Make Your IT Governance Adaptable

Governance isn't optional, so keep it simple and make it flexible.

Table of Contents

Make Your IT Governance Adaptable

Governance isn't optional, so keep it simple and make it flexible.

EXECUTIVE BRIEF

Analyst Perspective

Governance will always be part of the fabric of your organization. Make it adaptable so it doesn’t constrain your success.

Far too often, the purpose of information and technology (I&T) governance is misunderstood. Instead of being seen as a way to align the organization’s vision to its investment in information and technology, it has become so synonymous with compliance and control that even mentioning the word “governance” elicits a negative reaction.

Success in modern digital organizations depends on their ability to adjust for velocity and uncertainty, requiring a dynamic and responsive approach to governance – one that is embedded and automated in your organization to enable new ways of working, innovation, and change.

Evolutionary theory describes adaptability as the way an organism adjusts to fit a new environment, or changes to its existing environment, to survive. Applied to organizations, adaptable governance is critical to the ability to survive and succeed.

If your governance doesn’t adjust to enable your changing business environment and customer needs, it will quickly become misaligned with your goals and drive you to failure.

It is critical that people build an approach to governance that is effective and relevant today while building in adaptability to keep it relevant tomorrow.

Valence Howden
Principal Research Director, Info-Tech Research Group

Executive Summary

Your Challenge

• People don’t understand the value of governance, seeing it as a hindrance to productivity and efficiency.
• Governance is delegated to people and practices that don’t have the ability or authority to make decisions.
• Decisions are made within committees that don’t meet frequently enough to support business velocity.
• It is difficult to allocate time and resources to build or execute governance effectively

Common Obstacles

• You are unable to clearly communicate how governance adds value to your organization.
• Your IT governance approach no longer aligns with or supports your organizational direction, goals, and work practices.
• Governance is seen and performed as a bureaucratic control-based exercise.
• Governance activities are not transparent.
• The governance committee gets too deeply involved with project deep dives and daily management, derailing its effectiveness and ability to produce value.

Info-Tech’s Approach

• Use Info-Tech’s IT governance models to identify a base model similar to the way you are organized. Confirm your current and future placement in governance execution.
• Adjust the model based on industry needs, your principles, regulatory requirements, and your future direction.
• Identify where to embed or automate decision making and compliance and what is required to do so effectively.
• Implement your governance model for success.

Info-Tech Insight

IT governance must be embedded and automated, where possible, to effectively meet the needs and velocity of digital organizations and modern practices and to drive success and value.

What is governance?

IT governance is a critical and embedded practice that ensures that information and technology investments, risks, and resources are aligned in the best interests of the organization and produce business value.

Effective governance ensures that the right technology investments are made at the right time to support and enable your organization’s mission, vision, and goals.

Why is this necessary?

• Governance is not simply a committee or an activity that you perform at a specific point in time; it is a critical and continuously active practice that drives the success of your organization. It is part of your organization’s DNA and is just as unique, with some attributes common to all (IT governance elements), some specific to your family (industry refinements), and some specific to you (individual organization).
• Your approach to governance needs to change over time in order to remain relevant and continue to enable value and success, but organizations rarely want to change governance once it’s in place.
• To meet the speed and flow of practices like Lean, DevOps, and Agile, your IT governance needs to be done differently and become embedded into the way your organization works. You must adjust your governance model based on key moments of change – organizational triggers – to maintain the effectiveness of your model.

Info-Tech Insight

Build an optimal model quickly and implement the core elements using an iterative approach to ensure the changes provide the most value.

The Technology Value Trinity

Delivery of Business Value & Strategic Needs

• DIGITAL & TECHNOLOGY STRATEGY
  The identification of objectives and initiatives necessary to achieve business goals.
• IT OPERATING MODEL
  The model for how IT is organized to deliver on business needs and strategies.
• INFORMATION & TECHNOLOGY GOVERNANCE
  The governance to ensure the organization and its customers get maximum value from the use of information and technology.

All three elements of the Technology Value Trinity work in harmony to deliver business value and meet strategic needs. As one changes, the others need to change as well.

• Digital and IT Strategy tells you what you need to achieve to be successful.
• IT Operating Model and Organizational Design is the alignment of resources to deliver on your strategy and priorities.
• Information & Technology Governance is the confirmation that IT’s goals and strategy align with the business’ strategy. It is the mechanism by which you continuously prioritize work to ensure that what you deliver is in line with the strategy. This oversight involves evaluating, directing, and monitoring the delivery of outcomes to ensure that the use of resources results in achieving the organization’s goals.

Too often strategy, operating model and organizational design, and governance are considered separate practices. As a result, “strategic documents” end up being wish lists, and projects continue to be prioritized based on who shouts the loudest rather than on what is in the best interest of the organization.

