Good Governance Is a Make-or-Break Factor for IT

CIOs say that governance rules will ensure that IT initiatives are transparent, efficiently managed and provide maximum business impact.

Linking Projects to Strategy

Kim Barrier, VP & CIO, Bio-Rad Laboratories: We have a business and IT team that reviews our IT project portfolio. We have only so many dollars, hours and people, and we’re now doing a major global SAP implementation, so we have to prioritize our resource investments. This requires looking at projects with more discipline and structure to ensure there is a business case. The team meets regularly and uses an intake process that details the costs, time line, resource impact and business value. Typically, projects over $250,000 go through this process, but we will examine less costly projects if they affect the strategic direction of the company.

We want to grow from a $2 billion company to a $5 billion company by 2019. We have strategies to do that–organic growth, acquisitions, operational efficiency, R&D collaboration and customer intimacy–and we evaluate IT projects that can enable these. The SAP project is a big driver of operational efficiency, for example. When a project goes through the intake process, we create a business case to determine how it fits with where the company wants to go. Projects are not reviewed in isolation; we look at them in terms of a three-year road map, our dependencies and our strategy.

An Instrument for Engagement

Jonathan Kass, VP & CIO, Veterinary Pet Insurance: As a mid-market company, our governance is designed to engage the entire executive team and ensure that discretionary funding is as directly aligned as possible with our business priorities and strategic initiatives. The intent is to provide transparency and enable a collaborative process so business executives feel they own IT spending and resources. The executive team acts as the IT strategic planning council, and executives are involved in chartering projects. A member of the executive team also sponsors each IT initiative, increasing confidence that projects will move along and meet business goals. The governance process guides not only how we launch projects but also how we keep an eye on them.

We recently wanted to streamline our enrollment process to improve the customer experience. The governance we have in place allowed us to very quickly change IT priorities and align resources with our business partners. IT works closely with the business to test concepts and evaluate consumer behavior on our website. When it came time to change the enrollment process–which involved changing not just a field on the website but also how our insurance application process itself worked–we exceeded the very aggressive business schedule.

Transparency and Alignment

Houston Ross, VP & CIO, ING Life Insurance (Japan): Two years ago, the IT organization was split between applications and infrastructure, and the two never seamlessly meshed. The governance model we now have–which uses elements of the IT Infrastructure Library, Control Objectives for Information and Related Technology, IT Service Management and Six Sigma frameworks–gives us a mechanism to connect the two. As a result, we have a better idea of how changes to our infrastructure affect what we can do from an applications perspective, for better or worse, and vice versa.

This kind of transparency helps us build applications and implement infrastructure to deliver business results, and it gives us a new level of agility to enable the business.

We have adopted cloud computing, which would have been difficult without transparency. We have also increased our speed of delivery–deployment cycles that once took 9-12 months now take six–because we no longer have two separate assessments for applications and infrastructure. We deploy IT resources based on business capability rather than applications; IT managers are aligned with business areas such as distribution management rather than applications. None of our strategic projects have failed in the past year. From a governance perspective, we’re doing the basics right in terms of requirements management, design and architecture planning.