Today we present the third and final installment of Ultra’s IT Governance blog series.
In the first part of the IT governance blog post series, we discussed the many reasons why a manufacturing organization should ensure the effective and efficient use of IT in enabling an organization to achieve its goals.
In Ultra’s second IT governance blog post, we talked about the benefits of good risk management, oversight, and clear communication. These activities not only reduce the potential costs and damage caused by project failures but also establish greater trust, teamwork, and confidence in the project team.
Today, we’ll address key factors to organize and architect an IT Governance initiative.
Making a Business Case
All too often companies embark on million dollar initiatives, such as ERP implementations, without defined accountability, agreed upon ownership, and overall clarity of responsibilities. While change is expected, and often times dictated, the effective management of change is all too often marginalized or even ignored.
When an initiative receives approval for funding Project Teams and Stakeholders are excited to get started and create company-wide newsletters and other announcements. However, they often get so busy with the details of the project that they cannot sustain the communication momentum which results in a diminished level of support and raises questions that affect the overall project success.
There are generally three overall end goals with respect to the architecture of governance:
- Business Alignment & Priority
- Risk Management & Mitigation
- Resource Management
Ensuring that value is obtained from an investment is an essential component of governance. No investment should be undertaken without full knowledge of the expected long-term costs and the anticipated returns.
Expected return should always include stated assumptions and be tied to risk management activities. Ensuring that the right projects are approved drives a need for accurate forecasting of the total cost of ownership (TCO), potential return on investment (ROI) including identified direct and indirect benefits, and an ongoing review of priorities.
Last but not least, is the identification of necessary skills and resources to successfully complete the projects which must also be balanced for workload and availability. Establishing proper tracking mechanisms are also essential to appropriately manage these aspects over time and ensure accountability is maintained.
Key Success Factors
The following illustration lays out a hypothetical Governance structure for an IT Portfolio of projects. This illustrates the cadence of various meetings and the key aspects to each layer of the governance structure.
The next illustration explains the process of the governance review process and highlights the specific activities of each process step.
The Bottom Line
Most IT projects have the goal of driving business process improvements. When the techniques of IT Governance are the priority, there’s a better chance of achieving business improvement goals.
Finally, we leave you with these five key strategies for IT governance success:
- Governance is the overarching element for project success, including ERP selection. It is not to be minimized or treated as a task within a project plan.
- Obtain management buy-in and ownership at all appropriate levels to ensure top priority and alignment of initiatives and projects.
- Recognize that most initiatives require change throughout the organization. Time and attention must be allocated to bring people along.
- Ensure stakeholders and leaders are enabled to motivate and prompt the necessary changes.
- Manage expectations throughout the organization and communicate appropriately.