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Governance Best Practices for Midmarket CIOs & IT Leaders

Heather ColellaResearch VP for Gartner’s Office of the CIO

10 years at Gartner, 35years Industry experience

For a broader insight into Gartner you can find us: @Gartner_inc on Twitter and Gartner on LinkedIn.

@HeatherColella

https://www.linkedin.com/in/heathercolella

https://twitter.com/Gartner_inc

https://www.linkedin.com/company/2078

https://twitter.com/HeatherColella






#GartnerSYM

2 CONFIDENTIAL AND PROPRIETARY | © 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner and ITxpo are registered trademarks of Gartner, Inc. or it's affiliates.

Governance Defined

The decision framework and process by

which enterprises make investment

decisions and drive business value.

#GartnerSYM


The basics of corporate governance is about risk management

Financial Approach

Audit Process and

Investment Review

Enterprise Information and Privacy

Regulatory Compliance

and Data Governance

Workforce Management

Knowledge Management,

Skills and Succession

Operational Excellence

Business Process

Improvement and Maturity

#GartnerSYM


Real power comes when competitive advantage is the intent of governance

Deliver Competitive Advantage

Assess

Business

Opportunities

Leverage

Emerging

Technologies

Manage

an Innovation

Process

Take

Calculated

Risks

#GartnerSYM


The Basic Governance Structure

Board of Directors

Senior Executive

Team

Project Governance

Enhancement Committee

Corporate Governance

Growth / Transformation

Decisions

Manage the Enhancement

Portfolio

Deliver growth and

transformation as envisioned

#GartnerSYM


Midmarket variations on governance structures

Flatter structure. In smaller companies all decisions—investment, project

and enhancement—are likely to be made at the senior executive level

Less executive team involvement. In many small to midmarket companies

the CIO is asked/entrusted to make IT investment decisions for the

enterprise

Unclear definitions. Distinction between “new investment” and

“enhancements” are not clearly defined. “Grow/Transform” are consolidated

into a single category, “Run” remains its own category

The future is bright. Boards of directors are investment more time on strategy and

governance and want to devote even more time in the future.

#GartnerSYM


Business Outcome Metrics are Highlighted in Gartner’s Business Value Model

7

#GartnerSYM


Integrate Key Components of the Process

Standardize Project Investment Dashboard

• Categorize each potential project

investment based on business outcomes.

Create Portfolio Views

• Create portfolio views and

options using business

outcomes.

Deliver Business Scorecard

• Track milestones and report

business results based on business

outcomes.

Integrating the three key components of the investment process

Use the same business outcome metrics at each stage in the process to ensure decision-making

consistency and clear communications.

#GartnerSYM


Use Portfolio Views to Help Decision Makers Analyze Investment Patterns and Options

Tool: Sample portfolio views

#GartnerSYM


Integrate Permanent and Project Governance: Estee Lauder Case Example

#GartnerSYM


Consistently Report Results Using a Business Benefits Scorecard

Tool: Sample business benefits scorecard

#GartnerSYM


Develop a Standard Project Investment Dashboard With Business Outcome Metrics

Tool: Project investment dashboard

#GartnerSYM


Develop a Charter to Define Create the Bounds of Governance

• Decision making or advisory body?

• Expected business performance outcomes (cost reduction, risk management and growth targets)?

• Type: permanent, temporary or project/goal-specific?

• Revision of charter schedule? Exception process?

Group Purpose

• Chair of the group?

• Positions of voting members?

• Positions of nonvoting members?

• Roles of specific members (business process, industry, technology, legal or financial expertise)?

Group Membership

• Funding sources and financial authority?

• Guiding principles and policy scope?

• Audit responsibilities or accountabilities?

• Portfolio of assets or investments responsibility?

• Scope of approvals or advice?

• Responsibility for minutes and communications?

• Subcommittees and relationship to other governance bodies?

Roles and Responsibilities

#GartnerSYM


Changes to

Business Model

New Ideas

Business Shifts

Create an Exception Process to Capture Innovation and Help Adapt Governance

Determine

ROI

Assess

Impact

Determine

Portfolio

Position

Decide

#GartnerSYM


Use Principles to Guide and Shape Investment Decisions

Enterprise Strategic Success Driver IT Principles

Sampension Agility in the face of regulatory change

[We] can disengage from any vendor within two to three years.

Helphire Excellence in absorption-style acquisitions

The enterprise architecture must be able to grow on demand, possibly in large steps.

TravelCo Growth through cross-sales where business units don't like to collaborate

Everything is decentralized until we agree it is a commodity.

Tesco Operational excellence We will converge to a single operating model.

DFID Need to support extremely remote sites

All DFID systems used overseas must deliver acceptable performance over satellite connections.

#GartnerSYM


Regularly Assess the Effectiveness of Your Governance Process

• Talk to key stakeholders first and then the governance committee to determine where the problem might lie

• Refine the charter to ensure the scope and authority of the committee are appropriately defined

• Refine business case criteria

Are the Best Investment Decisions

Being Made?

• Create a communications plan

• Target to key stakeholders

• Deliver consistent messages to the organization

Does the Organization

Know the Decisions?

• Measure benefits

• Refine measures and business case criteria as required

• Communicate results to the enterprise

Are Expected Results Being

Achieved?

#GartnerSYM


Core Governance Tools

Governance charter

Agreed to business case criteria that include strategic value and are used to

compare all investment proposals in the same way

Insight into the resources required to deliver initiatives

Reporting views: One-page strategy or business capability map, project

investment dashboard, implementation road map, benefits realization

scorecard

Communication plan to deliver consistent messages to the enterprise

An exceptions process

#GartnerSYM


Recommendations

Less is more with governance, design the least amount of governance required to make effective decisions.

Imperfection is perfect — start with "good enough" tools and use them to facilitate the conversation. Governance in action.

Constantly review governance processes and outcomes and streamline regularly.

Great governance is about agility and competitive advantage. Develop an approach and tools that focuses on the outcomes your enterprise needs to compete.

#GartnerSYM


Related Gartner Research

Creating a Governance Approach for Supply Chain

Ken Chadwick, Debra Hofman, Dana Stiffler and Jennifer Loveland (G00291884)

Practical Governance

Tina Nunno, Cathleen Blanton and Heather Colella (G00209451)

The Gartner Business Value Model: A Framework for Measuring Business

Performance Michael Smith and Paul Proctor (G00249947)

Toolkit: Governance Charter

Heather Colella (G00245867)

Optimize IT Investing With an All-Purpose Governance Portfolio

Tina Nunno and Heather Colella (G00245867)

20 CONFIDENTIAL AND PROPRIETARY I © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.

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