Measuring the Unmeasurable: Governance & Management of Information Technology

©2010 Infonomics Pty Ltd Governance & Management of IT 21 April 2023

Measuring the Unmeasurable:Governance & Management of

Information Technology

Mark ToomeyAuthor: Waltzing with the Elephant

Managing Director Infonomics Pty LtdMember, Standards Australia Committee IT-030

Member, ISO/IEC JTC-1 WG6

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Today’s briefing

• The topic, and the problem: Governance of Information Technology;

• The ISO 38500 Framework for governance;• The Infonomics approach to assessment;• What we learn about governance effectiveness.

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The topic and the problem:

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… IT keeps going wrong!2004

Five Day Fiasco

2005

Cargo Management

2006

ERP Consolidation

2007

Futures Market

2009

Amadeus

2010

Crippled

2010

Year 2010

2008

Terminal 5Choked

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The promise of Information Technology...

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... or a shattered dream.


We have tried to make IT better… …but we have missed the key issue!

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ISO 38500: First GlanceAustralian guidance leads the world…

21 April 2023

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Corporate Governance: The System by which

entities are directed and controlled.

(Cadbury)

The ISO 38500 Framework for governance:Part of Corporate Governance.

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Adapted from “Corporate Governance – A Working Definition”, Teresa Barger, Director IFC/World Bank Corporate Governance Department

Adapted from “Corporate Governance – A Working Definition”, Teresa Barger, Director IFC/World Bank Corporate Governance Department

Governance“Protect owners interests”

Management“Develop business capabilities”

“Run business operations”

Ownership“Appoint the Directors”

EstablishStrategy

Direct Monitor

Definition from “Report of the Committee on the Financial Aspects of Corporate Governance” (Chair: Sir Adrian Cadbury), London, 1992

Definition from “Report of the Committee on the Financial Aspects of Corporate Governance” (Chair: Sir Adrian Cadbury), London, 1992

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Ongoing business

operations

StrategicBusinessFuture

Reliable IT Service

Effective IT enabled change

Information technology in context...

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Business Domain: How IT

is used to enable and operate the

business

IT Domain: How IT is

managed and delivered.

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... management responsibilities.


Ongoing business

operations


Reliable IT Service


Business Domain: How IT

is used to enable and operate the

business

IT Domain: How IT is

managed and delivered.

Information technology in context...

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Ongoing business operations


Reliable IT ServiceEffective IT

enabled change

Business Domain: How IT is used to enable and operate the business

IT Domain: How IT is managed and

delivered.

Dem

and

Dem

and


GovernanceEvaluate

Information technology in context...... Governance oversees management.

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Reliable IT ServiceEffective IT

enabled change



delivered.

Dem

and

Dem

and

Direct MonitorCurrent & proposed

demand for & supply of IT


GovernanceEvaluate

Governance and management of IT...... a symbiotic system...

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delivered.


Reliable IT Service

Dem

and



Dem

and

Direct MonitorCurrent & proposed

demand for & supply of IT

Evaluate

Direct Monitor

IT enabled business

operations

IT enabled business change projects

Business

Pressures


Governance and management of IT...... a symbiotic system...

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GovernanceEvaluate

Direct Monitor

IT enabled business

operations

IT enabled business change projects

Business

Pressures

Business

Pressures

Governance

Management

Evaluate

Direct Monitor

IT enabled business change

projects

IT enabled business

operations

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Governance and management of IT...... a symbiotic system based on principles.

ISO 38500 principles• Responsibility;• Strategy;• Acquisition;• Performance;• Conformance;• Human Behaviour.

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Business

Pressures

Governance

Management

Evaluate

Direct Monitor

IT enabled business change

projects

IT enabled business

operations

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The ISO 38500 Assessment FrameworkAre we governing and managing effectively?

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What does each cell mean?

How do you perform?

What should you seek to improve?

What consequences of improvement should you seek?

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©2010 Infonomics Pty Ltd Governance & Management of IT 21 April 2023 Page 15

The Infonomics Assessment System:The first 6 Indicators from a set of 84 points.

11 22 33 44 55 66Huh?Huh? NoNo Very littleVery little SomewhatSomewhat

Assertion Score

1 Your organisation has a formal system for Governance of (to direct and control) IT.

2 All business and technology managers understand and comply with the system for Governance of IT.

3 The system for Governance of IT protects you from IT failures in operations and projects.

4 The system keeps management and directors properly informed of IT status.

5 Ongoing business dependence on IT is well understood.

6 IT is used effectively in day to day business operations and plans for IT use contribute to future business sustainability.

