Lately there’s a lot of talk about governance. So what is it? One more hurdle to jump before you can get things done? No, take heart.

Good governance simply means good, transparent decision-making. And that means smoother communication and follow-through between IT and business.

Governance

is all about who makes which decision. It’s that simple. And IT governance is just one of many instances of governance. Finance makes decisions with regard to investment policies, customer support decides on service level agreements, in daily life… here’s an example.

A couple was celebrating their 50th wedding anniversary and a reporter asked what was the secret of their long marriage. “”That’s easy,”” the wife replied. “”He makes all the important decisions and I make all the unimportant ones.”” That makes sense, thought the reporter, and asked her to give examples of unimportant decisions. She replied: “”I decide what car to buy, where we’ll go for vacation, whether it’s time to buy a new house.””

The reporter asked what then were the important decisions made by her husband. “”Well, he decides whether to increase Canada’s defense budget,”” she said. “”Or who to sell the next nuclear reactor to, or whether to increase the Bank of Canada interest rate.””

So there are different kinds of governance, both formal and informal.

OK. So how do you go about setting up an effective IT governance? At our organization, we used an outside expert (from Gartner Consulting) to guide us. Having someone who has done it before helps.

Setting up governance is a three-step, iterative process.

Step 1: Identify areas where decision-making must be formalized. In our organization, we decided to look at five areas:

IT Principles: High-level statements about how IT will be used to create business value. Is the role of IT to cut costs or to serve as a strategic differentiator?

IT Architecture: Decisions dealing with technical choices and directions that will help to guide the organization in fulfilling business needs (e.g. desktop and architecture standards.)

IT Infrastructure: Decisions relating to the delivery of shared IT services. For example, who determines when help desk hours need to change? How are changes implemented?

Business Application Requirements: Decisions relating to each business application and how to manage it using application portfolio management.

IT Investment and Prioritization: Decisions on how much and where to invest in IT in a cost-effective manner so the project prioritization process is transparent and known by all.

Step 2: Create a diagram illustrating the roles in decision-making. Who makes which decision? What role does each person play in the process — input into the decision? Endorsement of the decision? Recommendation for approval?

Once the diagram is complete, use it as a starting point for discussion at a system steering committee (or if one is not in place, with the senior management group) on the process of how decisions are made now, and how they should be made in the future.

Step 3: Develop a plan and timetable for implementation and get buy-in to the new governance process.

The key is communication. As CIO you must provide your co-workers with frequent updates and examples of best practices and ensure that business unit managers are engaged in defining the new process.

You’re going to have to do a lot of networking, both formal and informal, building relationships and learning about business issues.

It’s work, but work well worth it. In the end you’ll have business managers with a better understanding of how technol- ogy-related decisions are made, and IT managers with a deeper knowledge of the business’s pain points.

BIO

Catherine Aczel Boivie
Senior vice-president, IT,
Pacific Blue Cross

Catherine Aczel Boivie is also chair of the CIO Association of Canada.

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