Cloud, mobility, BI … these are all much sexier topics in the IT world (relatively speaking) than compliance. But, year after year, governance and the business value of IT continually rank as some of the top concerns of CIOs, according to Heather Colella, a vice-president with Gartner Research.
Governance, at its simplest level, is the framework by which investment decisions are made and successfully delivered to the enterprise, Colella said in a recent Gartner webinar on IT governance. And, ideally, they deliver the expected business benefits stated up front in the business case.
But, like life itself, we often make things far more complicated than they need to be. “When organizations define governance it can become a long definition, it can become a little bit cloudy,” said Colella. “But if it’s clear that it’s about investment decisions and delivering on those, we’re in great shape.”
More boards are focused on risk management these days — mistakes and failures make headlines (and tweets) almost immediately. But that’s just table stakes. The real power in governance is when competitive advantage is introduced into the equation. “This is where the magic happens,” said Colella.
Assessing business opportunities, knowing how to map emerging technology against those opportunities and introducing innovation as required to make calculated risks — all of this might sound basic, but very few organizations do it well.
For those that do it well, however, they can expect a 20 per cent higher return on assets than other companies, said Colella. So, if you’re looking for a compelling reason to get your governance house in order, IT cost optimization might just be compelling enough to get the attention of stakeholders.
Keep in mind, though, that governance is both a framework and a process. We spend time, effort and money putting together a framework and then … nothing. A thick slab of paper is filed away, never to see the light of day again.
In North America, less than 20 per cent of companies actually track the benefits a project was supposed to deliver, said Colella, but almost 100 per cent of companies create a business case and use it to decide which investments to pursue.
Clearly, there’s a disconnect. “You might as well just shred the business case because the odds you’re going to look at it again are very low,” she said.
Companies tend to consider any sort of structure put in place as permanent, but the reality is there are two types of governance structures: permanent ones and temporary or project-focused ones.
“In most organizations the portfolio of IT initiatives becomes a lockdown situation,” said Colella. “The reality is things change.” As part of the governance process, identify changes to the business model or new ideas coming into the funnel. Decide which are most relevant, which have a great return on investment, and which to incorporate into your governance structure.
This is an ongoing process — the executive team should meet quarterly to see what’s shifted in the marketplace or have a formal funnel for innovation, said Colella.
Try to remember that “governance” is a verb. It’s an action or a process, not a static document. And, as with most things in life, less is more. Want your governance structure to be successful? Work toward designing the least amount of governance required.