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Very closeVery close ExactlyExactly


The Infonomics Assessment System:The scoring model.

• Assertions reflect good practice and outcomes that would be observed in organisations that have good governance that is well aligned with ISO 38500.

• Consider each and score it using the 1 to 6 scale below.

• Score 1 if you think your organisation would not understand the point.

• Score 2 if your organisation would understand it, but clearly doesn’t do it.

• Score higher as you see the extent of alignment.

11 22 33 44 55 66Huh?Huh? NoNo Very littleVery little SomewhatSomewhat Very closeVery close ExactlyExactly

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The Infonomics Assessment System:Interpretation framework.

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1122

3344

5566

Unknown GapUnknown Gap

Known GapKnown Gap

WeakWeak

BasicBasic

GoodGood

ExemplaryExemplary

Don’t know what a car is.Don’t know what a car is.

Know what a car is: Can’t drive.Know what a car is: Can’t drive.

Can get the car moving – crash at first corner.Can get the car moving – crash at first corner.

Can drive to many places. Crash if there’s oil on the road.Can drive to many places. Crash if there’s oil on the road.

Competently identifies and controls most road hazards including the bad driving of others.Competently identifies and controls most road hazards including the bad driving of others.

Never gets driving wrong, whether on public roads or race tracks.Never gets driving wrong, whether on public roads or race tracks.

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The Infonomics Assessment System:Benchmarking and comparing performance

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Principles Responsibility Plan Acquire Perform Conform Human Factors

Corporate Governance of ICT - Indicators

Exemplary

Good

Basic

Weak

None

No view

Human Communities:•Who are they?•How do they behave?•What do they need?•What motivates them?

Human Communities:•Who are they?•How do they behave?•What do they need?•What motivates them?

Principles Strategy Performance Human Behaviour

RMIT and Infonomics research 2006-7. Published in “Achieving Business Sustainability” (Infonomics), and “Information Technology Entrepreneurship and Innovation”, edited by Fang Zhao, published by IGI Global, 2008.

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Responsibility Acquisition Conformance


The Infonomics Assessment System:Behavior drives performance

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Can improved conformance lead to better re

sults?

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The Infonomics Assessment System:Cross referencing provides insight

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Corporate Governance of ICT - Indicators

Exemplary

Good

Basic

Weak

None

No view

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The Infonomics Assessment System:Detailed modeling exposes behaviour patterns.

• One executive (X1) has a much more positive view, consistently, across all assertions, including several “exemplary”.

• Technology managers tend to be broadly consistent in their views, and see things differently to the business managers in several areas. However most executives agree with technology managers.

• One executive (X1) has a much more positive view, consistently, across all assertions, including several “exemplary”.

• Technology managers tend to be broadly consistent in their views, and see things differently to the business managers in several areas. However most executives agree with technology managers.

• Broader engagement and some comfort in finance may be linked to closer engagement on SAP.

• The “black holes” reflect poor business engagement and participation in setting the IT agenda. Improvement in this area would almost certainly help performance in other areas.

• Broader engagement and some comfort in finance may be linked to closer engagement on SAP.

• The “black holes” reflect poor business engagement and participation in setting the IT agenda. Improvement in this area would almost certainly help performance in other areas.

Alignment Index = 3Alignment Index = 3Overall ViewOverall View

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T1

T5

T2

T4

T3

F3

F1

F5

F2

F6

R6

R4

R1

S5

S2

S3

S4

M1

M3

M8

M4

X1

X6

X8

X3

X5

X1

0 G1 Governance system

G2 Management compliance

G3 Effective protection

G4 Inform & engage

G5 Dependence understood

G6 Continuity & sustainability

G7 Business alignment

G8 Resource allocation

G9 Business innovation

G10 Investment value

G11 Deployment capability

G12 Acceptable risk

AS8015 Alignment - Top level by role


Questions

More information: www.infonomics.com.au

The Infonomics LetterWaltzing with the Elephant

Today’s slides:www.infonomics.com.au/PresACOSM2010.htm

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Documents

Measuring the Unmeasurable: Governance & Management of Information Technology