IT Governance and Enterprise Architecture

I came across an interesting IT Governance Global Status Report 2008 from the IT Governance Institute.

The study and report was conducted by PriceWaterhouseCoopers (PwC) was the third one of its kind—the first two conducted in 2003 and 2005. In this latest study for 2007, interviews were conducted with 749 CIOs and CEOs in 23 countries.

Here are some interesting findings from the study on how enterprises are fairing on IT governance and my thoughts on these:

Championed by—in most cases CIOs champion IT governance (40%), followed by CEOs (25%), and then by CFOs (9%).

Since CIOs are predominantly responsible for IT governance, they need to step up and elevate governance as well as its complementary function, enterprise architecture, and resource it as a priority for effectively managing IT investments.

Business management engagement—68% of respondents said that business management participates (42%), leads (14%), or is fully accountable (12%) for IT governance.

From my experience, often business managers are more engaged in IT governance than IT managers; we need to work with the all the SMEs (IT and business) to understand the importance of IT governance and encourage and engage them for their active participation.

Positive view of IT—“Non-IT people…have a much more positive view of IT” than do IT people. 72% of general management agree strongly on the value creation of IT investment versus only 46% of CIOs.

We need to explore why IT professionals have a more negative view of IT than our customers on the business side of the house have and to reconcile this. Is it just that we are professionally self-critical or that know more about our dirty laundry?

Importance of IT to overall corporate strategy—“93 percent of respondents answered that IT is ‘somewhat’ to ‘very important’ to the strategy.”

IT is important to the business achieving its strategic goals. We need to ensure sufficient time, attention, and resources are allocated to developing an IT strategy and enterprise architecture that aligns to and support the business strategy.

IT governance implementation—Only 52% are ‘in the process of’ (34%) or ‘have already implemented’ (18%) IT governance; however, another 24% are considering implementing.

We need to pick up the pace of IT governance implementation. IT governance is critical establishing and enforcing the IT Strategic Plan and enterprise architecture, to vetting IT investment decisions and sharing risks with project shakeholders, and providing oversight and due diligence to ensure successfully project delivery.

Current IT governance practices—Some of these include: “IT resource requirements are identified based on business priorities” (80%), “boards review IT budgets and plans on a regular basis” (72%), “IT processes are regularly audited for effectiveness and efficiency” (67%), “Central oversight exists of overall IT architecture (IT Architecture Board or Committee)” (63%), “IT project portfolio is managed by business departments supported by the IT department” (59%), “Some form of overall IT Strategy Committee exists” (58%), Standard procedures exists for investment selection (IT Investment Committee)” (55%).

IT governance best practices are well established through frameworks such as COBIT, ITIL, and ISO20K. We need to leverage use of these frameworks to develop our organization’s IT governance solutions and ensure this vital enterprise architecture enforcement mechanism!

IT Governance and Enterprise Architecture

Prediction Markets and Enterprise Architecture

A very interesting article in ComputerWorld, 7 August 2008, called "Bet on it; Employee wagers help companies predict the future," shows how difficult planning can be and highlights the necessity of bringing stakeholders to the table to get better information (enterprise architecture) and better decisions (IT governance).

Google, for example, has for three years been using employee bets (over 80,000 so far) to predict market technology. “And Google has found that its employee bets are usually right.”

“Forrester Research Inc. suggests that other companies can benefit from putting in place prediction markets to more effectively tap employee opinions on topics ranging from if a store will open on time to picking specific features for a new product.”

Oliver Young, a Forrester analyst, says that “One of the biggest struggles that most companies have—not surprisingly—is predicting the future. Simple things like project updates are full of politics, full of meetings. One of the biggest values of prediction markets is you get a lot more people looking at these major questions.”

Other companies like Best Buy, Corning, HP, and Qualcomm are using predictive markets for sales projects, product evaluations, estimating project delivery, and assessing market conditions.

In predictive markets (a.k.a. crowdsourcing), “employees operate as traders to earn points--and potential prizes and other recognition--for correctly predicting future events…for example, a person who has been good at predicting how new products will be received can be invited into meetings where new product designs are discussed.”

While betting is typically associated with greed and vice and people ending up losing their shirts, in predictive markets, employee betting is used in a positive way to capture information from a broad spectrum of people and thus, enable better governance/decision making.

