Co-authored by Sam Heigh, Montana State Fund (MT) and Jim Moody, Beacon Mutual Insurance (RI)
An It Governance Policy seems cumbersome and many believe that it is a ploy to push responsibility back on the business. Actually, it is. If you need one and don't invest in it, then you are paying double the price in
lack of governance. How many times have you completed a successful
department-specific solution for Claims, only to find out that it violated
financial and/or legal department rules?
Systems do not exist in functional silos, even
if only one department is responsible for inputs. Results of IT work and projects are corporate-wide
responsibilities. Systems and IT resources belong to the entire
company and the whole business needs to decide which changes to make
with limited resources. It is no different than executive decisions allocating headcount or
capital. Plus, whole-company- impacting initiatives succeed only with real
commitment by business operations in concert with expert IT
execution. Governance ensures the right things get done and that everyone is truly
committed.
An IT Governance Policy embodies techniques
engaging key leaders to ensure IT-related projects are in alignment
with and support company business objectives. The policy establishes a framework for authority,
accountability, and the initiative decision-making process. Each company’s policy may be unique, but three things to
consider are:
Montana State Fund (MSF) uses a committee
structure (with charters, total-organization memberships, meeting
notes and signed orders) to facilitate decision-making. MSF uses paired IT and business leadership assignments (also
by signed order) at each level to ensure support. MSF transparently shares proceedings and decisions so all
employees (stakeholders) can see what was decided and who was
committed to projects.
At MSF, a few large IT projects are Board-level
initiatives selected by the entire executive staff during the
strategic business planning process. The executive staff, sitting in
formal committee, also handles tactical or mandated projects (i.e.
law changes); these do not require board approval. A similar sitting committee of Directors from around the
company reviews, approves, prioritizes, and schedules operationally
generated system change requests. All work must fit within the board-approved budget and the
entire leadership is accountable for the planning, staffing, and
outcomes of projects. IT participates equally, but the decisions are quite literally signed
off on by committee members and shared with the whole company.
This approach has worked for MSF, but each
organization and culture may require a different model.
A reciprocal function of Governance is to serve
as a forum to guide IT decision making. Just as an organization wants to ensure that its finite IT
resources are best utilized, IT leaders want to ensure that their
department’s work effort, plans and schedules are providing
optimal value to their business partners.
At Beacon Mutual Insurance Company (BMIC) the
Governance team, which consists of all members of the Senior
Management team, prioritizes initiatives across the entire
organization. The resulting prioritized project portfolio serves as a starting point
for the IT organization to develop an enterprise delivery schedule
that is naturally aligned with the organization’s priorities.
The BMIC IT organization has found the
Governance team to be effective in guiding certain types of IT
decision making, such as the realignment of an integrated delivery
schedule. This decision making scenario frequently occurs when delivery delays from one
initiative cause a ripple effect on other initiatives in the
schedule. In such situations, BMIC has engaged the Governance team as an active
participant in realigning the delivery schedule. By doing so, BMIC has found that the focus of the dialogue
shifts from dissecting the project challenges to a more productive
discussion on how to best move forward. When the scheduling options presented are accompanied by
objective decision criteria such as pros and cons of the alternative
approaches, BMIC has found the Governance team to be highly
effective in guiding a decision that balances the interests of all
departments and empowers IT to confidently move forward with a new
plan for the enterprise.
To philosophize briefly: IT enables and extends
your organization’s strategies and tactics. Governance is the system in which all stakeholders (board,
internal customers, and departments) have accountable input into the
decision-making process and make documented commitments to outcomes. It prevents any one department from making sub-optimal
decisions. It focuses and documents leadership support for company investments. When
leaders are clearly responsible for the decisions, and the outcomes,
they are incented to ensure the project meets organizational needs
and objectives.
So while you may have to drag your
organization’s leaders kicking and screaming into a governance
model, it is well worth the effort. Although there is no single model, involving your
organization in determining that model that best fits you will help
facilitate buy-in and support for your IT organization.
|
