ICT Governance Decision Making

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Current ICT Governance Decision Making

There are several challenges facing the corporate world today. ToKoDa is not spared from the effects of these challenges especially those emanating from the euro and debt crisis, global financial crisis and high exchange rates between the Australian dollar and other currencies around the world.

This has discouraged exportation, leading to stiff competition from the local firms and low demand from overseas customers. Such conditions are negatively affecting the company’s long term strategic plan. Due to these prevailing circumstances, the information system division at ToKoDa reduced its annual budget for the financial year 2012.

Operating Model

The current ISDs operating framework poses a lot of challenges such that both the management and the employees have to cope with its unreliability. The source of these inconveniences can be traced back to the five core models that are composed of a set of policies and provisions that guide the use of Information Technology architecture (Ross & Weill 2009).

To start with, the information architecture is the one responsible for limited data transfer across different sections as well as data duplication. Secondly, the business architecture is responsible for ‘low time’ in conveying data to the market, high capital costs of ICT related projects and limited connectivity to the market.

Thirdly, the application architecture is the major cause of the low standards of services rendered as well as the unreliability of core systems. Fourthly, the technology architecture is responsible for the barriers or challenges experienced by new business initiatives. This is as a result of its incomparability and high operational costs in the ISD division.

Finally, the security architecture is one responsible for the overall inconsistency in the approach adopted to address information security, information leakage and limited application of control measures and policies.

Governance Arrangement Matrix

The current IT governance matrix is identified as having several faults that affect the output of those working in this department and in the organization as a whole (Ward & Peppard 2002). Information delivery fault can be described as the inability to trace and locate information from across the information silos. In spite of the fact that there are multiple information portals, there is a problem of partial coverage of these channels.

A combination of all these factors leads to the limited visibility of the corporate plans. Most of the desktop versions are largely unsupported because they are 2-3 versions behind the ones currently used. As a result this poorly developed and integrated software, there is information inconsistency. Due to poor end- point protection, the problem of information leakage is seen to persist.

The company’s multiple System Application Program (herein referred to as SAP) infrastructure is extensively modified and it is fast approaching its critical state. This poses a danger to the platform. The poor information management platform leads to incomplete and inconsistent directives on the part of the directors and their approach towards enterprise content management. It also poses a risk to data archiving and such other factors. All this cumulatively bring about wastage and inefficiency in the current IT infrastructure investment.

ICT Governance Design Framework

As a separate unit, ICT strategies and directions are mainly found to be part of the requirements of ISD division. To add to this, ICT financial and investment management processes are managed internally by the division, thus ensuring that financial resources required for this are made available for such investments to be actualized.

There is the exclusion of the executive management team and the board of directors in ToKoDa with regard to the appropriate investment avenues for ICT. There is a tradition of investing directly without carrying out an extensive feasibility study in order to come up with a business case plan. Some important investment undertakings are not carried out as a result of this. Such significant investment undertakings include risk management and performance assessment.

From the above information, the ISD division can be viewed as an independent unit reporting directly to the chief executive officer at ToKoDa.

ICT Governance Policy Framework

Some of the current ICT governance policies can be viewed as ICT projects in their own rights. They are managed by an independent project manager. Most of the project managers are contractors. It is noted that leadership is sought from either the senior management team at ISD or ToKoDa during the execution of the project. Another important policy is evidenced in the fact that these projects are managed at the operations level.

The policies do not define a program and portfolio management methodology to be adopted. They also fail to define the monitoring mechanisms to be used, the form of leadership to be provided by the senior management in either ISD division or the general ToKoDa, risk management strategies and performance management. The oversight panel, body or committee to manage the project is also not clearly spelled out.

ICT Governance and Performance Assessment

In an ideal situation, ISDS’s ICT investment should be aligned with the strategies adopted to achieve ToKoDa’s business goals and objectives (Boar 2001). The performance of ICT governance team is poor because of the redundancy of the servers, the depletion of SAP infrastructure, incomplete and unreliable managerial channels among other factors.

Most of the desktop software is obsolete and unsupported. Information delivery from desktops and notebooks is unsecure due to the nature of the channel. The high cost of supporting and operating this infrastructure has led to a loss in the investments portfolio of ICT.

Analysis and Evaluation of Current ICT Governance Decision Making

A careful analysis and evaluation of the current ICT framework and its governance will reveal several characteristics (Ross & Weill 2009). One of them is the fact that there is no ICT governance that is in existence as a result of the independence of the units and the top management struggle to identify the value of ICT investment.

