Info-Tech Research Group1 Improve Value & Mitigate Risk through IT Governance Take the guesswork out of IT decision-making.

Info-Tech Research Group2 Almost 75% of IT leaders say they’ve improved or implemented IT governance in the last two years, and 66% say there’s still more work to do.* Effective decision-making is critical to the governance of IT investments, projects, service delivery, and risk, all of which keep the business in business. Introduction IT leaders in small to large organizations who are experiencing the following symptoms: Failing audit grades. Loss of control of IT services to external providers. Lack of standards and defined processes for decision-making. Misaligned IT investment and business priorities resulting in failed projects. IT has little influence over executives and must lead change through process improvement. Design improvements and governance structures for four key process areas (Investment, Project, Risk, and Service Delivery Management) that will actually improve IT’s value delivery. Create the artifacts needed to support the structures (committee mandates, recommended reporting, roles and responsibilities, etc.). Create the roadmap to improve IT governance structures and processes. This Research Is Designed For:This Research Will Help You: *Source: Info-Tech, N=111 N=100

Info-Tech Research Group3 Executive Summary The Finding Today, businesses are 100% reliant on information technology for day-to-day operations, yet fewer than 50% of organizations involve senior management in IT decisions. There are four key areas where senior management must play an active role:  Making IT investment decisions.  Prioritizing and approving projects.  Evaluating IT service delivery.  Mitigating risks and vulnerabilities to IT assets. The Solution Gain the commitment of senior management to IT governance by:  Making the Case: Clearly describe the importance of senior management involvement in these key decisions.  Making Governance Easy & Impactful: Design simple, repeatable processes that respect competing demands on management time and that reach closure on key decisions. Identify current governance structures for the four process areas. Highlight gaps that exist between how IT decisions are made now and how they should be made. Create a roadmap to make the process improvements that will improve governance and provide better alignment with business goals and better IT value delivery. N=95

Info-Tech Research Group4 What’s in this Section:Sections: Effective IT Governance is worth the time & effort The Case for Good Governance Setting the Stage Governing Risk Management Governing Investment Management Governing Project Management Governing Service Delivery Management What is IT Governance? Symptoms of poor or non-existent governance Case for good governance How to establish effective governance

Info-Tech Research Group5 Organizations make many common mistakes because of deeply held beliefs about IT governance Can you relate to any of these statements about governance in your organization? IT doesn’t understand what services the business needs or what the business is prepared to invest in those services. IT is always working on poorly specified, ad-hoc, or “I want” projects that are dollar, time, and resource wasters. The business doesn’t know how IT dollars are spent. IT projects deliver the wrong functionality, do not improve business effectiveness, or impede business productivity. IT initiatives do not help the business achieve its objectives. IT initiatives are undertaken without adequate assessment of the level of IT risk involved. The guiding principle behind IT Governance is that IT must be informed and driven by business management decision-making for IT spending, services, projects, and risk. This provides the necessary link between IT investment and business goals and strategy. If so, it’s time to change the way the organization thinks.

Info-Tech Research Group6 IT governance aims to ensure expectations are met, risks and resources are managed, and performance is measured According to the IT Governance Institute, the purpose of IT governance is to direct IT endeavors to ensure that IT's performance meets the following objectives: o For IT to be aligned with the enterprise and realize the promised benefits. o For IT to enable the enterprise by exploiting opportunities and maximizing benefits. o For IT resources to be used responsibly. o For IT-related risks to be managed appropriately. IT governance is an integral part of enterprise governance and consists of leadership and organizational structures and processes that ensure IT sustains and extends the organization's strategies and objectives. The overall objectives of IT governance activities are to understand the issues and the strategic importance of IT, to ensure that the enterprise can sustain operations, and to ascertain that it can implement the strategies required to extend its activities into the future. The Process of IT Governance The IT governance process begins with setting objectives for the enterprise’s IT department, providing the initial direction. From then on, a continuous loop is established: performance is measured and compared to objectives, resulting in the redirection of activities and change of objectives where appropriate. Source: IT Governance Institute,

Info-Tech Research Group7 The negative impacts of ineffective governance in the organization are substantial The costs of poor governance can vary greatly but often go unnoticed. Watch out for the following direct and indirect costs:  Failed or delayed IT projects  Lost revenue  Extra time spent gathering business requirements  Higher-than-average help desk costs  Security breaches/non-compliance fines Direct costs of poor governance: Indirect costs of poor governance:  Retraining IT staff  Loss of business credibility  Failed audits  Lost productivity  Poorly operating systems It is important to incorporate cost, desired benefits, and performance tracking of IT Governance from inception to demonstrate the value of sometimes unpopular governance arrangements. Source: IT Governance in Practice – Insights from Leading CEOs It is important to incorporate cost, desired benefits, and performance tracking of IT Governance from inception to demonstrate the value of sometimes unpopular governance arrangements. Source: IT Governance in Practice – Insights from Leading CEOs

