SIDEBAR: First Movers in IT Governance
The early bird gets more than the worm
By Vivek Mehra
First-mover organizations are those that are first to establish a significant presence in a given market or domain, and thus are able to use that as a basis for competitive advantage. First movers in IT governance are organizations that realize the importance of effective governance of IT assets (resources, software, hardware, services, products and the like) and exhibit traits that enable them to proactively address governance issues.
As IT becomes increasingly commoditized, all organizations have access to the same technologies and tools. What often sets some apart is how they apply these common technologies in support of business processes. Successful technology implementation, and the success of IT as an enabling organization, is determined by the innovation and effectiveness of IT governance in the enterprise. First-mover enterprises differentiate themselves by recognizing the importance and relevance of IT governance, and they seek to continuously evolve governance structures and process in lock-step with their business needs.
First movers are alike in their level of clarity with regard to three key areas of IT governance:
1. Organizational governance. Includes governance of internal roles, titles, hierarchies and human-resources-related functions.
2. Vendor or partner governance. Includes contract negotiations and maintenance, program coordination, monitoring of quality of service and related functions.
3. Enterprise architecture governance. Includes governance of business architecture - business processes, functions, organizational structure - and also governance of systems, data and infrastructure architecture.
All organizations shape and tailor each of the above governance aspects and determine decision-making authority based on the specific imperatives and drivers of their businesses. However, first movers have several distinctive qualities:
• Differentiated business drivers: First movers focus on which of their business drivers are dynamic and therefore need a quick response. For example, finance and banking companies often gain competitive advantage by continually adding new products and services; they also feel a lot of competitive, regulatory and technology pressures. Therefore, their governance or decision making has to be nimble and supported by structures and processes that facilitate rapid information flow. In addition, to ensure agility, decision making needs to be federalized and typically delegated to lower levels in the IT organization.
On the other hand, an organization that is in a relatively non-volatile or mature sector, such as government, transportation or food processing, has business drivers with slower rates of change. IT governance processes and structures in such an organization need to be more focused on internal operational efficiency and can afford to display a lower level of agility. Here, IT decision making typically is either centralized or is completely decentralized in localized business units.
In reality, enterprises have a mix of "fast" and "slow" drivers and have to align organizational and vendor governance structures and processes accordingly. Yet first movers alone recognize the importance of enterprise architecture governance and the need to match IT initiatives with business goals. First movers in IT governance have processes and structures that foster ongoing interaction and collaboration between business and IT domains, especially for the planning and execution of IT initiatives, thereby enabling good business and technology alignment.
• Leadership Influence: First movers also have a culture where their business councils and groups have established channels to influence the highest-level leadership. This provides feedback on decisions and their impact - thereby creating dynamic, self-correcting governance structures.
To find out what works and what doesn't, first movers typically monitor the nature and effectiveness of their governance mechanisms. They monitor accountability at multiple governance levels and track the business value or return on investment achieved from specific IT initiatives.
• Cultural Alignment: Another quality first movers have is that each of the three governance aspects discussed above (organizational, vendor and enterprise governance) are modelled to align with the cultural orientation of the enterprise as a whole. So, if the enterprise views its independent lines of business as truly autonomous entities, it will federate its decision-making capability if it is a first mover. If the enterprise values a collective approach where each line of business has the same processes and tools, to be a first mover, the enterprise will establish strong centralized governance functions.
With effective IT governance, organizations can reduce cost of ownership, increase operational efficiency, and keep pace with changing business needs. Organizations take the first step in becoming first movers by recognizing the importance and relevance of IT governance. First movers establish structures and processes that reflect their mix of fast and slow business imperatives, as well as the cultural orientation of the enterprise. They also emphasize collaboration between business and IT, and continually measure their governance effectiveness. In doing so, first movers ensure that the promise of IT as a business enabling organization is fulfilled.
Vivek Mehra is director and chief enterprise architect for Global Financial Services at Keane Incorporated
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.