IT Leadership and Governance
The IT Leadership and Governance (ITG) capability is the ability to motivate employees towards a common strategic direction and value proposition, and to establish appropriate IT decision-making bodies and processes, including mechanisms for IT escalation, accountability, and oversight. While the leadership aspect establishes the IT function's direction, it cannot directly affect all IT decisions distributed across the various levels in the organization. The governance aspect addresses this by establishing appropriate IT decision rights, and mechanisms for accountability and oversight. The IT Leadership and Governance (ITG) capability covers:
- Uniting the IT function around a shared IT value proposition, vision, and direction.
- Determining the effectiveness of the partnership between IT and other business units.
- Determining the effectiveness of IT leadership.
- Establishing governance/decision-making bodies and processes, including decision rights, accountabilities, and escalation paths.
Structure
ITG is made up of the following Categories and CBBs. Maturity and Planning are described at both the CC and the CBB level.
- ALeadership
Designed to encourage commitment to the purpose and value proposition of the IT function.
- A1Value Orientation
Advocate for delivery of the expected business value from IT.
- A2Business Interaction
Build a high-quality and effective partnership between the IT function and other business units. Build an understanding of business requirements and how they can be met or enabled by IT.
- A3Communication
Establish mechanisms for dialogue with stakeholders such as IT colleagues, other business units, and third parties.
- A4IT Vision
Promote the role of the IT function and its strategic direction.
- A5Style, Culture, and Collaboration
Create a style of IT leadership that is effective in driving progress, winning support from stakeholders, and fostering a culture of credibility, accountability, and teamwork.
- BGovernance
The structures and supporting mechanisms needed for effective IT decision-making, escalation, and oversight.
- B1Decision Bodies and Escalation
Establish IT governance bodies, defining their composition, scope, and decision rights, stating their role in complying with regulatory obligations, and setting out protocols for escalation between them and their organizational units.
- B2Decision-Making Processes
Implement decision-making processes based on, for example, principles of transparency and accessibility. Document decisions and translate them into action plans.
- B3Reporting and Oversight
Monitor the status of essential IT capabilities and desired outcomes, including key performance indicators (KPIs) and accountabilities.
Overview
Goal
The IT Leadership and Governance (ITG) capability establishes a leadership style, and ensures that distributed IT decisions are supportive of the organization's strategic goals and objectives.
Objectives
- Establish the IT leadership competences required to drive organizational progress and win stakeholder support.
- Enhance the business orientation and engagement of IT leaders.
- Establish IT governance as a central component of effective corporate governance.
- Improve confidence in, and the agility and transparency of IT decision-making.
- Establish appropriate IT accountability mechanisms.
- Establish oversight structures to support compliance with ethical, legislative, and/or regulatory obligations.
- Provide broad oversight on the performance of IT in the organization.
Value
The IT Leadership and Governance (ITG) capability can improve the direction and consistency of leadership and distributed IT decision-making throughout the organization, and accelerate realization of the organization's strategic goals and objectives.
Relevance
Emerging and disruptive technologies can transform an entire organization and change its relationships with its customers, partners, and suppliers. However, without clear IT leadership and governance approaches, the organization may be exposed to heightened risk, inappropriate resource allocation, and poor performance from IT. Effective IT leadership is necessary to encourage commitment to the purpose and value proposition of IT, and to set accountabilities for value delivery. Appropriate governance (including decision rights and oversight mechanisms) is required to enable the IT function to move swiftly and as a cohesive unit so that it can extract full business value from technology-enabled business investments.
By establishing an IT Leadership and Governance (ITG) capability, an organization can effectively and efficiently deploy IT in pursuit of its business goals. The IT leadership team steers the IT function in a direction supportive of the organization's goals and best interests. IT governance is integrated with the wider corporate governance function, with IT decisions jointly and consistently taken by the IT function and other business unit leaders1. The ability of the IT function to demonstrate leadership and governance through improved accountability mechanisms and structures will help ensure that the IT function takes appropriate decisions in support of the business strategy, reacts to legislative demands, manages IT resources and risks effectively, and contributes value to the organization2.
Scope
Definition
The IT Leadership and Governance (ITG) capability is the ability to motivate employees towards a common strategic direction and value proposition, and to establish appropriate IT decision-making bodies and processes, including mechanisms for IT escalation, accountability, and oversight. While the leadership aspect establishes the IT function's direction, it cannot directly affect all IT decisions distributed across the various levels in the organization. The governance aspect addresses this by establishing appropriate IT decision rights, and mechanisms for accountability and oversight. The IT Leadership and Governance (ITG) capability covers:
- Uniting the IT function around a shared IT value proposition, vision, and direction.
- Determining the effectiveness of the partnership between IT and other business units.
- Determining the effectiveness of IT leadership.
- Establishing governance/decision-making bodies and processes, including decision rights, accountabilities, and escalation paths.
Improvement Planning
Practices-Outcomes-Metrics (POM)
Representative POMs are described for ITG at each level of maturity.