Info-Tech Research Group8 How governance affects the bottom line is the primary concern of senior business management, yet they won’t participate If an initiative takes time away from revenue-generating activities, management won’t participate. IT must communicate potential quantitative benefits to gain management involvement. Enhanced ability to align all costs to business value. Alignment of non-discretionary budgets to support the bottom line. Increased top-line or balanced costs using the discretionary budget. Optimized measurement of how IT spending impacts the balance sheet. Reduction in IT costs. Improved demand management (resulting in cost savings within IT plus benefit for the organization). Increased top management and CIO collaboration. Higher overall and IT-specific productivity. Higher perceived value from IT. Much higher likelihood for the IT spend to be perceived as “right.” Effective IT governance provides the following quantitative benefits: Source: IT Governance in Practice – Insights from Leading CEOs “Understand the effort and timeline involved before you begin: Only a portion of the target benefits [will materialize] in the short- term...Large-scale standardization projects typically only deliver their benefits over a period of several years. Keep key players in the loop to level- set expectations across the board.”

Info-Tech Research Group9 Effective IT governance provides significant qualitative benefits in the long run While significant quantitative benefits can be realized, only a small minority (16%) of implementers were able to provide hard figures* for their initiative. This is likely due to lack of planned tracking and defined quantitative goals. In situations like this, qualitative benefits take center stage. Staffing: IT managers can set appropriate staffing levels based on what the business needs. Clarity: IT initiatives are clearly tied to what the business wants and is willing to pay for. Control: IT investment is allocated based on business priority, not IT guesswork. Strategy Alignment: Business-driven decisions mean tighter linkage between IT and business strategy. Collaboration: Silos between business units, including IT, are broken down as management works together. Support: Increased senior management involvement. Decision-Making: Facilitates joint accountability between the business and IT for decisions regarding IT investment. Compliance: Risks are understood and accepted or mitigated based on organizational tolerances. Transparency: Provides senior management with visibility into overall IT efforts. * Source: IT Governance in Practice – Insights from Leading CEOs Effective IT governance results in qualitative benefits for:

Info-Tech Research Group10 IT Governance can’t be done by IT alone – key business stakeholders must be actively involved Governance processes must reflect the goals of the leadership team and have its support in order to be successful. Effective IT governance occurs at many different organizational layers, and includes responsibilities and accountabilities for the following key players:* Team leaders: Report to and receive direction from their managers Managers: Report up to the executives The Executives: Report to the board of directors The Board of Directors: Meet and make key decisions Stakeholders: Expect the sustainment of current business as well as growth into new business models, and in turn, drive enterprise and IT strategy. IT governance is about setting up accountability and responsibility. Source: IT Governance in Practice – Insights from Leading CEOs *Source: IT Governance Institute, In most organizations, decisions are made without considering other decisions, they’re made by the wrong people, and no one is held accountable for the results. Effective governance puts the structures, connections, and accountabilities in place to ensure that the right decisions are made by the right people and for the right reasons. (Source: IT Governance in Practice – Insights from Leading CEOs) Info-Tech Insight

Info-Tech Research Group11 The most important ingredient for effective IT Governance is senior business management involvement On average, only 38% of senior managers in poorly governed firms understand how technology is governed.* The top three symptoms of poor governance all reflect a lack of business involvement in IT decision- making: 72% Insufficient IT Resources Planned 69% Misalignment Between Business/IT Strategy 69% Business Unaware of Services IT Provides Source: Info-Tech Research Group N=93 The top three symptoms of poor governance all reflect a lack of business involvement in IT decision- making: 72% Insufficient IT Resources Planned 69% Misalignment Between Business/IT Strategy 69% Business Unaware of Services IT Provides Source: Info-Tech Research Group N=93 * Source: IT Governance in Practice – Insights from Leading CEOs This is a shame, as “[effective] IT Governance is driven by top management and is often associated with…CIOs who have the full support of executive management.” – IT Governance in Practice Elements of IT Governance in Order of Importance Respondents were asked to rank the elements of IT governance in order of their importance to IT governance success.

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