Where information & technology governance fits within an organization

I&T governance hasn’t achieved its purpose

Governance is the means by which IT ensures that information and technology delivery and spend is aligned to business goals and delivers business outcomes. However, most CEOs continue to perceive IT as being poorly aligned to the business’ strategic goals, which indicates that governance is not implemented or executed properly.

For I&T governance to be effective you need a clear understanding of the things that drive your organization and its success. This understanding becomes your guiding star, which is critical for effective governance. It also requires participation by all parts of the organization, not just IT.

Info-Tech CIO/CEO Alignment Diagnostics (N=124)

43% of CEOs believe that business goals are going unsupported by IT.

60% of CEOs believe that improvement is required around IT’s understanding of business goals.

80% of CIOs/CEOs are misaligned on the target role for IT.

30% of business stakeholders are supporters (N=32,536) of their IT departments

Common causes of poor governance

Key causes of poor or misaligned governance

1. Governance and its value to your organization is not well understood, often being confused or integrated with more granular management activities.
2. Business executives fail to understand that IT governance is a function of the business and not the IT department.
3. Poor past experiences have made “governance” a bad word in the organization. People see it as a constraint and barrier that must be circumvented to get work done.
4. There is misalignment between accountability and authority throughout the organization, and the wrong people are involved in governance practices.
5. There is an unwillingness to change a governance approach that has served the organization well in the past, leading to challenges when the organization starts to change practices and speed of delivery.
6. There is a lack of data and data-related capabilities required to support good decision making and the automation of governance decisions.
7. The goals and strategy of the organization are not known or understood, leaving nothing for IT governance to orient around.

Key symptoms of ineffective governance committees

1. No actions or decisions are generated. The committee produces no value and makes no decisions after it meets. The lack of value output makes the usefulness of the committee questionable.
2. Resources are overallocated. There is a lack of clear understanding of capacity and value in work to be done, leading to consistent underestimation of required resources and poor resource allocation.
3. Decisions are changed outside of committee. Decisions made or initiatives approved by the committee are later changed when the proper decision makers are involved or the right information becomes available.
4. Governance decisions conflict with organizational direction. This shows an obvious lack of alignment and behavioral disconnect that work against organizational success. It is often due to not accounting for where power really exists within the structure.
5. Consistently poor outcomes are produced from governance direction. Committee members’ lack of business acumen, relevant data, or understanding of organizational goals results in decisions that fail to drive successful measured outcomes.

Mature your governance by transitioning from ad hoc to automated

Organizations should look to progress in their governance stages. Ad hoc and controlled governance practices tend to be more rigid, making these a poor fit for organizations requiring higher velocity delivery or using more agile and adaptive practices.

The goal as you progress through these stages is to delegate governance and empower teams based on your fit and culture, enabling teams where needed to make optimal decisions in real time, ensuring that they are aligned with the best interests of the organization.

Automate governance for optimal velocity while mitigating risks and driving value.

This puts your organization in the best position to be adaptive, able to react effectively to volatility and uncertainty.

Stages of governance

Make Governance Adaptable and Automated to Drive Success and Value

Governance adaptiveness ensures the success of digital organizations and modern practice implementation.

THE PROBLEM

• The wrong people are making decisions.
• Organizations don't understand what governance is or why it's done.
• Governance scope and design is a bad fit, damaging the organization.
• People think governance is optional.

THE SOLUTION

ESTABLISH YOUR GUIDING PRINCIPLES

Define and establish the guiding principle that drive your organization toward success.

• Mission & Vision
• Business Goals & Success Criteria
• Operating Model & Work Practices
• Governance Scope
• Principles

SELECT AND REFINE YOUR MODEL

Use Info-Tech's IT Governance Models to identify a base model similar to the way you are organized. Confirm your current and future placement in governance execution.

IDENTIFY MODEL UPDATE TRIGGERS

Adjust the model based on industry needs, your principles, regulatory requirements, and future direction.

• Principles
  Select principles that allow the organization to be adaptive while still ensuring the governance continues to stay on course with pursuing its guiding star.
• Responsibilities
  Decide on the governance responsibilities related to Oversight Level, Strategic Alignment, Value Delivery, Risk Optimization, Resource Optimization, and Performance Management.
• Structure
  Determine at which structured level governance is appropriate: Enterprise, Strategic, Tactical, or Operational.
• Processes
  Establish processes that will enable governance to occur such as: Embed the processes required for successful governance.
• Membership
  Identify the Responsibility & Accountability of those who should be involved in governance processes, policies, guidelines, and responsibilities.
• Policies
  Confirm any governing policies that need to be adhered to and considered to manage risk.