- 2Basic
- Practice
- Promote a common IT vision within the IT function and inspire commitment to it.
- Outcome
- Emerging buy-in to the IT vision is evident, particularly among key stakeholders and influencers in the IT function.
- Metric
- Percentage of IT employees who see the connection between their work and the IT vision.
- Practice
- Ensure there is effective two-way dialogue across the IT leadership team.
- Outcome
- The leadership team can constructively challenge the perspectives and decisions of the management team, leading to more robust decision-making outcomes.
- Metric
- Yes/No indicator regarding facilitation of diverse contributions and perspectives at team meetings.
- Practice
- Establish basic decision-making criteria in the areas most critical for the functioning of the IT function.
- Outcome
- Consistent decision-taking is ensured for the most important decisions.
- Metric
- Yes/No indicators regarding the involvement of appropriate individuals in relevant decisions.
- 3Intermediate
- Practice
- Ensure members of the IT leadership team collaborate with other business units to develop a sound grasp of the business and to anticipate key business requirements.
- Outcome
- The IT team responds promptly and efficiently to key requests from the other business units.
- Metric
- Percentage of IT service change requests not meeting customer expectations.
- Practice
- Expand the IT decision-making process to clearly define which individuals across the IT function need to be involved in what decisions.
- Outcome
- Decisions are increasingly taken in a transparent manner by appropriate individuals.
- Metric
- Yes/No indicators regarding the involvement of appropriate individuals in relevant decisions.
- Practice
- Define a comprehensive escalation process for troubleshooting key IT decisions.
- Outcome
- Key IT decisions can be readily escalated and addressed in a consistent manner.
- Metric
- Percentage of dcisions escalated that follow the defined IT escalation process.
- Practice
- Establish an IT steering committee, which is co-chaired by the CIO and senior representatives from other business units (such as the Chief Financial Officer) to oversee all important IT decisions and monitor performance of the IT function.
- Outcome
- Senior representatives from the business can influence important IT decisions, resulting in greater alignment with the business objectives.
- Metric
- Relative proportion of executives from the IT function and executives from other business units on the IT steering committee.
- 4Advanced
- Practice
- Promote the IT vision throughout the organization, with an emphasis on enabling business objectives rather than delivering technical objectives.
- Outcome
- Stakeholders across the organization can see that the primary focus of the IT vision supports strategic business objectives.
- Metric
- Level of agreement among business unit leaders regarding whether the IT vision enables the organization's objectives.
- Practice
- Expand the IT decision-making process to involve appropriate individuals across the organization and ensure the availability of all relevant information and well-defined criteria for making decisions.
- Outcome
- All decisions are based on factual information, and are taken in a transparent manner by appropriate individuals.
- Metric
- Yes/No indicators regarding the involvement of appropriate individuals in relevant decisions.
- Practice
- Periodically stress test the escalation process to confirm its ability to deal with all potential IT decisions.
- Outcome
- All IT-related decisions can be readily escalated and addressed in a consistent and timely manner.
- Metric
- Percentage of decisions escalated that follow the defined IT escalation process.
- Practice
- Ensure the IT governance council is a subset of the executive board, and is chaired by the CEO or the highest-ranking person in the organization.
- Outcomes
- IT governance is anchored at the organization's executive level.
- The IT governance council can devolve its authority with confidence through a cascade of subsidiary committees or working groups at business unit and programme/project levels.
- Metric
- Percentage of top executives on the IT governance council.
- Practice
- Ensure monitoring systems for IT governance are focused on business outcomes and are operating effectively.
- Outcome
- The governance monitoring systems enable the outcomes of organization- wide IT-supported activities to be transparently reviewed, and agile corrective decisions made.
- Metric
- Number of upheld complaints submitted against governance decisions.
- 5Optimized
- Practice
- Reflect accountabilities for value delivery as a major category in all individual and group performance scorecards.
- Outcome
- Business value goals are reflected in the performance assessments of IT leaders.
- Metric
- Percentage of bonuses related to business value delivery.
- Practice
- Empower the IT leadership team to proactively engage with business ecosystem partners on the improvement of business processes and business value.
- Outcomes
- IT leaders are to the fore in driving the success of the business.
- The IT function is viewed positively by the rest of the organization and is perceived as an exemplar by business ecosystem partners, competitors, and other external parties.
- Metric
- Percentage of IT leaders collaborating with business ecosystem partners and engaging in industry-relevant activities.
- Practice
- Ensure IT governance is rooted in corporate governance, is directed by the board of directors, and regularly incorporates insights from the business ecosystem to improve the governance structures.
- Outcome
- IT governance reflects industry best known practice, and its importance is recognized by its position within the corporate governance structures.
- Metric
- Frequency of reviews of the IT governance structures (and updates as appropriate).
Reference
History
This capability was introduced in Revision 16 as a new critical capability.
It was deprecated in Revision 18.07, being split into Governance (18.07) and Leadership (18.07).