ITSS 4370 ITCMF part 1

IT management and governance

How decisions are made about adoption, investment, implementation, and deployment of information technology within organizations.

Organizational perspectives on planning and implementation.

Uses the Critical Capabilities of the IT-CMF and ITIL as framework for organizing discussion

Trend from the Field

Focus on Customer Service and the Business

Adapt or Die – keep up with new technologies

Growth in Demand WITH flat or declining budgets

IT as an operational expense

Flattening of the IT Organization

organizing for systems management

IT Organization Design Factors

Infrastructure Design Factors

Infrastructure Departments with Alternative Locations

IT Organization Design Factors

Departmental Responsibilities

Planning Orientation

Infrastructure Processes

Basic IT organization

Basic IT Organization with Administration

what does IT CMF define and deliver

business aligned IT improvement strategy based on capability management

what is capability underpinned by

competencies of individuals

capability(org level)

is the organization’s ability to readily mobilize (integrate, reconfigure, acquire, release) resources (tangible and intangible) towards achieving specific outcomes1

Competency (Individual Level)

the demonstrated ability of the individual to apply knowledge, skills, behavior, and attitudes for achieving observable results2

Enterprise IT Capability

is an integration of people (roles), processes, and organizational structure technology that provides IT Services in alignment with strategic intent and investment allocation1.

IT CMF defines IT capability as

the systematic mobilization of IT resources in support of targeted outcomes.

systemic mobilization

integration reconfiguration gain and release

IT based resources

tangible

intangible

tangible

financial physical infrastructure and human assets

intangible

software, data, intellectual property, branding, culture

IT capability within IT CMF is further defined as

consisting of 37 capability building blocks that an organization needs to develop and mature to constantly deliver business value from its IT resources in support of it business goals

IT Capability comprises the

People

Process

Intellectual

Technology resources

IT Capability is the range of potential output and deliverables from the IT function to the business:

What IT can ‘do’ for the business

Communicated in a common business language

When IT capability is mature, it is understood by business executives, becomes a differentiator in the enterprise, an is integrated into overall corporate strategy

how is IT performance measured

by the business value that the IT organization (and IT itself) can deliver for an organization. This includes IT as a strategic options generator, enabling the business to react quickly to new business opportunities and respond with innovative IT solutions.

Context for defining IT Business Value and Business Benefits: Five Principles1

IT Has No Inherent Value.

Benefits arise when IT enables people to Do Things Differently.

Only the Business - that is, all of an organisation’s managers and individual contributors can release the potential Business Benefits and Business Value of IT.

All IT projects have outcomes, but not all outcomes are benefits.

Benefits must be actively managed for value be obtained.

A process view of IT value generation1

1. IT’s impact on intermediate business processes on activities in an organisation’s value chain

2. Management of information

automational effects

The efficiency perspective of value deriving from the role of IT as a capital asset substituting labour, administration and other costs. Here, value results from impacts such as labour savings, productivity improvements, and cost reductions.

informational effects

Emerge from IT’s capacity to collect, store, process, and disseminate information. Value accrues from improved decision quality, decreased use of resources, enhanced organisational effectiveness better quality, and employee empowerment.

transformational effects

The value deriving from IT’s capability to faciliate and support process innovation and transformation. The business value associated with these effects manifests as improved revenue, increased agility, and product enhancement as a result of re-designed organisational structures

IT-CMF defines IT Business Value as

The contribution that IT‐based resources and capabilities make to helping an organization achieve its objectives.”

IT Business Value is captured by

organizing and managing IT such that the potential business benefits arising from the use of IT are actually realised. realized

The realization of IT Business Value and Business Benefits depends on

business changes as well as technology

gaining commitment to achieving the benefits

enabling the success of the IT investment to be judged objectively, based upon relevant and appropriate evidence2

real world benefits of using IT CMF

• improvements in it capability and reduction in overall spend

• savings in total operating budget for tech innocation and savings of total budget for experiment execution

• reduction in set up working time for new servers

• IT-CMF is a key measure to track performance over time... Training and certifying senior staff in IT-CMF has significantly improved the quality and consistency of BP’s work

IT-CMF

A strategic partnership between IT and the organization-at-large to unlock the business value of IT

Hierarchy of IT-CMF Artifacts

1. IT CMF

2. Macro Capability

3. Critical Capability (CC)

4. CC Category

5. Capability Building Block (CBB)

6. Practice outcome Metric POM

IT-CMF is comprised of four Macro Capabilities

1. managing it like a business

2. managing the IT budget

3. Managing IT for business values

4. Managing the IT capability

Managing IT Like a Business

shifting the focus from technology as an end to itself towards the customers and the business problems to which IT can provide solutions

what supports the 4 macro capabilities of IT CMF

the 37 critical capabilities

managing the IT budjet

A proactive and explicit strategy for finding a sustainable economic model for IT products and services.”

