IT governance is a process which include a set of controls and practices that ensures that the IT function is working on the right things at the right time in the right way with a view to accomplish the stated objectives and thereby contributing towards the meeting enterprise objectives and goals. Any process that aligns IT to business goals is the right strategy. However, it’s the change required and the compromises on the part of business leaders that can come in way to make it a not so easy program.
IT Governance offers many benefits, which include reduce the cost of day-to-day operations, improve overall operational efficiency and consistency, free more resources for strategic initiatives that improve competitiveness, choose those initiatives far more wisely working on the right things, bring those initiatives to market faster with less risk and bring IT into close alignment with business priorities. But at the same time the results of an ineffective implementation can be devastating. Some such devastating results could be:
- Business losses and disruptions, damaged reputations and weakened competitive positions
- Schedules not met, higher costs, poorer quality, unsatisfied customers
- Core business processes are negatively impacted (e.g. SAP impacts many critical business processes) by poor quality of IT deliverables
- Failure of IT to demonstrate its investment benefits or value propositions
The Three Pillars of IT Governance
To understand the obstacles to IT Governance in an organization, it would be appropriate to understand the three critical pillars on which a successful IT Governance program is built on. The following are the three critical pillars of a successful IT Governance implementation:
Leadership, Organization, Decision Rights and Metrics
The IT Governance Initiative must be decomposed into manageable and accountable work packages and deliverables and assigned to owners for planning, development, execution and continuous improvement. The IT Governance program must have clearly defined roles, responsibilities and decision rights for the entire program and for each major component of the integrated IT Governance framework and road map.
A decisions rights matrix identifying decision influencers and decision makers is necessary to clarify decision roles and authority levels for the major IT Governance components.
Flexible and Scalable Processes
Processes form an integral part of the IT Governance program and as the IT Governance framework is made of such processes and controls, which shall be defined. It is also important these processes evolve over its usage based on feedback collected through various metrics. At the same time, processes should not only be simple enough to understand and implement but also flexible enough to provide room for improvement. People tend to ignore processes, if it is difficult to understand and practice as part of their day to day work. Thus the integrated framework approach works best.
Most business components rely on Technology for most aspect of their value, reliability or efficiency. Even choice of right technology plays a key role in making up the first two pillars. Given that technology evolves in an accelerated rate, there should be a clear watch on such advancements and the technology road map should provide for identification and adoption of the right technology at the right time to get the maximum value. Most organizations have recognized and accordingly have started managing this area well.
The Key Obstacles
Most often, the business leaders are motivated and rewarded by having their small part of the organization succeed. IT governance requires that the scarce resource of technology capacity be diligently distributed across the organization for overall business success. In other words, it requires that IT cannot be allocated on the basis of individual team needs but rather on collective, organizational goals. A recent empirical study by Lee uncovered factors such as ‘lack of IT principles and policies’, ‘lack of clear IT Governance processes’, ‘lack of communication’, and ‘inadequate stakeholder involvement’, as inhibitors of IT Governance implementation success. A good understanding on the barriers or obstacles that hinder the success of IT Governance implementation is important as once understood, their effect is understood and pre-emptive actions can be taken to address them
Implementing IT Governance is a long and continuous journey, where obstacles and challenges are aplenty. A good understanding on the barriers or obstacles that hinder the success of IT Governance implementation is important as once understood, their effect is understood and pre-emptive actions can be taken to address them. The most frequently experienced obstacles include:
Instituting effective IT governance requires dealing with the “c-word.” The culture of a company—“the way we do things here”—can be a tremendous driver for business success. It can also be—and often is—a giant resistor that dampens positive change. Immeasurable amounts of energy have been dissipated trying to change embedded habits and methods that hid behind the cloak of “culture.” Today, worldwide, the trend is toward collaborative culture, especially in the sharing of information. The attitude that “information is power” lingers in some dark company corners. In some disciplines, such as sales, where compensation is directly related to personal contacts and initiative, it is arguable that the status quo has value. In most cases, though, managements are trying to rid the company of these attitudes in order to unlock the power of teamwork leveraged by technology. IT governance requires teamwork and information sharing to succeed.
Resistance to Change
Virtually every manager in business today has encountered employees who held up organizational change by insisting on continuing with the “old way” of doing something, even though the success of the “new way” depends on universal adoption. Fear of failure could be one of the reason why people are afraid to commit to change, uncertain that they can successfully implement it and fearing that if they fail, they will be held accountable. Another reason could be the existence of innate conservatism and uncertainty emanating and causing resistance
Lack of Appropriate Communication
Communication is really at the heart of IT governance and the lack of appropriate communications can cause a major disconnect between IT executives and business executives. IT still continues to communicate in more technology terms, which is just not relevant to the business and they just don't understand it. So good communications is extraordinarily important so that everybody is on the same page and that the business and IT become very closely engaged. Again -- we're making strategic decisions on where we're going to invest in technology and those are really business decisions, not technology decisions. That way, lack of communication can easily derail the IT Governance program of an organization.
Lack of Value Proposition
CIOs must be willing to take the lead in the search for value-creating IT processes. If they are not, others—real experts—are glad to do so, in language that resonates with CEOs. For instance, if you take the Project and Porfolio Governance the 'Fail Fast' or 'Fail First' approach may be helpful. If the processes are designed around this approach, we could see that the IT programs and functions get evaluated at various stages by analyzing the collected metrics to see if it would still make sense to let the project, or program to move into the next stage. At every stage there using the metrics, a revisit to the project charter and the business objectives would ensure that the desired value out of such project or program is still the same.
Internal organizational politics may exert themselves, as the adoption and implementation of formal ITG practice will sometimes bring a shift in decision rights and associated powers that currently exist in the organization. It is seen in most organizations that projects that should be given a higher priority mostly be based on “who speaks the loudest” rather than“ looking at the current business, collected metrics, what is the immediate need?”