IS Governance

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 Definition of Governance

 Governance provides a decision-making and accountability

framework for effective management of IS.

 The basic purpose of governance is to identify what decisions will

be made, and by whom, and to define how activities will be
monitored against the plan.

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 Decisions may include areas such as:
o The overall budget and allocation of resources
o Infrastructure
o Business applications
o Standards
o Policies and Priorities
o IS guiding principles
o The IS strategic plan.
 Most often, the decisions are about time (schedule), money (budget),
staffing levels, and allocations.

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 A variety of individuals or groups may be involved in these
decisions and processes, such as:
 Steering committee
 Executive management
 Board of directors
 CIO
 IS management
 Business line management, or Business liaisons

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 Without proper governance, decision making may be slow and
inconsistent because no one is sure who is responsible for the
decision.
 Proper governance improve the IS of an organization.
 If done properly, effective governance improves the efficiency
of IS and simplifies life for the CIO as the function operates
more smoothly on a day-to-day basis.

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 Clear IS governance is especially important because it is easy for
any employee to go to his or her local technology store and purchase
software or hardware to install.
 This software or hardware brought in through the “back door” can
become critical to the functioning of the company.
 So, without company agreement it is difficult for the assets to be
managed properly.
 i.e., data backed up, software that works properly in the
environment, software that can be supported, protection against
viruses).

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 Governance is also critical because IS are expensive and limited by
budgets.
 Any company has a limited bandwidth of resources and must
manage how those resources are spent.

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 Governance improve the relationship between the business and the
IS organization because there is structure and definition to the
relationship.

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Examples of Governance approaches that often occur without an
intentional design:
a) IS Dictator
b) People have the Power
c) Democratic
d) Business Management Monarchy
e) Business Unit Power
f) Corporate Power

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 IS Dictator:
o In this environment, the IS department makes all the decisions
and keeps tight control over IS tools and assets.
o The CIO and the IS organization are often criticized and
disrespected.
o The business is often dissatisfied because it is not driving IS
decisions.

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  People have the Power:
o In this environment, the individuals throughout the business may
initially be satisfied because they can do what they want, but
dissatisfaction grows as pieces of the infrastructure do not work
well together.
o This environment can be extremely wasteful and expensive, but
the cost may not be visible — it may be hidden within individual
department budgets.

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 Democratic:
o In this environment, everything is a vote. It can be a time
consuming and frustrating process.
o Often, the popular decision overrides the best decision.
o It can be political as opposing individuals vie for support.

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 Business Management Monarchy:
o In this environment, senior business executives make all the IS
decisions affecting the entire corporation.
o This could be good or bad depending on the skill and knowledge
of management.

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 Business Unit Power:
o It is common in a large company with unique divisions to have more
power in the business units than centrally.
o Although this method works well to achieve business unit objectives,
it is difficult to leverage corporate wide strategic efforts across
business units.
o This may also be more expensive because the business units may not
use standards and common systems across business units.

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 Corporate Power:
o In a highly centralized environment, a central corporate entity often
makes the decisions.
o Although this may have some efficiency, it often results in unsatisfied
business units that do not feel in control of their destiny.

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Organization involves business and management in developing the IS
strategic plan, not just their technician.
 Some IS organizations are very efficient in developing a strategic plan by taking
their top computer technicians and outlining the technical architecture of the
future.
 When these technicians complete their planning, they end up with a terrific
technical plan, but one that business management hardly understands, let alone
approves.
 Their architects fail to involve the business and management throughout the
process.
 It is through proper involvement of the business that a plan becomes executable
and meaningful.

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 Communication in the development of the IS strategic plan

 Communication and involvement are key aspects of the planning

process.
 The planning process consists of 80% communicating and obtaining
input, and 20% planning.

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 Organization start developing an IS strategic plan

 An organization should start the strategic planning process by

involving all levels of the business organization in the planning and
governance process.

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 It is possible to get this involvement and commitment, even if it is
difficult to get management’s attention.
 Organization can ensure ongoing management to the plan and
governance:
o There may be a need to form several planning groups to involve
the various levels of the organization.
o The involvement of several groups and individuals in the initial
plan development and ongoing governance is common in a
typical organization.

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 These groups include:
a) Executive management
b) IS steering committee
c) CIO
d) IS organization
e) Implementation team

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Responsibilities of executive management relative to the IS planning
and governance process:
 To provide strategic business direction and priorities.
 To provide input to and approve the IS strategic direction and plans.
 The group will ensure the IS plans are in agreement with the
strategic business plans of the organization.
 To approve all large project efforts and provide the final authority in
the allocation of resources.
 To approve the IS budget.
 To provide direction relative to high-level business issues that affect IS.

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The IS steering committee consists of:
 Directors, or individuals one level below the executive management.
 The top individual from IS (typically the CIO, Vice President, or
Director) schedules, organizes, documents, and chairs the meetings.
 Additional members from IS can attend meetings as required to
provide information or give presentations.

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 The IS committee’s agenda:
 IS Steering Committee Purpose
 IS Strategic Planning Process
 Current Business Situation
 Current IS Situation
 IS Industry
 Assessment of Current Situation
 Recommendations
 Next Steps

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 The responsibilities of the IS steering committee:
 To provide recommendations and input to the IS strategic direction and plans.
 To ensure the plans are in alignment with the business plans and direction.
 To communicate business issues and plans influencing IS activities or
direction in technology.
 To provide input and assist in developing the vision for the deployment of
technology to meet the business requirements of the future.
 To provide communication to other members within the organization
regarding IS activities.
 To sponsor and initiate business process reengineering projects.
 To commit to delivering the business benefits identified in projects.
 To communicate and discuss functional business issues arising from IS
activities- (for example, if the manufacturing department wants to structure
the bill-of-material or product number one way and the engineering
department wants it another way, and the groups cannot come to agreement).
 To review IS standards and procedures that have an impact on other business
functions.
 To approve the allocation of the IS budget.
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 The implementation team must include representatives from
areas of the business impacted by the change, as well as one or
two individuals from IS.

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 The responsibility of the implementation team:
 Doing the business process reengineering.
 Establishing the parameters.
 Establishing procedures on how the company will use the
system, testing the system, and training the users.

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 Characteristics of the implementation team members:
 Have a thorough knowledge of the business area they represent.
 Be respected and influential among their peers.
 Be detail-oriented.
 Be a good listener.
 Be a good communicator.
 Have good writing and documentation skills.
 Be creative, and able to look beyond how things are done today.
 Have an interest in transforming the company.

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 Characteristics in the implementation team leader:
 Is a true leader.
 Has the respect of the organization.
 Is good at organization and planning, and project management.
 Is decisive.
 Is a good people manager.
 Can say “no” and lead business process change.
 Is creative, and able to look beyond how things are done today.
 Has an interest in transforming the company.
 Typically delivers on time and on budget.
 Can manage risks.
 Can manage the budget.
 Can manage and direct outside consulting resources.
 Is an excellent communicator.
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