Dr. Gad J. Selig, PMP, COP Managing Partner, GPS Group, Inc., Director, Technology Management & Dual Graduate Business Degree Programs & Associate
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1 Panel Discussion Sharing Industry Knowledge Successful Business/IT Alignment, Execution & Governance Best Practices: Why, What and How? Society for Information Management March 15, 2006 SIM March 15, 2007 Panel Dr. Gad J. Selig, PMP, COP Managing Partner, GPS Group, Inc., Director, Technology Management & Dual Graduate Business Degree Programs & Associate Professor, Management & Technology, University of Bridgeport Cell: (203)
2 Objectives Discuss the major issues, opportunities, strategies, processes and techniques to improve the effectiveness and level of maturity of IT services: - Business/IT alignment and value delivery - 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? 2
3 Panel Members: Dr. Gad J. Selig, PMP, COP Moderator: Director, MS in Technology Management and Dual Graduate Business/Engineering Degree Programs, University of Bridgeport and Managing Partner, GPS Group, 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. Werner Senior Vice President and CIO, Footstar, Inc. 3
4 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 and organizational structures and processes 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. 4
5 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) 4. Coping with accelerating change (and become one of the key drivers of innovation) 5. Dealing with senior management and the board (get a seat at the C table 6. Managing costs, budgets and resources (internal & external) 7. Keeping up with technology 8. Recruiting and retaining i staff 9. Executing projects effectively (time, cost & resource management) 10. Maintaining skills and knowledge (continuous learning) * Source Executive Summary 5
6 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, VOC, 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 6
7 Executive Summary Firms with superior IT governance had 20% higher h profits than firms with poor Governance given the same strategic objectives. Dr. Peter 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 7
8 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 Description/Components Deliverables/ References 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 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) Tactical, Project and Operating Plans (Project Plans and Budgets) Policies, Standards, Guidelines & Processes (e.g. Management Control, Enterprise Architecture, Security, PMO, ITIL, etc.) Processes ( PMO, Help Desk, Security, Administrative SOPs, Workflows, ITIL, etc.) Financial, program, project, application, maintenance and operational accountability Manage and measure plans, budgets programs, 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 People Development & Organizational, Project & Operational Maturity Models and Standards Continuous Process Improvement 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, Individual GPS and Group, Organization) Inc., All Rights Reserved. Plan Document Financials Balanced Scorecard Metrics BCG; Porter; Hamel IT Strategic/Tactical Plan/Metrics Portfolio Mgt. Model (Investment Criteria); ITIM Engagement Model - Roles Business Rules & Authorization McFarlan, Cash; Luftman; Popper; Selig Assess Implications of PMMM, PMBOK, CMMI, ITIL, SDLC, CoBit, Security (ISO 17799), Prince2 Frameworks on Company s 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 Adopt Current and Emerging Industry and Government Best Practices Standards & Guidelines PCMM; OMB 300; ISO; ITIM Career Development and Certification 8
9 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, managing change proaactively and meaningful 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 Process 9
10 IT Strategy & Governance A Future State Blueprint Concept (Illustrative Example) Strategic Planning (Business/IT Alignment Driven) Business and IT Leads are defined for each of an enterprise s core business Each core business process area submits its process area Functional/Corporate Business SBU Requirements strategic roadmap together with business Needs Intelligence The Business and IT Leads justification for review and approval, and for each core business (Finance) finalizes them based on decisions made by the process jointly develop and Business/IT Exec. Steering Council prioritize requirements, and agree on a strategic t alignment and investment plan Business/IT Exec. Steering Council council sets top-down IT Business/IT Exec. The IT Leads also serve as the Single Point of Contact to spending targets and allocation across business portfolios, reviews Steering Council their respective Business Unit Leads, address requests for all strategic roadmaps and investment plans, prioritizes IT new/changing requirements and address all service issues opportunities across all areas, defines key programs, approves final roadmaps and conducts periodic program/operating reviews Application Development (Metric Driven)/Programs/Projects The Business and IT Leads complete more detailed business cases for programs in IT establishes a Program Manager and budget for each key program approved by the Exec. Steering Council Each Program Manager initiates projects as specified on the approved roadmap by forming cross-functional Project Teams Project Teams receive formal authorization from PMO before initiating and closing projects, and releasing to production User Groups Customers Suppliers Employees SLA s KPIs Project 1 New Initiative Project Team Project Team Project 2 Enhancement or Maintenance Project Team Project Team the roadmap 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 Program Management Office (PMO) Infrastructure Programs Project Team Project Team 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 Service Support (Metric Driven) User Support Internal or outsourced Change/Risk Management Internal resources plan and manages changes/risks using ITIL-compliant processes OLA s KPIs Service Delivery (Metric Driven) Planning & Implementation Internal resources plan and deliver services using ITIL- compliant processes Compliance All processes are documented and monitored for compliance Infrastructure/ Operations Internal or outsourced resources manage each technology domain 10
11 Select Business Questions for the Expert Panel How do you align the IT strategy with the business strategy? What 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 effectively? Program/Project Management? IT Service 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? 11
12 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.? 12
13 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)
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