Below is text from a blog by Neil Wells, February 2013 (At that time he was Director of Information Services). I have re-posted (unedited) because I think it is excellent.
How do large and diverse organisations ensure that their information technology (IT) supports their performance goals? How can they ensure that the decisions they take regarding IT give the best value possible, and help the organisation to both grow and remain flexible? In many organisations, while senior executives try to address these questions, other parts of the business are simultaneously making decisions that profoundly influence the value of IT on the firm.
IT governance
IT governance is a process of aligning IT actions with performance goals, and assigning accountability for those actions and their outcomes. To be effective, IT governance must be actively designed, not the result of isolated tactical actions implemented to address that moment’s challenge. But how can this be achieved, particularly within the States of Jersey?
The MIT Model
We can perhaps learn from the Massachusetts Institute of Technology (MIT) Model. It categorises both IT decisions, and the groups, which take them.
The MIT Model identifies five categories of IT decision:
1.IT Principles: high-level statements about how IT is used in the business
2.IT Architecture: decisions about the organisation of data, applications and infrastructure to provide standardisation and integration
3.IT Infrastructure: decisions about the elements that provide the foundation for an organisation’s IT capability
4.Business Application Needs: decisions about the business need for purchased / internally-developed systems and applications
5.IT Investment and Prioritisation: decisions about which initiatives to fund, and how much to invest in IT
The MIT Model also identifies six types of decision-making structure. They are progressively decreasing in their degree of centralised IT governance:
1.Business Monarchy: the top business executives make the decision
2.IT Monarchy: the IT specialists make the decision
3.Federal: the decision is made by a combination of corporate centre and business units, with or without IT involvement
4.IT Duopoly: the IT specialists and one other group (eg business unit leaders) make the decision
5.Feudal: business units make independent decisions
6.Anarchy: decisions are made by isolated individuals or small groups, independent of their department or the organisation
Applying the MIT Model
After detailed research, the MIT study came to the conclusion that only three configurations of these decisions and decision-makers actually worked effectively for corporate IT governance.
Configuration 1 – A division of expertise respecting both technology and business specialisms
1.IT Principles: IT Duopoly - IT executives with individual business unit leaders make high-level policy
2.IT Architecture: IT Monarchy - IT executives decide on standardisation / integration
3.IT Infrastructure: IT Monarchy - IT executives decide on the infrastructure
4.Business Application Needs – Federal - business unit leaders decide together
5.IT Investments and Prioritisation: IT Duopoly – IT executives and business leaders decide on funding allocation
This model lets IT professionals get on with running the infrastructure (and be held to account for performance, naturally), while decisions on principles, business applications and investments are localised to departments / subsidiaries, advised by the IT senior executives. The result is that the corporate centre, and not IT, determines both the business needs and the diversity of business systems.
Configuration 2 – Respect specialisms, but control the overall costs
This is very similar to Configuration 1, except for Business Application Needs and IT Investments & Prioritisation:
1.IT Principles: IT Duopoly - IT executives with individual business unit leaders make high-level policy
2.IT Architecture: IT Monarchy - IT executives decide on standardisation / integration
3.IT Infrastructure: IT Monarchy - IT executives decide on the infrastructure
4.Business Application Needs: IT Duopoly – IT executives and business unit leaders decide
5.IT Investments and Prioritisation: Business Monarchy – corporate executives or business committees allocate funds
In this model, the overall IT investment portfolio is set by the business centre who will test the business case and value for money before approving any IT spend. However each business unit or department has more flexibility in its choice of applications.
Configuration 3 – Business decides together
1.IT Principles: Business Monarchy
2.IT Architecture: Business Monarchy
3.IT Infrastructure: Business Monarchy
4.Business Application Needs: Federal
5.IT Investments and Prioritisation: Business Monarchy
Under this system, IT delivers the IT, but corporate executives make all the decisions. This configuration relies on a high degree of understanding of IT in the business leaders in order to work.
What about the States of Jersey?
MIT found only these three models to be effective, so we should adopt one of them. The question is which one?
The States is a relatively small, geographically compact, but hugely diverse organisation with technically complex IT needs. This would quickly rule out Configuration 3 - the States does not work that way.
The most effective States of Jersey Configuration would resemble Configuration 2. IT Architecture and IT Infrastructure strategies would be decided by the States’ IS executives, who are accountable for performance, resilience and value for money. IS policies, business application needs, and IT investments would be decided and tailored by / for departmental leaders with IS executives.
Currently we mainly have departmentally-based IT decisions being taken and deployed. These fix tactical / critical imperatives at the expense of strategic synergies.
Moving towards Configuration 2 would involve a reform programme encouraging IT governance, but with two short-term caveats:
1.Business Application Needs decisions should be taken by a combination of corporate centre and business units in conjunction with IT executives and departmental leaders (a combination of the Federal and IT Duopoly approaches)
2.IT Investments decisions should be taken by corporate executives and department committees alongside IS executives and departmental leaders (the same combination, but with a greater emphasis on IT Duopoly)
The MIT research provides hard evidence for the importance of governance in all IT-related decisions. It is essential, therefore, that the appropriate configuration is adopted so that all the appropriate groups are properly consulted before important IT decisions are made.
THE AUTHOR
Neil Wells (Director of Information Services)
February 2013
Original Source
http://www.gov.je/Government/Departments/ChiefMinisters/ChiefMinistersSections/InformationServices/Pages/FutureInformationServices.aspx#anchor-0
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