Predictive markets are an affirmation of the need to bring people in the planning and decision making process. Information needs to be captured from across the enterprise , for example, using predictive markets or other collection techniques.

The more information served up in a user-centric way, the better the decisions.

Prediction Markets and Enterprise Architecture

What Not to Tell Your Boss and Enterprise Architecture

ComputerWorld Magazine, 20 June 2008, tells us five things you don’t want to tell the CIO and which I believe tracks closely with the enterprise architecture function and goals, as follows:

1. “All about the technology -- and nothing about the business”—just like enterprise architecture is about business driving technology, rather than doing technology for technology’s sake, so too the CIO is interested in aligning business and technology. So don’t just go to the CIO talking technology solutions unless you have a clear understanding and can articulate the business requirements.
2. “There's only one solution”—in enterprise architecture and IT governance, we validate requirements against the architecture—the baseline, the target, and the transition plan. It is especially important to check if there are existing systems, products, and standard that can be used to meet user requirements, rather than building or acquiring something from scratch. There is rarely only a single technology solution for a business problem. Therefore, we need to evaluate the proposed new IT investment in terms of the return on investment, risk management, strategic business alignment, and technical compliance. Additionally, we need to review the analysis of alternatives to make sure we are effectively managing our scarce IT resources.
3. “Bad opinions about your colleagues”—EA planning and governance makes information transparent and enables better decision making. With EA information, vetting of IT investment and collaborative decision making, there is no need to point fingers at each other over failed IT projects. Instead, through sharing information and bringing IT project stakeholders together, we all have input into the decision process and share the project risk.
4. “There's no way”—With enterprise architecture, rather than say there’s no way to achieve enterprise goals or overcome technical challenges, we develop a target and plan for how we will do it. No, the goals are not achieved overnight, but rather by following a meticulous and vetted plan, usually over a period of three to five years, we can transform the enterprise.
5. “A surprise”—Bosses don’t like surprises. In a professional setting, we usually like rational thinking, process, structure, and planning, so that we can effectively deal with the chaotic world out there. EA planning and structured governance helps the organization stay on course and not get surprised or thrown. The planning process itself involves looking at our strengths, weaknesses, opportunities, and threats, and makes us more self-aware and proactive as an organization, so there are less surprises waiting to ambush us.

EA helps us to NOT have to tell our boss, the CIO, things he doesn’t want to hear, because we are proactive in our approach to planning and governance.

What Not to Tell Your Boss and Enterprise Architecture

Managing Human Capital and Enterprise Architecture

Human capital is one of the perspectives of enterprise architecture that I have been advocating for the Federal Enterprise Architecture to adopt.

ComputerWorld, 19 May 2008, has a good article on “How to Manage Brilliant People,” which can be applied to all everyone—brilliant or not.

Here are some of the best dos and don’ts (in my own words for the most part) and my two cents on them:

1. Manage results, not process—Identify the results you’re looking for, but don’t prescribe to others how they need do it. This is micromanagement plain and simple. I don’t like to be micro-managed and I don’t think others do either. Treat people like adults and give them the freedom to do their jobs (assuming they haven’t abused that freedom and trust in the past).
2. Vet ideas, then make a decision—Communicate with your staff openly and creatively. Everyone on the team has good ideas and can contribute to analyzing problems and working out viable solutions. Not everyone will agree on the solution, so after a reasonable discussion and analysis, it time for the manager to make a decision. Analysis paralysis is detrimental to you, your team, and your program. Better to make a timely decision and then course correct as new facts become available, then to wait and wait and wait. Time is a critical success factor for most important decisions. The marketplace waits for no one.
3. Be a good mentor, and learn from everyone—We all have something to teach others and to learn from others, because we all have strengths and weaknesses. It doesn’t matter if you’re the boss or the subordinate. For the boss, it takes a degree of humility and open mindedness to “be bested” and more than that to actually learn from it.
4. Admit what you don’t know, not just what you do know—Generally, we all are more than in a hurry to mouth off what we know and show off what we can do. But how many of us are quick to admit what we don’t know? It takes a degree of maturity to say that I don’t know, but I’ll find out and get back to you, and not “feel insecure and threatened.”
5. Raise the bar, and stretch your staff—Just like when setting organizational goals, you want them to be achievable, yet ambitious, so too with setting personal and team goals, they should be challenging, but doable. That way you keep productivity high and morale high and people know they are growing (not stagnant).

