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mIM/IT Governance and Portfolio ManagementPresented to: Open Group EA Conference BrusselsDate: 21st of April, 2004Prepared by:Robert (Bob) Weisman, Partner and Executive Consultant, EA Leader, CGIContact: robert.weisman@cgi.com or (613)566-46891

Issues at Hand Why IT Governance ? What is IT Governance ? Linkage IT Governance and Portfolio Management Linkage Portfolio Management/Governance and EA Project Generation Paradigm Concluding Comments CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGI2

Why IT Governance ? High IT Project Failure Rate ROI on IT Auditors Analyst Premium IT is key government and corporate enabler Sarbanes Oxley Demographics Technology chasing perception CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGI3

About One-Third of IT SpendingImproves Business Performance (Gartner)Contribution to Improved Enterprise PerformanceIS ImpactBusiness Impact68%32%HighMedBusinessAlignment &BusinessValueLowInfo SystemsValue(IT cost only)Infrastructure47%Utility21%Enhance- Frontierment11%21%Applications 53%Typical Portfolio of IT InvestmentsShare of Total IT Spending(Courtesy Gartner Group Dec 2003) CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGI4

What is IT Governance ? Integral part of enterprise governance Directors and executive management Leadership, organizational structures and processes Accountability, Responsibilities and Authority Ensure IT alignment CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGI5

IT Governance ProcessesHowProvide DirectionSet ObjectivesIT ActivitiesCompareMeasurePerformance CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGI6

Summary of Governance Best PracticesIT Governance and Portfolio Management 1- Adopt a Project Portfolio Approach to ITGovernance 2- Develop a Tracking System 3- Review Projects 4- Establish Review Levels 5- Culture of Ownership 6– Clear IT Governance “process” is established Clear 7accountability, responsibility and authority- Adherence to Process CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGI7

Enterprise Architecture (EA)and Portfolio Management Process of Management sterile in absence of context Need for Context Skyscraper has an overall plan Not designed and built one room at a time no matter how wellmanagedActually skyscrapers are partially built one room at atime EA provides the basic floor plan and utilities lay-out Provides basis for “out of context” design and planningIn IT Enterprise Architecture provides context Different levels of abstraction CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGI8

The Zachman Framework – An EA ModelWhatDataHow Where Who WhenProcess Network l ofBusiness (CxO)Business ArchitectureDescription of IS(Designer)Business and Technical Architecture TransitionTechnology Model(Architect)Detailed Description(Builder)Technology ArchitectureImplementation(Maintainer) CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGI9

IT Governance – Managing the MigrationTo a New Enterprise Architecture using Plan AndIM/IT PortfolioIM/IT Architecture(Existing) CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGIBusinessArchitecture(Future)IM/IT Architecture(Target)10

EA Enables Strategic Project GenerationEA enables proactiveStrategic Project GenerationTactical ProjectGenerationStrategicBusiness NeedsStrategicEnterprise Tech ArchStrategicIT ProjectTacticalIT ProjectTacticalIT ProjectTacticalIT NeedTacticalIT NeedTacticalBusiness NeedTacticalBusiness Need CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGI11

EA in Governance Ensures Strategic Fit CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGI12

IT Governance Who Board Board of Directors IM/IT Strategy CommitteeExecutive Management – CEO Project Portfolio Management Board for all projects Chaired by CEO Heads of the lines of business including CIOCommittees – CIO IT Steering Committee – Chaired by CIO – All ITProjects Technology Council - Impact IT Arch Review Board – Standards/Conformance CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGIIM/IT InformationManagementAdvisoryCommittee(IMAC)13

Assessing the Projects - Metrics Principles CIO IM/IT Metrics CEO Strategic Metrics Applying the Metrics CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGI14

Principles – The Initial Hurdle(A Real World Example using TOGAF)Business Primacy of the principles Maximize the benefits Information management is everybody’s business Business continuity Compliance Adherence to FrameworksData Common Use IM/IT ResourcesApplication Data is an asset Interoperability Adherence to XYZ application Adherence to XYZ dataarchitecturearchitecture Ease of use Data quality trustee Common vocabulary and datadefinitions Data securityXYZIM/ITPrinciplesTechnology Business requirements-based change Responsive change management Adherence to XYZ technology architecture CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGI15