Managing the IT Capability

What IT can do for the organization... Includes the knowledge, skills, tools, processes, abilities, and motivation available in the IT department to support or perform enterprise business activities.”

Managing IT for Business Value

An integrated process of selecting and implementing investments in IT that will likely bring the highest value to the organization

IT-CMF Critical Capabilities (CCs)

represent the key activities and procedures that must be defined and controlled to enable an IT organization to plan and deliver IT solutions, and to measure the business value outcomes of its initiatives and daily activities

Each CC defines a particular

domain, function, set of processes, or roles within the IT organization

Each CC refers to a specific set of integrated activities required to deliver specific outcomes in support of value creation

Behaviours

Actions

Methods

Metrics

each critical capability has what to support it?

rich documentation

Managin IT for business value (critical capabilities)

• BAR: benefits assessment and realization

• PPM: project portfolio management

• TCO: total cost of ownership

BAR Value

The Benefits Assessment and Realization (BAR) capability helps an organization forecast and manage the realization of benefits from IT-enabled change initiatives

BAR Goal

The Benefits Assessment and Realization (BAR) capability aims to forecast, crystalize, and sustain the business benefits arising from IT-enabled change initiatives.

BAR

is the ability to establish an outcomes focus for the selection and management of IT-enabled business change initiatives to ensure that their potential value is delivered. BAR addresses the cultural and behavioural change needed to create and to sustain value from those initiatives. In this way, BAR ensures that business benefits are planned, dynamically adjusted, and actually achieved.

Bar Covers

Increase organizational awareness, understanding, and commitment to creating a value mind-set/culture and sustaining value from IT-enabled business change across the full life cycle of the investment.

Promote the message that benefits do not come from technology itself, but rather from the change that technology shapes and enables.

Manage how organizational change is effected to achieve business benefits.

Focus management on outcomes of IT-enabled change initiatives and measurable benefits rather than on change activities.

Create a common language for describing business benefits from IT.

Promote understanding of the potential business benefits from innovation, collaboration, flexibility, and agility enabled through the adoption of digital technologies and approaches.

Optimize the flow of benefits to support the organization‘s strategy

BAR key artifacts

Library of business value indicators

Benefits plan

A business case template

A benefits dependency map

PPM VALUE

helps ensure that the status of project portfolio components (projects, programmes, or sub-portfolios) is closely tracked to support early identification of potential issues and to minimize program delivery conflicts.

BAR Goal

aims to monitor and report on the status of an investment portfolio of IT programs

Project Portfolio Management PPM

Ability to select, approve, and balance project portfolio components (projects, programmes, or sub-portfolios) to deliver the organization’s strategic objectives and its operational needs.

Managing the project portfolio will prioritize, monitor, track, analyse, report, and as necessary, terminate project portfolio components that plan to, or that currently consume organizational resources.

PPM alignment with strategic Objectives

Alignment with strategic objectives

Performing due diligence by ensuring that the organization has a shared understanding of and commitment to the execution of its strategic objectives.

Identifying paths and progression steps for the delivery and execution of the organization’s strategic objectives.

Establishing an agreed quantitative model to assess and provide clarity on the strategic contribution that project portfolio components make to strategic objectives.

Responding to any changes in the organization’s strategic direction.

Assessing and prioritizing programmes and projects based on their alignment with business objectives and operational needs.

PPM Oversight and management

Oversight and management

Managing portfolio risk.

Managing portfolio communications.

Monitoring and tracking of the progress and impact of programmes, within the portfolio.

Reviewing the programmes in the portfolio for adherence to the original business case.

Maintaining an up-to-date portfolio status, including any deviations beyond a defined threshold on progress and expected impact.

PPM Operational

Establishing a governance model that facilitates flexible control and management of the projects’ portfolio.

Prioritizing and authorizing project portfolio components, and establishing a running order in which they are to be executed.

