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A Center for CIO Leadership Summary
CIO Context
This IBM paper explains how you can use governance best practices to mitigate the depth and duration of performance declines that often accompany periods of change and innovation. It clarifies what governance is—and isn’t—and articulates how CIOs can begin to improve governance within their organizations. Indeed, the paper claims, IT governance is an idea whose time has come. By clarifying decision rights and accountability chains for specific strategic components, governance best practices can target the decision making and behavior required to achieve specific objectives.
Thriving in a Permanent State of Change
Most CEOs—especially those in outperforming organizations—embrace innovation as a way to differentiate their enterprises. This was underscored by the results of the IBM Global CEO Study, which showed that outperforming organizations not only anticipate more change than other organizations but also report that they are better at managing it. Drivers for better governance include the business’s increasing dependency on IT; multisourcing; and a growing percentage of the IT budget being devoted to operations, leaving a smaller percentage available for innovation and development.
How well does your executive team embrace innovation?
Defining IT Governance
Governance includes establishing the governance model and the governance processes, structures, and relational mechanisms to ensure clarity and transparency in directing and controlling IT. Ultimately, governance must ensure clear and transparent decision rights and accountability chains for directing and controlling each critical management activity required by a strategy. Governance can address the greatest risk that service organizations face today: behavior and decision making that are not aligned with strategic objectives.
Does your executive team understand the importance of IT governance in addressing risk? If not, what can you do to drive awareness?
Getting Started
This paper cautions: don’t try to “boil the ocean” by defining governance for everything in IT at one time. Instead, you ask questions such as, “What are the hot components that can be differentiating for my business now?” Here are the four key steps for getting started:
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Understand the business strategy. What is the business trying to accomplish?
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Identify the business components that are directly related to the strategy and the IT components that are critical or can contribute to differentiation.
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Identify which components are hot and need to change now.
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Improve governance of the hot components first.
Once you have established a minimum set of good governance practices for each hot component, you need to plan for continuous improvement.
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What do you need to do to systematically move through these four steps? What processes do you need to put in place to support continuous improvement?
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