3.3

Governance, Objectives and Communication

IT should be managed and evaluated the same way as any business unit: IT and Enterprise Development need to have clear, measurable targets that are followed up. Targets are set separately for the entire IT function, each sub-function and organizational unit, as well as for each individual. Targets are based on IT strategy and business objectives. They are prepared by the IT Management Team and approved by the IT Steering Group.

Measuring increases the transparency of operations and provides an incentive to reach targets. IT performance is measured in terms of customer satisfaction, cost-efficiency, and the realization of development targets. Customer satisfaction is usually measured through separate end user and decision-maker surveys. Decision-makers, more than end users, are expected to provide feedback on IT’s capability to provide value to the business.

IT needs to communicate clearly and frequently to interest groups about the achievements and upcoming activities in IT. Creating the Communication Plan and executing the tasks in it falls under the role of the CIO Office. The Communication Plan defines the objectives, target audience, means, schedules, and responsibilities of communication. A Communication Plan ensures that the messages are targeted and timed correctly, and at the same time the needs of different interest groups are taken into account.

Governance, Objectives and Communication (as in Enterprise Development)

Enterprise Development occurs on all levels of an organization, but control and decision-making falls upon the company’s Enterprise Development steering group, called the IT Steering Group in short. The IT Steering Group must be a permanent function alongside the Project Portfolio Steering Group and the Service Portfolio Steering Group. The third steering body reporting to the IT Steering Group is the Change Advisory Board (CAB), which takes care of change management related to existing services. In addition, there should be project and program specific steering groups.

All major business operations must be represented in the IT Steering Group. The executive board member responsible for IT acts as the chairperson of the IT Steering Group. The agenda is prepared by the CIO. The IT Steering Group sets targets and objectives for IT and leads the communication between business and IT.

The IT Steering Group is responsible for review of major initiatives pertaining to Enterprise Development. It also prepares and introduces proposals to the decision-making bodies specified in the company’s corporate governance model. In practical matters, however, the IT Steering Group is the sole decision-making authority.

The Project Portfolio Steering Group is adjacent to IT Steering and is responsible for approval of major development initiatives. The company’s Head of Development acts as the chairperson of the Project Portfolio Steering Group, and the agenda is introduced by the Head of Development Management Office (DMO) or Project Management Office (PMO).

The Service Portfolio Steering Group is responsible for service continuity, performance management and continual service improvement based on business needs. The chairperson of the Service Portfolio Steering Group should be business representative, and the agenda is set by the Head of Services.

ED_IT_Governance_Model_v2

Figure 2.3.1 IT Governance Model.

IT Steering Group

The IT Steering Group is the highest IT decision-making body. It is responsible for approvals of strategy, architecture, annual action plans and other guiding principles. It also approves changes to the IT operating model and organizational structure. The IT Steering Group is chaired by a person who is responsible for IT in the executive board, and the IT Steering Group should have representatives from all major business units and/or functions. The IT Steering Group is supported by the IT Management Team that is responsible for preparing the topics approved by the IT Steering Group. The IT Management Team comprises the heads of the IT function and is chaired by the CIO.

Project Portfolio Steering Group

The Project Portfolio Steering Group commissions projects and directs them throughout their lifecycle, including Business Benefits Realization. It reviews the business alignment of the portfolio, decides the prioritization of initiatives, and resolves conflicts of interest in resource allocation. It follows up on the status of projects and approves or rejects project continuation at portfolio gate reviews. The Project Portfolio Steering Group is supported by a DMO/PMO that maintains an up-to-date project portfolio dashboard with visibility on the scope, schedule and cost status of each project.

Project Steering Groups (NEW)

The Project Steering Group is responsible for the follow-up and guidance of a single project. It is authorized to make project-related decisions to the criteria defined in the Business Case (including, for example, scope, schedule and budget).

The Project Steering Group is chaired by the nominated Project Owner and the agenda is prepared by the Project Manager. The Project Steering Group is established at project initiation phase and exists until project closing. The Steering Group should have representatives from all major stakeholder groups. The Project Steering Group reports to the Project Portfolio Steering Group.

Service Portfolio Steering Group

The Service Portfolio Steering Group governs service development and the service lifecycle model. It reviews, approves or rejects initiatives for the development of new services or significant updates to existing services. The Steering Group ensures that

  • services have a good business fit and are aligned with IT strategy
  • performance of services is at the target level
  • new services are developed efficiently and
  • resources and costs are optimized.

The Chairperson of Service Portfolio Steering should be a business executive who has a big interest of ensuring service performance and business value.

Change Advisory Board (CAB)

The Change Advisory Board (CAB) is responsible for approving or rejecting requested changes to services. It is responsible for ensuring that operational quality is not compromised by changes that are loosely planned, poorly implemented or inadequately tested. The CAB is responsible for governing changes to existing services, while the Development Management Office is responsible for development initiatives delivered as releases and projects. The Change Advisory Board is chaired by a Change Manager and the members of the board are Key Users (representing business) and Service Owners.

Service and Vendor Steering Groups

The Service Steering Group represent the tactical level service and vendor management and is chaired by Service Manager. The steering group have representatives from the business (key user) and from the vendor organization (Delivery Service Manager). The Vendor Steering Groups represent the strategic level of vendor management and should be focused on the development of services to better fit business objectives and needs. The Vendor Steering Group is chaired by Service Owner or by Head of Sourcing if the vendor’s service scope is very large and covers several service owners.

ED_IT_Management_System

Figure 2.3.2 An IT management system communicates the essence of IT to Business Management.

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