At a manager in the IT world, I have learned that technically, pretty much we can do anything (given the time and resources); however, the trick to good management is not the technical stuff, but rather the people stuff. People can be more complicated than landing a man on the moon that’s why we need solid leaders, plenty of management training, compassion and empathy for people, and the institutionalization of human capital as part of our everyday EA planning.

Some early things that I would suggest in developing a human capital perspective in architecture would be:

1. Identifying best practices and benchmarking leadership and management performance against them;
2. Establishing a framework for professional development and training in these areas;
3. Identifying key knowledge, skill, and ability areas for the organization;
4. Inventorying employees against #3;
5. Identifying gaps;
6. Creating alignment between function and talent; and
7. Developing performance plan templates so that everyone understands their roles, goals, and the rewards available to them for high performance.

Of course, there is much more that can be done, and this is only a beginning. This is something that I am very interested in and about which I would welcome any comments and feedback.

Managing Human Capital and Enterprise Architecture

Governance and Enterprise Architecture

Enterprise architecture is critical to effective IT governance. EA establishes the baseline and target architectures and the transition plan and enforces these through the EA Board, who conducts technical reviews of proposed new IT projects, products, and standards. EA guides the organization to performance results, business-technology alignment, information sharing and accessibility, systems interoperability and component reuse, technology standardization and simplification, and security, including confidentiality, integrity, availability, and privacy. In short, EA ensures information transparency of business and technology to enhance organizational decision-making.

But what happens when organizational governance, whether EA governance or corporate boards, that is supposed to ensure transparency, does not?

The Wall Street Journal, 14 January 2008, reports “Why CEOs Need to Be Honest with Their Boards.”

“People who have spent time in corporate boardrooms say honest communication is often lacking between CEOs and their fellow directors. ‘Communication and transparency being a problem is more the rule rather than the exception.’”

Sometimes this makes headlines, such as when CEOs conduct activities without informing or getting permission from their directors, such as:

1. Backdating stock options
2. Holding merger and acquisition talks
3. Trying to solve problems independently that need to be vetted

“‘Many times it’s the thing not said, or overly optimistic positioning that gets CEOs in trouble’…as leaders, they want to take charge and inspire confidence, even when things are turning sour. But that instinct can lead them to be less than forthcoming about problems—which can snowball into severe tensions with directors.”

CEOs who do not keep their board up-to-date do so at their own peril—“In 2006, 31.9% of CEOs who stepped down world-wide did so due to conflicts with the board…the forced departures were ‘nearly always because of transparency issues...[this leads to a] slow deterioration of trust, so the termination is generally packaged as a ‘loss of confidence.’”

Things have definitely changed in the relationship between boards and CEOs─ “‘There used to be a bright, clear line: We, the management made the decision and they, the board, reviewed and approved those decisions”…that bright, clear line has gotten really fuzzy now.”

Why does the CEO resist this transparency with the board?

“It’s the CEO’s job to ‘put a good face on things to mobilize and drive the changes that any company needs going forward…this requires inspiring people and giving them confidence that if you only make this last push you will get there.” CEO’s don’t want to admit that things are not progressing as expected. They don’t want to concede that they don’t have all the answers.

What’s the lesson here for User-centric EA?

We can’t think that we have all the answers. Collaboration, vetting, and information transparency is critical to enabling better decision-making. Whether information transparency is coming from EA to business and technical information stakeholders or from the CEO to his board of directors, information transparency inspires trust and “breeds self-correcting behavior” (as the U.S. Coast Guard Commandant often reminds us). Hiding problems, being overly optimistic or self-reliant, or working in stealth are not the cornerstones for good enterprise governance. Rather, openness and frankness about program, projects, products, and plans (EA or otherwise) enables good governance. Hearing opposing points of views leads to better decision-making. Even if it is sometimes painful to hear or slows down the process some; a little enterprise introspection goes a long way to improving the end result.

Governance and Enterprise Architecture