In a recent post we addressed the key issue of IT governance. As we noted, IT governance is made up of the overarching processes that ensure successful implementations as well as effective and efficient ongoing use of IT in enabling an organization to achieve its goals.
This concept covers much more than simply selecting and implementing software.
The Scope of IT Governance
Governance covers the culture, organization, policies and practices that provide oversight and transparency the portfolio of major initiatives.
As ERP consultants, we make it a priority to keep this focus top of mind. When we work with our mid-market manufacturing clients, we see the wisdom in applying appropriate control across five key areas:
- Alignment – Provides a strategic linkage of the initiative to the business priorities and objectives.
- Value Delivery – Confirms that the business value in terms of ROI and Total Cost of Ownership (TCO) is defined and establishes accountability for the ultimate realization of that return long-term.
- Risk Management – Ensures that processes are in place to identify and mitigate risks with appropriate escalation channels.
- Resource Management – Establishes direction and expectations along with clearly defined roles and responsibilities for the team members and includes third party sourcing requirements with quantified additional supporting resources as necessary.
- Performance Measurement – Tracks the progress of the project delivery to maintain accountability and expectations but also substantiates the value added operational performance long term.
Not a One-Time Effort
Governance is not a one-time exercise that kicks in during an ERP selection project. Nor is it achieved by a mandate or setting of rules. It requires a commitment from the top of the organization to instill a better way of dealing with the management and control of all projects and their respective sustainable operational performance once put into place.
Governance is an ongoing activity that requires a continuous improvement mentality and responsiveness to changing business needs.
Why undergo such a lengthy and complex effort? IT Governance delivers strategic business benefits in a range of areas. Those benefits include:
Transparency, Clarity, and Accountability
- Improved transparency of costs
- Improved clarity of process and priority
- Defined roles, responsibility and accountability
Return on Investment and Stakeholder Value
- Improved understanding of overall cost drivers and ROI factors
- Visibility to risks, issues, and long term TCO
- Improved buy-in and support for stakeholder returns
Consistency, Collaboration, and Communication
- Facilitated sponsorship
- Positioning organizations and stakeholders as business partners
- Facilitate collaboration across functional organizations, regions/locations, and individuals to leverage the best use of talent and perspective
- Achieves a consistent and managed approach to taking risks and resolving issues
- Identifies opportunity areas for improvement
- Drives aggressive and achievable performance targets and accountability metrics
- Process visibility, metrics, and ownership leads to best practice
We live this approach here at Ultra. It’s worth noting that Ultra employs the philosophy of business process improvement in every engagement – and uses the discipline of IT Governance to help our clients achieve stellar business results.
Stay tuned for the final part of our IT Governance blog series, where we’ll address key factors to organize and architect an IT Governance initiative.