MIT 15 571 - Generating Business Value From Information Technology

Unformatted text preview:

15.571 Generating Business Value From Information TechnologyAgendaWhat Is IT Governance?Five Key IT Decisions Need To Be GovernedIT Governance at USAAIT Governance at USAAGovernance is challenging to implement because IT decisions are made at multiple organizational levelsSouthwest AirlinesGovernance processes at Southwest AirlinesKey Findings on IT GovernanceRethinking IT Investments as IT Portfolio Based on proven and familiar principles of financial portfolio managementWhat’s In the IT Portfolio Firms Have an IT Portfolio with Four Asset ClassesRethinking IT as an Investment Portfolio — Four Different Asset ClassesThe Four IT Asset Classes Have Different Risk Return ProfilesMIT OpenCourseWarehttp://ocw.mit.edu 15.571 Generating Business Value from Information TechnologySpring 2009 For information about citing these materials or our Terms of Use, visit: http://ocw.mit.edu/terms.Center for Information Systems Research (CISR) © 2009 MIT Sloan CISR - RossCenter for Information Systems Research (CISR) © 2009 MIT Sloan CISR - RossJeanne W. RossDirector & Principal Research ScientistCenter for Information Systems Research (CISR)MIT Sloan School of Management 15.571 Class 10: IT GovernanceGenerating Business Value Generating Business Value From Information Technology15.571 From Information TechnologyCenter for Information Systems Research (CISR) © 2009 MIT Sloan CISR - RossCenter for Information Systems Research (CISR) © 2009 MIT Sloan CISR - Ross1 Definition of IT Governance Designing Governance– Five key decisions– Mechanisms for making those decisions– USAA example Implementing Governance– 6 key stakeholders make IT decisions– Southwest Airlines example IT Investment Decisions– Thinking of IT investments as a portfolio– Recognizing the different risk-return profiles of 4 asset classesAgendaAgendaCenter for Information Systems Research (CISR) © 2009 MIT Sloan CISR - RossCenter for Information Systems Research (CISR) © 2009 MIT Sloan CISR - Ross2Framework for decision rights and accountability to promote desirable behavior in the management and use of IT.Key elements of governance:Desired behavior (target of governance)– Operating model and strategic objectivesGovernance mechanisms (how governance is implemented)– e.g. IT council, business process teams, architecture process, SLAs, CapEx process, business IT relationship managersAccountability (how governance works)Clarification of who is responsible and how they will be assessedSource: IT Governance: How Top Performers Manage IT Decision Rights forSuperior Results, P. Weill & J. Ross, Harvard Business School Press, 2004.What Is IT Governance?What Is IT Governance?Center for Information Systems Research (CISR) © 2009 MIT Sloan CISR - RossCenter for Information Systems Research (CISR) © 2009 MIT Sloan CISR - Ross3Five Key IT Decisions Need To Be GovernedFive Key IT Decisions Need To Be GovernedSource: IT Governance: How Top Performers Manage IT Decision Rights forSuperior Results, P. Weill & J. Ross, Harvard Business School Press, 2004. For key issues in each decision area, see Figure 2-6, pp. 54–55.Center for Information Systems Research (CISR) © 2009 MIT Sloan CISR - RossCenter for Information Systems Research (CISR) © 2009 MIT Sloan CISR - Ross4 The company: diversified financial services company serving the U.S. military; 5 major businesses (life insurance, property and casualty insurance, personal bank, investment management company, and personal services) The desired behavior: present a single face to customer but retain business expertise The major initiative: a customer relationship management system and single call center to support improved customer service The mechanisms: created ITCO—a single IT company supporting all the businesses; created Enterprise Business Operations—a business function with 240 people responsible for enterprise applications and operationsIT Governance at USAAIT Governance at USAACenter for Information Systems Research (CISR) © 2009 MIT Sloan CISR - RossCenter for Information Systems Research (CISR) © 2009 MIT Sloan CISR - Ross5USAA’s Information Technology CompanySenior Financial OfficerH. Carswell, VPBank SystemsJ. Thomas, AVPLife Appls & CAPCO SprtL. Hernandez, EDInvestment Applications& Professional ServicesE. Rizzolo, AVPEnterprise SolutionsG. Schwartz, SVPP&C SystemsB. Ingram, SVPAVP Chief Technology OfficeR. Burks, AVPOperationsR. Boerner, SVPITCO Executive AdministrationByron Bryant, EDITCO PresidentS. YatesCenter for Information Systems Research (CISR) © 2009 MIT Sloan CISR - RossCenter for Information Systems Research (CISR) © 2009 MIT Sloan CISR - Ross6Source: IT Governance: How Top Performers Manage IT Decision Rights forSuperior Results, P. Weill & J. Ross, Harvard Business School Press, 2004. For key issues in each decision area, see Figure 2-6, pp. 54–55.Other governance mechanisms include: Green Book specifying project methodology; architects on project teams; monthly project reviews, and a bonus program encouraging enterprise synergies.IT Governance at USAAIT Governance at USAACenter for Information Systems Research (CISR) © 2009 MIT Sloan CISR - RossCenter for Information Systems Research (CISR) © 2009 MIT Sloan CISR - Ross7Source: N. Fonstad and D. Robertson, "Linking Mechanisms at TD Banknorth," MITSloan CISR Research Briefing, Vol. VI, No. 1D, March 2006. Non-IT ITCorporate/ Strategic LevelBusiness Unit/ Tactical LevelProject Team/ Operational LevelCorporate Strategy & VisionBusiness Unit Strategy & VisionProject ProposalEnterprise IT ArchitectureBusiness Unit IT ArchitectureProject's Proposed IT SolutionGovernance is challenging to implement because IT decisions are made at multiple organizational levelsGovernance is challenging to implement because IT decisions are made at multiple organizational levelsCenter for Information Systems Research (CISR) © 2009 MIT Sloan CISR - RossCenter for Information Systems Research (CISR) © 2009 MIT Sloan CISR - Ross8 The company: $9 billion U.S. airline flying low fare, no frills flights within the continental U.S. Founded in 1971; has been profitable 34 straight years The desirable behavior: operational excellence from standardized and integrated processes The major initiative: rebuild systems to enhance "sacred transactions" The mechanisms– Strategy teams: engage 30 top managers in defining informationneeds of the


View Full Document

MIT 15 571 - Generating Business Value From Information Technology

Download Generating Business Value From Information Technology
Our administrator received your request to download this document. We will send you the file to your email shortly.
Loading Unlocking...
Login

Join to view Generating Business Value From Information Technology and access 3M+ class-specific study document.

or
We will never post anything without your permission.
Don't have an account?
Sign Up

Join to view Generating Business Value From Information Technology 2 2 and access 3M+ class-specific study document.

or

By creating an account you agree to our Privacy Policy and Terms Of Use

Already a member?