IT Governance & Quality Management Lekture 1 Introduction 25/03/2017 IT-University of Copenhagen

IT-University of Copenhagen Learning opjective After the course the student should be able to: • Describe IT governance control structures and mechanisms in a company • Describe quality management structures and mechanisms in a company • Explain the value of IT governance and quality management • Describe industry standards for IT process models (e.g. CoBIT and ITIL) and development and test of IT systems (e.g. Agile, V-model) • Analyze the contents of quality related standards and compliance requirements. Reflect on the significance of quality standards and compliance requirements. • Recommend an IT governance setup for a given situation • Recommend an quality management approach in a given situation  25/03/2017 IT-University of Copenhagen 2

IT-Governance in a context Six key assets Human Financial Physical Intellectual property IT Relationships Ross & Weill Componets 25/03/2017 IT-University of Copenhagen

IT-Governance in a context 5 Key assets People, Portfolios and Processes: The 3P Model of IT Governance  http://www.isaca.org/Journal/Past-Issues/2008/Volume-2/Pages/People-Portfolios-and-Processes-The-3P-Model-of-IT-Governance1.aspx 25/03/2017 IT-University of Copenhagen

One definition of IT architecture ” The fundamental organization of a system represented by its components, their relationships to each other and to the environment, and the principles that govern the system design and development. " ANSI/IEEE Std 1471-2000 superseded by ISO/IEC/IEEE 42010:2011, Systems and software engineering — Architecture description. 25/03/2017 IT-University of Copenhagen

IT-University of Copenhagen Strategy IT Business In reality, e-government is a somewhat strange animal … We need to find ways to ride this animal. EA is seen as a way to go ahead 25/03/2017 IT-University of Copenhagen 6 6

In conclusion Conant-Ashby Theorem ”every good regulator of a system has to have a model of that system” Our ability to control a system depends on understanding that system This means that we need to understand all facets of The systems - not only the technical 25/03/2017

“Now! …. That should clear up a few things around here!” 25/03/2017 IT-University of Copenhagen 8

IT-University of Copenhagen What is IT-Governance For who by who The Goals of IT-Governance The importens of IT-Governance 25/03/2017 IT-University of Copenhagen

IT-University of Copenhagen What is IT-Governance Information technology governance is a subset discipline of corporate governance focused on information technology (IT) systems and their performance and risk management. The rising interest in IT governance is partly due to compliance initiatives, for instance Sarbanes-Oxley in the USA and Basel II in Europe, but more so because of the need for greater accountability for decision-making around the use of IT in the best interest of all stakeholders. 25/03/2017 IT-University of Copenhagen

IT-University of Copenhagen Definitions Specifying the decision rights and accountability framework to encourage desirable behavior in the use of IT.“ Weill and Ross "… the leadership and organizational structures and processes that ensure that the organization's IT sustains and extends the organization's strategies and objectives.” The IT Governance Institute "an integral part of corporate governance and addresses the definition and implementation of processes, structures and relational mechanisms in the organization that enable both business and IT people to execute their responsibilities in support of business/IT alignment and the creation of business value from IT enabled investments". Van Grembergen and De Haes (2009) "The system by which the current and future use of ICT is directed and controlled. It involves evaluating and directing the plans for the use of ICT to support the organization and monitoring this use to achieve plans. It includes the strategy and policies for using ICT within an organization.” the Australian Standard for Corporate Governance of Information and Communication Technology 25/03/2017 IT-University of Copenhagen

Key Players Involved with IT Governance IT governance occurs at different layers. Project Managers and Team leaders report to and receive direction from their managers; managers’ report up to the CIO’s; and the CIO’s report to executives, who report to the board of directors. Reporting includes descriptions of any activities that show signs of deviating from targeted objectives. Each level, when reporting these deviations, includes recommendations for action that must be endorsed by the governing bodies above. Stakeholders play a part in IT governance. At the heart of the governance responsibilities of setting strategy, managing risks, allocating resources, delivering value and measuring performance, are the stakeholder values, which drive the enterprise and IT strategy. Sustaining the current business and growing into new business models are certainly stakeholder expectations and are achieved with adequate governance of the IT infrastructure. 25/03/2017 IT-University of Copenhagen

The goals of IT-Governance The primary goals for information technology governance are to (1) assure that the investments in IT generate business value, and (2) mitigate the risks that are associated with IT. This can be done by implementing an organizational structure with well-defined roles for the responsibility of information, business processes, applications, ICT infrastructure, etc. Accountability is the key concern of IT governance. 25/03/2017 IT-University of Copenhagen

IT University of Copenhagen Desirable behaviors Embody the: Beliefs Culture Defined and enacted though: Strategy Corporate value statements Mission statements Business principles Rituals structures Det er mennesker der driver værket. Der er nogen der tror at det er strategy der driver værket men 3/25/2017 IT University of Copenhagen 14 14

Mechanisms for governance of the key assets Structures Processes Committee Procedures audits And more These key assets need mechanisms to be governed and used and it is the senior executive teams’ task. Many of these mechanisms are possible to use within several of the assets but within some of the areas it is necessary to have unique mechanisms. 3/25/2017 IT University of Copenhagen 15 15

IT Governance Effective IT governance must address three questions: What decisions must be made to ensure effective management of IT? Who should make these decisions? How will these decisions be made and monitored? But before that - Why A common answer to the second question “what”, is that IT Governance is the aligning of corporate and IT strategy. This is true but it is more complex than that. The third question “how” is even more difficult to answer than the “what” question. Among other things it has to ensure that IT Governance does not turn into IT segregation. Tools like portfolio management, risk management, balanced scorecard and change management could be used. Finally the “when” questions answer should be now! (Butler Group, 2003) 3/25/2017 IT University of Copenhagen 16 16

Why is IT Governance important? New information technologies bombard enterprises with new business opportunities IT is Pervasive IT is Expensive Looking ahead, the influence of IT on enterprise performance will continue to grow Leading Enterprises Govern IT differently - Find the right balance Senior Management has limited bandwidth 2 Ting: Hvis virksonheder skulle reagere på alle tendenser, skulle de skifte deres infrastructur hver dag  De bliver nød til at kunne beregne Cost/benefits. De skal være fleksible 3/25/2017 IT University of Copenhagen 17 17

Why is IT-Governance important? "IT-Governance is the most important factor in generating business value from IT” “IT-Governance can actually deliver on the longtime management paradox of encouraging and leveraging the ingenuity of all the enterprises people while ensuring compliance with the overall vision and principles” 3/25/2017 IT University of Copenhagen 18 18

Framework for the key IT Governance decisions Forklar at principper er styrende, men at der godt kan bubble behov/ønsker op fra business, der skaber behov/ønsker om ny it frastrukture. Der igen skaber bevægelse I de andre felter. 3/25/2017 IT University of Copenhagen 19 19

IT University of Copenhagen 3/25/2017 IT University of Copenhagen 20

Four IT Architecture Stages

Define Your Operating Model