IT Governance: Building Value in IT Projects through IT Governance
According to the Gartner group – more than 600 billion dollars is thrown away annually on ill conceived or ill executed IT projects. According to the Standish group, which completes a bi-annual study of IT projects, 19% of all projects fail outright, 46% are challenged and only 35% are successful.
To address the real issues at play behind these statistics, both project stakeholders and project managers must continuously monitor and evaluate the effectiveness of project work and the decisions which support the project. At the core of the successful IT project lies a commitment to IT Governance. IT Governance is the process of orienting and adjusting to the changing conditions of the project requirements and project environment. It is the job of both the project sponsor and the project manager to specifically evaluate the state of the project by asking “am I where I thought I was going to be?” “How can I get there?” “Do I need to change course, or re-evaluate the goals of the project?” “Are we doing things correctly and doing them well?” “Are we getting the most benefit we can from the processes?” There is, after all, no sense in doing something that is not done well or provides no benefit to the organization.
By asking these questions, we are engaging in good corporate governance, and are well on the way to enabling the organization to realize the benefits of Information Technology. Specifically, the principles of IT Governance provide a framework for the leadership, processes and structures necessary to support the enterprise Information technology objectives. The principles of IT Governance define the decisions which needs to be made, who is responsible for making the decisions, and how the decisions are made. IT Governance also defines the processes and support structures necessary for monitoring the effectiveness of the decisions.
IT Investments are becoming larger, and projects are increasing in complexity. Current IT projects are less focused on automation of a simple task and more on implementing and IT strategy which supports changing business processes. Organizations are not only investing in the IT infrastructure, but investing in IT enabled change. Success in implementing this change depends on an organizations ability to manage the 5 focus areas of IT Governance. According to the IT Governance Institute’s Val IT Framework, the 5 principles of IT Governance include:
- Risk management — addressing the safeguard of IT assets, disaster recovery and continuity of operations
- Resource Management — realizing the optimal investment in, and proper management of, critical IT resources
- Performance Measurement — tracking and monitoring strategy implementation, project success, resource usage, process performance and service delivery
- Strategic Alignment — focus on aligning with the business and collaborative solutions
- Value Delivery — concentrating on optimizing expenses and proving the value of IT
Strategic alignment and value delivery are traditionally areas of focus not for the project manager, but for the project portfolio manager or project sponsor. However, it is essential that the project manager actively engage executive management and seek to understand both how the IT project delivers value and integrates with the overall enterprise strategy. This information will enable the project manager to effectively make decisions, measure project performance and set priorities. Most importantly, the project manager will be working with enterprise leadership to ensure that the project team is doing the right things, doing them correctly and providing value to the organization.