Responding to any positive or negative changes in the expected benefits of the project portfolio components.

Approving and terminating portfolio components in accordance with the governance model and the charters of the specific project portfolio components.

PPM People/leadership/Resource

Identifying and involving key personnel in selecting programmes and projects.

Providing and maintaining leadership and inspiration for the duration of the portfolio which may span multiple years or even decades.

Maintaining oversight of financial, people, and technical resources.

Providing a suite of tools and appropriate infrastructure to support staff to successfully deliver the portfolio’s objectives

PPM key artifacts

Portfolio reporting

Portfolio dashboard

Scenario analysis models

TCO Value

capability analyses the life cycle costs associated with IT assets and IT-enabled business services. It facilitates investment selections, drives service improvements, and helps control costs.

TCO goal

aims to collect, analyze, and disseminate data on all costs associated with an IT asset or IT-enabled business service throughout its life cycle, from initial acquisition, to deployment, operations, and maintenance, to its eventual removal.

Total cost of ownership TCO

Ability to identify, compare, and control all direct and indirect costs associated with IT assets and IT-enabled business services

TCO covers

Identifying and analyzing IT costs across asset and service life cycles, from acquisition to operations, enhancements and end of life

Identifying all costs that both directly and indirectly affect the bottom line – including, for example, hardware and software acquisition, management and support, communications, training, end-user expenses, opportunity costs of downtime and other productivity losses

Establishing a common methodology for comparing costs within and across IT assets, processes and services

TCO key artifacts

Total cost of ownership policy and models

Cost tracking database

Configuration management database (CMDB)

Managing IT like a business (capabilities)

• accounting and allocation

• business planning

• business process and management

• capacity forecasting and planning

• demand and supply management

• enterprise information and management

• governance

• green IT

• leadership

• innovation management

• organizational change management

• organization design and planning

• risk management

• service analytics and intelligence

• sourcing and supplier management

• strategic planning

Accounting and allocation value

capability assigns costs of IT services proportionally and transparently to the users of those services, improving cost awareness and responsible usage behaviours.

Accounting and allocation goal

aims to allocate the consumption of IT services to business units and to calculate the associated costs for chargeback/showback purposes.

Accounting and allocation

Ability to define and manage the policies, processes and tools used for calculating the costs of IT and distributing them across the organization.

Accounting and allocation covers

Establishing policies for measuring the consumption of IT services by business units and for the chargeback/showback of associated IT costs to those units

Managing how the chargeback/showback for IT service consumption is allocated

Influencing the demand for IT services

Accounting and allocation Key artifacts

IT accounting model

Chargeback/showback model

IT services catalog

Business Planning Value

links the IT strategy with operational delivery. It enables the development of multi-year investment roadmaps and plans to ensure that the IT strategy is successfully implemented.

Business Planning Goal

capability aims to link the IT strategy with IT operational planning. It represents the next level in planning detail following on from defining the IT strategy, ensuring that the necessary financial and other resources are allocated for implementation.

Business Planning

Ability to produce an approved document that provides implementable detail for the IT strategy, setting out the IT function’s tactical objectives, the operational services to be provided, and the financial and other resources and constraints that apply in the coming planning period

Business Planning Covers

Allocating responsibility to specific employees for IT business planning

Managing appropriate financial and non-financial resources and their capacities for ongoing IT business planning activities

Specifying the requirements for each activity in the IT business plan

Seeking support of relevant stakeholders for the IT business plan

Reviewing the IT business plan against actual performance

Business Planning key artifacts

IT business plan

Business-as-usual (BAU) commitments database

Comprehensive requirements catalog

Business Process Management Value

helps to make business activity flows more effective, more efficient, and more responsive to evolving business objectives.

Business Process Management goal

capability helps create an understanding of business activity flows so they can be more readily understood and developed, and so that errors can be reduced and risks mitigated.

Business Process Management

Ability to identify, design, document, monitor, optimize, and assist in the execution of both existing and new organizational processes

Business Process Management covers

Implementing process improvement initiatives and driving cultural change for business process improvement

Selecting, developing, and applying methods governance models, technologies, and skills, roles, and communications materials that support the organization’s processes

Developing and applying graphical representations of processes

Adopting technologies that automate and assist with business process management

Business Process Management key artifacts

BPM policy

BPM governance model

BPM technology (suite)

Business process model and notation

Capacity Forecasting and Planning Value

capability anticipates the shifting needs for IT resources so that capacity can be cost-effectively added or reduced in a timely manner to meet changes in demand.