PrinciplesThe Project Charter’s First Hurdle Data Is an Asset Is Data being managed as a business asset ? Adherence to XYZ Data Architecture Does the project fit into the XYZ Data Arch? Data Quality Trustee Does the project manage data quality? Common Vocabulary and Data Definitions Will the project re-use corporate data standards? Data Security Does the project cater to security concerns/policy? CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGIaaaaa16

Principles – The Underlying Assumptions Existenceof a Integrated Business Plan BusinessParticipation and Ownership Existenceof IM/IT Architectures Data Application Technology Existenceof Higher Level Governance CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGI17

Performance Metrics/Assessment CriteriaA CIO Perspective IM/ITValue IM/IT Fit IM/IT Risk CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGI18

IM/IT Value Metrics – CIO View GreaterCustomer Satisfaction ReducedCosts IncreasedCapability: Stability & Reliability IncreasedCapability: Compliance IncreasedCapability: Security CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGI19

IM/IT Fit Metrics – CIO View CurrentBusiness Environment Business Currentready ?Technical Environment Theability of the project to enhance the currentenvironment. FutureTechnical Environment Thecontribution of the project to the future (target)environment. CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGI20

IM/IT Risk Metrics – CIO View Implementation Risk:More expensive than planned ImplementationRisk:Longer than planned OperationalRisk:Project Will Not Complete CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGI21

Strategic Metrics – A CEO Perspective IM/ITValue IM/IT Fit IM/IT Risk CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGI22

Strategic Value – CEO Perspective Return on Investment from more ‘macro’ perspective.Clearly define the dimension of ROI for theenvironment. (e.g. cash, person-days, speed of delivery, ) CEOs assign broad values (low, medium or high) Short Term: Return likely to be low, medium or high? Long Term: may be no short-term benefit CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGI23

Strategic Fit – CEO Perspective Strategicfit versus technical fitCEO seeks fit into the agency’s businessstrategy. CEO may modify CIO’s rating to reflectproject’s longer-term fit with the corporatestrategic direction CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGI24

Strategic Risk – CEO Perspective Riskis rated from a ‘macro’ perspective Riskis essential to remain competitive, just has to bemanaged CEOregards risk from two perspectives: EconomicRisk if corporate environment changes OrganizationalRisk if corporate organizationalchanges are pending CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGI25

Applying the Metrics Project Assessment Sheet CIO Perspective CEO Perspective Value – Risk Quadrant PPMB Using Value-Risk Generalized cases Considering Project Status CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGI26

Project Review – CIO Perspective(Actual Case Study)Project Name:CriteriaIM/IT ValueDescriptionReduced costsValueScoreWeight10.1* Stability/Reliability10.1* Compliance10.05* Security10.05Greater Customersatisfaction10.1Current TechnicalEnvironment10.15Future TechnicalEnvironment10.0510.110.110.2Wt ScoreIncreased Capability:IM/IT FitIM/IT RiskImplementation Risk:* More expensivethan planned* Longer thanplannedOperational Risk(will not complete)Total:1.0Project Score (Value Fit – Risk): CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGI27

Project Review – The CEO PerspectiveProject Name:CriteriaIM/IT ValueDescriptionReduced costsValueScoreWeight10.1Stability lity:IM/IT FitIM/IT RiskProject bProject Score:ImplementationRisk:More expensivethan planned10.1Longer thanplanned10.1OperationalRisk (will notcomplete)10.2Total:1.0Project Score (Value Fit – Risk): CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGIAdd:Strategic FitEconomic ValueOrganizational Risk28

Projects in a Portfolio9High ValueLow RiskValue9High ValueHigh Riskx9Low ValueLow RiskLow ValueHigh RiskRisk CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGI29

Project Portfolio - UtilityProjectAProjectCProject BProject DValueProject EProjectFProject GProject HOn targetAt RiskRisk CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGIIn Trouble30

Example of Tools Available(Courtesy Gartner) CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGI31

Portfolio Management Tools – 2(Courtesy Gartner) CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGI32

Implement an IT GovernanceImplementation Plan Steps Set up a governance organizational framework; Align IT strategy with business goals, Understand and define risks, Define target areas, Analyze current capability and identify gaps; Define implementation strategies/activities Define implementation projects Measure results and repeatTo assist in IT assessment, gap analysis andperformance management Control Objectives for Information and related Technology (CobiT) US FEAF Performance Reference Model CGI 2004 Subsequent disclosure of material contained within this presentatin requires express permission from CGI33