adaptability can include:

• Enterprise risk appetite
• Organizational appetite to change enablement
• History and legacy of the organization
• Deep rooted values and principles governing the business
• And many other factors

With many organizations having global presence, one size does NOT fit all and initiatives have to be tailor-made to suit to the culture. This is the only way to gain acceptance and facilitate institutionalization.

Culture has a bearing on the communication methodologies to be adopted (Vocal/Non Vocal), preferred leadership styles and above all, understanding what appeals to the task force to get things done. When I conduct Management of Organizational Change (MoC) programs, I spend considerable time and effort understanding the culture of the organization. When I design a facilitate approach for enabling change, I look at their previous success with enabling change, their organizational structure and leadership styles.

How do Ethics and Values contribute?

Ethical behavior cascades from the CIO or executive board of the organization down to the people. Employees closely follow how the senior management addresses unethical behavior as they conduct business with customers/partners and fellow employees. When upper management takes serious actions against undesirable behavior and immediately communicates it to the task force, it sends a strong message. Employees hear, “Be vigilant and on-guard; or else be ready to meet dire consequences.”

Many organizations have mandatory trainings and refresher courses on “Ethics and Compliance” every year to reinforce the standard of business conduct and encourage people to conduct business in fair and ethical manner. The CEO and the leadership team must walk the walk and implement the values of the organization in all dealings. This helps to institutionalize it as part of the organizational culture

The spirit of upholding the organizational values must be acknowledged and rewarded among employees to set the precedence and follow in day-to day practice. In addition, there has to be an Ethical and Compliance Team that provides assistance for employees and people to solicit advice anonymously and take decisions appropriately. These aspects will strengthen the code of discipline and institutionalize a value system throughout the organization culture.

How do you inculcate desirable behavior?

Behavior of the people is driven by four essential parameters:

• a) Policy
• b) Process
• c) Values
• d) Objectives

These have to be linked together and feedback has to be solicited to promote desirable behavior. If there is a report of non-adherence, it is important to identify the true reason and rational behind not following. Then work on a consensus to make amendments for people to adopt and follow without inhibitions.

A good starting point would be to have a mandatory training on “Professionalism and Etiquette of Corporate life” for all employees/partners joining the organization to illustrate desired behavior. A handy handbook at the local Intranet site would serve as ready reckoner. In order to demonstrate consistent behaviors, it has to become a habit to get the desired behavior. This means providing a platform to reward employees with the right attitude. Remember, you can train people and get them the required skills and competencies, but attitude has to come from within. With this understanding, an organization’s hiring process should lay emphasis on attitude more than aptitude to recruit the right resources with positive attitude and reliance on team work.

You need to take control of your ABCs (Attitude, Behavior and Culture) to make your Governance Initiatives successful

What has been your take on Culture, Ethics and Behavior in the context of IT Governance? I want to hear about your experiences, share them in the comments section below

This article was published at HP Software Blog on 25th January
 http://h30499.www3.hp.com/t5/HP-Software-Solutions-Blog/Take-control-of-your-ABCs-to-make-your-governance-initiatives/ba-p/5944231
 

IT Governance - 5 Ingredients to kickstart your Value Delivery

Stephen Mann's "Top 10 ITSM Challenges for 2013" considered “IT cost transparency” and “value demonstration” as two top ITSM challenges. This blog talks about ways to help you address these challenges.
IT investments are growing, and the growth is increasingly being scrutinized by business. Business perceives IT cost to be exponentially increasing without clear evidence of the value derived from it. In simple terms, IT is considered as a “black hole.”
Value demonstration as a term means something different for various stakeholders. It could include cost reduction, increased customer satisfaction, more value for money, and much more.
Let’s talk about five critical factors that enable you to kick-start value demonstration.

1. How to Define Value
As the popular quote goes, “value is in the eye of beholder,” so understanding it from your customer and user perspectives is vital for your business. Organizations need to define value based on true business outcome. What does that mean? Example: It does not make sense to commit for 99.95 percent availability for services if your customer is, say, the NYSE. A single minute of downtime could cost millions of dollars. So understanding the business of the customer and their priorities is vital to determining value. An interesting post on this line was done recently by Stuart Rance: "SLA Definition: What the Customer Wants or What You Can Measure?"

2. Prioritization and Categorization of Investments
While we have no choice for nondiscretionary investments determined by legal and regulatory compliance, it is fundamental to get the discretionary investments planned and executed with proper categorization and prioritization. Categorization can include:

1. Transactional investment (increase efficiency and cost)
2. Informational investment
3. Strategic investment (real value to business, competitive advantage)
4. Infrastructure investments (IT Infrastructure)

Prioritization has to be driven by business to select the appropriate time for execution. For example, organizations can decide to take up projects that yield more return on investment (ROI) and are easy to implement as their first priority.