Capacity Forecasting and Planning Goals

capability aims to understand what resources will be required to support IT services based on current and projected organizational demands

Capacity Forecasting and Planning

Ability to model and forecast demand for IT services, infrastructure, facilities and people

Capacity Forecasting and Planning covers

Collecting capacity-related strategic and operational information

Designing and advancing IT capacity forecasting models

Modeling the current and future capacity requirements across all IT resources

Using forecasting models to determine the impact on IT resources of business forecasts

Communicating insights from capacity planning to relevant stakeholders

Capacity Forecasting and Planning key artifacts

IT forecast plan

IT utilization reports

Capacity Management Information Systems (CMIS)

Capacity forecasting models and modeling tools

Demand and Supply Management Value

The Demand and Supply Management (DSM) capability can improve the business value that IT services deliver by reducing or eliminating supply surpluses and missed fulfillment opportunities.

Demand and Supply Management Goals

The Demand and Supply Management (DSM) capability aims to balance the business demand for

IT services and the supply of those services.

Demand and Supply Management

Ability to manage the IT services portfolio in such a way that there is a balance between the demand for and the supply of IT services

Demand and Supply Management Covers

Analyzing and managing current and future demand for IT services

Analyzing and managing the current and future supply of IT services

Proposing response to address gaps between demand and supply

Fostering collaboration between IT and the business to manage the IT services portfolio

Understanding the trade-offs between satisfying demand and the cost of supply

Demand and Supply Management Key artifacts

Demand models

IT services portfolio

IT services catalog

Shared operations catalog (IT & business)

Supply models

Enterprise Information Management Value

The Enterprise Information Management (EIM) capability provides appropriate operational data for business transactions, and consistently enables timely and informed decision making.

Enterprise Information Management Goal

The Enterprise Information Management (EIM) capability ensures that quality data is available to support the business activities of the organization.

Enterprise Information Management

Ability to establish effective systems for gathering, analyzing, distributing, exploiting and disposing of data and information, covering strategic, operational and security aspects of information management for the enterprise

Enterprise Information Management Covers

Establishing an information management strategy, policies, standards and controls

Establishing information governance mechanisms

Performing information valuations

Defining and maintaining master data

Making infrastructure and storage decisions

Managing information quality

Enterprise Information Management Key artifacts

Information management strategy

Information governance policy

Access controls policy

Governance

The Governance (GOV) capability is the ability to evaluate, direct, and monitor the current and future use of an organization’s IT resources in support of strategic objectives.

Governance Goals and Objectives

Establish IT governance as a central component of effective corporate governance and provide appropriate guidance regarding the effective, efficient, and acceptable use of IT.

Establish appropriate IT decision-making bodies and processes, including mechanisms for escalation of IT issues and compliance with obligations.

Establish decision boundaries, decision rights, and decision inputs; and delegate authority and accountability for aspects of IT governance in line with what is appropriate for the organization’s context.

Governance

Improve confidence in, and the agility and transparency of, IT decision-making.

Ensure that distributed IT decisions support the organization’s strategic goals and objectives.

Provide broad oversight on the performance of IT in the organization.

Governance Key artifacts

Documented IT decision-making process

Decision-making responsibility and accountability matrix

Formal charters for governance bodies (IT steering committee or enterprise governance council)

Green IT Value

The Green Information Technology (GIT) capability enables organizations to minimize their impact on the environment by using IT to deliver Triple Bottom Line (TBL) results - environmental (planet), and social (people), and financial (profit).

Green IT Goal

The Green Information Technology (GIT) capability aims to manage IT operations in an environmentally sensitive manner, and to leverage IT to minimize the environmental impact of the wider business activities.

Green IT

Ability to minimize the environmental impact of IT, and to make the best use of technology the minimize the environmental impact across the organization

Green IT Covers

Developing a green IT strategy and aligning it to business requirements

Planning how to meet IT’s environmental sustainability goals

Implementing environmental compliance within IT governance

Providing relevant measurement and reporting

Aligning organizational capabilities, people and culture for ensuring environmentally sustainable computing

Green IT Key Artifacts

Environmental sustainability strategy

Green IT roadmap

Green IT targets