>IT Governance –Value Creation and Accountability

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IT governance is something people tend to have a love/hate relationship with. They love it because they know they need it and will benefit from it; but they hate it because they don’t want to do it and be bound by it.

It sort of reminds me of the old TV show, The Little Rascals, when the mother “makes” her kid take the spoonful of awful tasting castor oil because it was good for him. And what a face the kid would make as that spoon glided into his mouth, and then a big smile would emerge.

DM Review, 8 February 2008, reports that enterprises are “Getting Serious about IT Governance.”

Here’s why IT governance is growing in importance:

  1. Growing IT expenditures—“Worldwide IT spending has grown 5 percent to 8 percent in recent years and will approach $3 trillion for 2007”
  2. IT project troubles—“IT project failures, security breaches, and compliance snafus are still abundant. Gartner estimated that more than $600 billion has been squandered on ill-conceived or poorly executed projects. And according to Standish Group, only 30 percent of projects are considered successful.”
  3. Money won’t solve the problem—“Simply pouring more money into IT won’t necessarily fix a company’s problems or mitigate its risks.”

IT governance is a two-fold endeavor:

  1. Value creation—“IT governance is about balancing the interests of investors and stakeholders by focusing resources on the creation of value…if the mission of IT is to provide systems the business wants, it is equally important to provide systems the business actually needs.”
  2. Accountability—“IT governance is the system by which IT is directed and controlled. It should address the roles and responsibilities of groups and individuals…articulate the rules and procedures for making IT decisions, and provide a structure through which IT objectives are set, attained, and monitored.”

In the Federal IT Investment Management (ITIM) process for Capital Planning and Investment Control, value creation and accountability align well with the phases of Select-Control-Evaluate for IT investments.

  • The Select phase supports value creation. It involves the selection of projects based on a combination of the following factors: alignment with mission/business strategy, highest return on investment, lowest risk, and alignment to and compliance with the enterprise architecture.
  • The Control phase supports accountability. It involves monitoring and managing IT projects for cost, schedule, and performance parameters. Projects that deviate from their targets risk being reorganized, downsized, or entirely phased out.
  • The Evaluate phase supports both value creation and accountability. It is the evaluation of whether IT projects meet their intended performance goals. This provides lessons learned for future IT project selections and for controlling their steady progress, as well as holding accountable the project sponsor and team for their IT project.

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