This can be attributed to the lack of a functional and standardized ICT investment management model. There is no structural alignment between the ICT strategies and the business strategies. Risk management and performance management are not part of the current project and investment processes. These factors have led to the poor functionality of the current frame work as a result of the decision by the board to reduce this division’s budget by 48%.

Proposed ICT Governance Policy Framework

In order to align the business strategy in with the ICT strategies, Ross, Weill & Robertson (2006) are of the view that there is need for the adoption of a new IT frame work.

To this end, it is noted that Val-IT and COBIT guidelines can work well since some of their features include risk analysis, growth and transformation of the business in line with it requirements, control of ICT by the management among others. Val-IT’s and CobiT’s domains and processes are designed to monitor the effectiveness of the overall governance framework and supporting processes. They are also designed to recommend for improvements as the need may arise.

Identified Requirements for ICT Governance Policy Documents

CobiT is a comprehensive framework that improves management and delivery of high quality information technology- based services. It has four main domains that are likely to help ISD in several ways.

Planning and organizing domain can help ISD to formulate tactics and strategies as well as identify how IT can optimally contribute to the achievement of business objectives. This domain recognises the need to strategically manage, plan and communicate the vision of the business organisation.

This communication is between the organisation and other stakeholders such as the managers, the employees, the suppliers, the clients and such others. The aim is to accelerate the achievement of the business objectives. The domain will help the management to properly organize the technological infrastructure.

Acquiring and implementing domain helps in the identification and mapping of ISD’s shortcomings. It helps in the identification, integration as well as implementation of possible solutions into the daily business operations. Moreover, change and maintenance for COBIT systems in accordance with the changing needs of ToKoDa will enhance improved system functionality which is instrumental in the achievement of business goals.

Monitoring and evaluating domain will exclusively address the various strategies and plans to upgrade ICT processes by recognising that ISD needs regular assessment and evaluation from time to time. This is to ensure that it is compliant with the control and regulation standards set. This domain will also address performance management, compliance with external regulations, monitoring and evaluation of internal controls and governance.

Delivering and Supporting domain tackles the concerns of actual delivery of the required services by ISDs. This includes management of security apparatus and continuity of the same, security of operational facilities, support service for users as well as data management.

On the other hand, Val IT is a framework that provides for improved information technology governance with the aim of creating business value in ICT investments. It will support ISD goals by providing optimum conditions for investments in ICT at an affordable cost and within the division’s level of risk. This will be guided by a set of principles in the management process that are enabled through key management practices. This will be achieved through the application of its three main domains and processes as outlined below:

Value governance domain establishes an informed and committed executive committee which will understand the importance of IT to ISD and as such develop sound IT strategies.

This will ensure that IT and business strategies are aligned and integrated. The leadership will define and monitor key metrics and respond on time to any changes or deviations by engaging all the stakeholders and assigning appropriate accountability standards for the “………delivery of capabilities and the realization of business benefits” (Ross & Weill 2004, p. 23).

It will also ensure that Val IT is continually monitored, evaluated and improved. They will also be charged with the responsibility of providing strategic directions for investment decisions as well as defining the portfolio required for new investments and resultant IT services, assets and other resources.

Portfolio Management Domain will review and promote clarity between ISD and the business strategies. This is in addition to the identification of investment opportunities for IT to influence or support the strategy. It will also help in defining an appropriate investment mix based on rate of return, degree of risk and type of benefit for the programs in the portfolio that implemented the strategy.

The domain will help in the determination of potential sources of program funds and the implications of the source of funding on the investment return expectations. It will also assist in creating and maintaining a business inventory for IT and human resources.

In addition, it will be instrumental in understanding the current and future demand for human resources to support the IT- enabled investments and identify shortfalls in the plan. It will be seminal in the evaluation of business program cases, assigning a relative score and the making and dissemination of investment decisions based on the overall investment portfolio and the individual scores.

Finally it will provide a comprehensive and accurate view of the performance of the investment portfolio in a timely manner to enhance review and evaluation on the part of the key stakeholders. This is together with the enterprise’s progress towards the achievement of the stated goals and objectives.