DETERMINE AUTOMATION OPTIONS AND DECISION RULES

Identify where to embed or automate decision making and compliance and what is required to do so effectively.

STAGES OF GOVERNANCE

Traditional (People- and document-centric)

1. AD HOC GOVERNANCE
   Governance that is not well defined or understood within the organization. It occurs out of necessity but often not by the right people or bodies.
2. CONTROLLED GOVERNANCE
   Governance focused on compliance and hierarchy-based, authority-driven control of decisions. Levels of Authority are defined and often driven by regulatory requirements.

Adaptive (Data Centric)

3. AGILE GOVERNANCE
   Governance that is flexible to support different needs and quick responses in the organization. Driven by principles and delegated throughout the company.
4. AUTOMATED GOVERNANCE
   Governance that is entrenched and automated into the organizational processes and product/service design. Empowered and fully delegated governance to maintain fit and drive organizational success and survival.

KEY INSIGHT

Governance must actively adapt to changes in your organization, environment, and practices or it will drive you to failure.

Developing governance principles

Governance principles support the move from controlled to automated governance by providing guardrails that guide your decisions. They provide the ethical boundaries and cultural perspectives that contextualize your decisions and keep you in line with organizational values. Determining principles are global in nature.

Find your guiding star

Your mission and vision define your goals and objectives. These are reinforced by your guiding principles, including ethical considerations, your culture, and expected behaviors. They provide the boundaries and guardrails for enabling adaptive governance, ensuring you continue to move in the right direction for organizational success.

To paraphrase Lewis Carroll, “If you don't know where you want to get to, it doesn't much matter which way you go.” Once you know what matters, where value resides, and which considerations are necessary to make decisions, you have consistent directional alignment that allows you to delegate empowered governance throughout the organization, taking you to the places you want to go.

Understand governance versus management

Don’t blur the lines between governance and management; each has a unique role to play. Confusing them results in wasted time and confusion around ownership.

Governance I&T governance defines WHAT should be done and sets direction through prioritization and decision making, monitoring overall IT performance. Governance aligns with the mission and vision of the organization to guide IT.

Management Management focuses on HOW to do things to achieve the WHAT. It is responsible for executing on, operating, and monitoring activities as determined by I&T governance. Management makes decisions for implementation based on governance direction.

Data is critical to automating governance

Documents and subjective/non-transparent decisions do not create sufficient structure to allow for the true automation of governance. Data related to decisions and aggregated risk allow you to define decision logic and rules and algorithmically embed them into your organization.

People- and Document-Centric

Governance drives activities through specific actors (individuals/committees) and unstructured data in processes and documents that are manually executed, assessed, and revised. There are often constraints caused by gaps or lack of adequate and integrated information in support of good decisions.

Data-Centric

Governance actors provide principles, parameters, and decision logic that enable the creation of code, rulesets, and algorithms that leverage organizational data. Attestation is automatic – validated and managed within the process, product, or service.

Info-Tech’s Approach

Define your context and build your model

ESTABLISH YOUR GUIDING PRINCIPLES

Define and establish the guiding principle that drive your organization toward success.

• Mission & Vision
• Business Goals & Success Criteria
• Operating Model & Work Practices
• Governance Scope
• Principles

SELECT AND REFINE YOUR MODEL

Use Info-Tech's IT Governance Models to identify a base model similar to the way you are organized. Confirm your current and future placement in governance execution.

MODEL UPDATE TRIGGERS

Adjust the model based on industry needs, your principles, regulatory requirements, and future direction.

• Principles
  Select principles that allow the organization to be adaptive while still ensuring the governance continues to stay on course with pursuing its guiding star.
• Responsibilities
  Decide on the governance responsibilities related to Oversight Level, Strategic Alignment, Value Delivery, Risk Optimization, Resource Optimization, and Performance Management.
• Structure
  Determine at which structured level governance is appropriate: Enterprise, Strategic, Tactical, or Operational.
• Processes
  Establish processes that will enable governance to occur such as: Embed the processes required for successful governance.
• Membership
  Identify the Responsibility & Accountability of those who should be involved in governance processes, policies, guidelines, and responsibilities.
• Policies
  Confirm any governing policies that need to be adhered to and considered to manage risk.

AUTOMATION OPTIONS AND DECISION RULES

Identify where to embed or automate decision making and compliance and what is required to do so effectively.

The Info-Tech Difference

Define your context and build your model

1. Quickly identify the organizational needs driving governance and your guiding star.
2. Select and refine a base governance model based on our templates.
3. Define and document the key changes in your organization that will trigger a need to update or revise your governance.
4. Determine where you might be able to automate aspects of your governance.
5. Design your decision rules where appropriate to support automated and adaptive governance.