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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
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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.
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3 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.
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
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4 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.
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
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5 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.
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
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6 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.
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.
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7 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.
Business Outcome Metrics are Highlighted in Gartner’s Business Value Model
7
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8 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.
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.
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9 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.
Use Portfolio Views to Help Decision Makers Analyze Investment Patterns and Options
Tool: Sample portfolio views
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10 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.
Integrate Permanent and Project Governance: Estee Lauder Case Example
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11 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.
Consistently Report Results Using a Business Benefits Scorecard
Tool: Sample business benefits scorecard
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12 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.
Develop a Standard Project Investment Dashboard With Business Outcome Metrics
Tool: Project investment dashboard
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13 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.
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
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14 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.
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
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15 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.
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.
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16 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.
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?
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17 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.
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
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18 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.
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.
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19 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.
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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21 CONFIDENTIAL AND PROPRIETARY I © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.
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