3. Methodology and Best Practices
Start with strategy. It is important to define business outcomes based on the strategic direction of the organization. This could be done using blended investment program instead of standalone projects in order to fully harness the business, technology, organization, process, and people (BTOPP) required in achieving the planned business outcome.
The next step would be to take on projects and initiatives based on a compelling business cases. The business case must assimilate information from all aspects to be compelling. Business cases should be living documents that need to be updated or revisited to ensure perceived business benefits are obtained during the life cycle of project.
Next, consider setting up an investment management committee to validate relevance of projects, and a business sponsor to oversee the benefits of planned programs, to help you to take control of your IT expenses without going down the drain. Initiatives should be planned as a blended investment program instead of standalone projects in order to fully harness the business, technology, organization, process, and people (BTOPP) required in achieving the planned business outcome.
Every planned program should follow the full lifecycle governance (strategic alignment, value delivery, risk management, resource management, and performance measurement), and benefit realization processes. The results chain technique enables you to achieve benefit realization.

4. Performance Measurement
Value delivery is closely associated with performance measurement to determine if the intended plan is grounded in reality. This should include financial measures like payback period, net present value (NPV), internal rate of return (IRR), return on investment (ROI), and also nonfinancial measures like the BSC. While organizations are mature in determining financial measures, the BSC is only adopted by 50 percent of organizations—but trends suggest improvement in 2013. With the balanced scorecard approach, the board obtains a holistic view of IT performance towards alignment with strategic business objectives. This also helps IT gain the trust of the business and improve the IT-business relationship.

5. Role of Board and PMO
Typically governance is implemented with an executive board setting the strategic direction and a steering committee overseeing the actual implementation. This is done with support from technical, architecture and investment management committees.
Successful programs that yield true business value have a strong project management office (PMO) in place to review, evaluate, and guide programs to achieve the intended business value. This includes measurement of resource performance, risk management, cost transparency, and alignment towards strategic business objectives. The PMO submits the performance of programs against agreed parameters at regular intervals to ensure that there are no surprises for business.
Based on my experience, I have found that these five factors help obtain value delivery and cost transparency in all planned initiatives. So what has been your experience?

IT Governance - 5 Myths to break this New Year

IT Governance or Governance of Enterprise IT has now become the buzz word during every corporate discussion. This is not surprising considering the fact of economic recession and global meltdown.
People tend to relate governance as an element of bureaucracy/executive control that adds additional layers of approval and processes to tighten screws. It is imperative as employees / staff in the organization to understand and break some common myths to fully support governance initiatives and this article is aimed at providing those insights before your start on the IT Governance Journey.

Myth 1: Governance is Top Leadership`s business and bureaucratic


While it is true that IT governance is the responsibility of the board of directors and executive management, it consists of the leadership, organizational structures and processes that Organizations IT sustains and extends the organization`s strategies and objectives. The Whole objective of governance is to ensure that the entire organization is in alignment with the corporate strategy & objectives and everyone has a role to play to ensure successful business outcomes. Bureaucracy does not pay off in the long run and the executive Council & board are candid of the fact to set the right strategic direction & leave it to the steering committee to manage the implementation of effective governance.

Myth 2: Governance needs a formal framework like Cobit to get envisioned results
Though Cobit provides clear guidelines and best practices for effective Governance, it all starts with the overall Intent and approach of the organization embarking on Governance
Best practice frameworks aid your governance, but do not serve as substitute for the ownership/drive and commitment of the Senior Executive Management to provide seamless delivery, utilizing optimum resources and managing risks to achieve planned business outcome. So you need to have the basic 4 elements that includes Leadership, Organizational structure, Processes and Management of Organizational Change (MoC) before deep diving into best Practices.


Myth 3: Culture of the Org can be taken for Granted once Leadership Buy-In is obtained
This is one fundamental reason that governance initiatives fail miserably. Though Leadership buy-in is vital, culture of the organization has far more impact in the overall scheme of things. What worked for one organization might not suit the other (one size does not fit all) because of various factors like culture, risk appetite, business strategy & leadership style. Substantial effort needs to be planned through a MoC program to ensure that all stakeholders understand the impact and are committed to contribute to the overall organization`s strategy and objectives.

Myth 4: It’s all about Metrics/ Dashboards and Surveys that the Executive Council is interested
Organizations have become very good in meeting slas, operational metrics and great CSAT ratings. Gone are the days that meeting your agreed contractual obligations and prerogatives alone are sufficient to sustain momentum. Executive board and senior management are interested on five major areas. (1. Strategic Alignment 2. Value delivery 3. Risk Management 4. Resource Management 5. Performance measurement).So beyond the traditional metrics and dashboards there is a shift of focus to Balanced Score Card (BSC) & higher internal metrics for all governance areas to continually improve and deliver agreed business outcomes. The ultimatum is not the numbers, but achievement of planned business objectives.

Myth 5: Governance requires substantial investment & resources not aimed for Small or Medium Sized Business
Many organizations are not prepared to embark on Governance Initiatives claiming a simple reason “Oh that requires huge investment and more resources which we cannot to afford as a small organization”.
Governance Initiatives is aimed to make your investments and efforts yield right business value and have to be embedded on your day-to-day practice. This can be done with the existing resources, leadership and org structure. It only requires the thought process to look at broader strategic objectives and how results affect various stakeholders (Customers, Shareholders and Employees & Vendors). Start simple with an outline and then improve upon the maturity over a period of time. After all every big accomplishment starts with a single step!