Investment Management Domain will help the executive management team to identify business requirements, develop a clear understanding of candidate investment programs and to analyze alternative approaches to the implementation of the programs. It will help in defining each program and documenting as well as maintaining a detailed business case for it. This is including the benefits’ details throughout the economic life cycle of the investment.

It will also be instrumental in encouraging accountability and ownership of benefits realized. Another aspect is the management of each program throughout its full economic life cycle including retirement and monitoring and evaluation of the program. It is expected to report on each program’s performance in relation to ISD and ToKoDa provisions and expectations.

Proposed Development of ICT Governance Policy Documents

The idea is to ensure that the proposed framework brings to an end the dependency of ISD by focusing on ICT strategies to align the former division’s ICT strategies with other business units at corporate level. Establish portfolio management model to incorporate ICT investment into ISD’s enterprise management level.

Incorporate and implement a standard framework into current practice. Incorporate effective risk and performance management process. Easy proliferation of servers and databases at all levels of the organization and also ensure that the channels of delivery are secure. Form a committee or panel to oversee all the ICT investment practices. Introduce business case model and adopt a best investment practice.

Proposed ICT Governance Performance Measurement

Identified Performance Indicators

According to Bernstein (2011), the governance framework will increase top management’s interest in the running of the ISD division. There should be accelerated implementation of the value management process as well as the legal compliance. Every investment should start with a definition and identification of the investment opportunity.

This is then followed by the development of a detailed and clear business case. Alternative analysis should always be carried out which will then be followed by a program plan and the benefits to be realized from such a plan. This should assist in the identification of the full life cycle.

Proposed Metrics and Measurement of Outcomes

This should lead to an upsurge in the development of detailed business cases which will include full life cycle costs and benefits. This will in turn increase the level of accountability and traceability of finance and resources set aside for ICT projects and new ideas. This will be due to motivated employees with the new IT systems enhanced by the newly adopted frameworks. As a result, comprehensiveness and compliance of business cases before the launch of a project will be improved.

The organization will be in a good position to monitor and review the performance of each portfolio and IT systems as a result of the adoption of VIAL IT and CobiT frameworks. This will help the organization to bring about changes that are in line with the external and internal business environment. The organization will be able to reprioritize these systems or portfolios as per the needs and capability to properly manage critical ICT resources.

This is together will effective monitoring and evaluation of available resources as well as forecasting and planning in advance to address resource shortfall. This is considering the fact that the organization is operating within an environment that is characterized by needs and requirements that outweigh the available resources. As a result, the management and planning for the resources becomes critical as it determines how well the organization attains the identified goals and objectives.

Introduction of desktop real time software will lead to increased productivity on the part of employees and enhance communication at all levels. It will also promote the use of an effective SAP infrastructure network and reduce its running costs. Another aspect is the reduction in the cost of maintaining and supporting all the desktops. Office servers will benefit from economies of scale since they will not repeat themselves. Management of the hosting server will be easy and this will lead to consistency and easy control of the system.

Relevant Maturity Models

Val IT’s management portfolio will enable the organization to understand the future demand for IT resources. It will also help in the establishment of an investment threshold to determine the overall budget and current spending trend. The model will help in managing and keeping track of the benefits realized as a result of implementing a monitoring and evaluation program. This will lead to improved utilization and performance of the monitoring and management processes.

CobiT framework will ensure that ICT goals are supporting business goals. This is very important since it ensures that the two sets of goals are not in conflict with each other. On the contrary, it ensures that the two sets of goals complement each other. The achievement of the ICT goals will go a long way in the achievement of the overall organizational goals.

It will transform ICT services support model from that of an in-house support model to outsourcing model. It will improve on service delivery processes to customers, shareholders, management and employees.

References

Bernstein, KK 2011, Information technology and business management, Free Press, New York.

Boar, BH 2001, The art of strategic planning for information technology, 2^nd Ed., John Wiley & Sons, New York, NY.

Ross, JW & Weill, B 2004, IT governance: how top performers manage IT decision making for superior results, Harvard Business School Press, Boston.

Ross, JW & Weill, B 2009, IT savvy: what top executives must know to go from pain to gain, Harvard Business Press, Boston.

Ross, JW Weill, P & Robertson, DC 2006, Enterprise architecture as strategy, creating a foundation for business execution, Harvard Business School Press, Boston, MA.

Ward, J & Peppard, J 2002, Strategic planning for information systems, 3^rd Ed., John Wiley & Sons, Chichester, UK.

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