Six Process of Effective IT Management Control. Five Fundamentals of Information Resource Management.

Management has been described as the optimization of utilization of corporate resources through the planning, organizing, leading, and controlling of the members of any organization. It is a process of continuous improvement whereby the business itself is constantly adapting to its environment and management must change in like order.

The management process begins with an understanding of the organization’s business. Until this is achieved, any attempt to determine organizational need will be at best misleading and at worst disastrous. Once the overall objectives and environment of the business have been established, establishing the needs becomes a comparatively easy task. The organization’s needs may be determined by identifying and examining the key activities whose effective performance can make or break the organization. These key activities must themselves be monitored and therefore ambitious performance objectives must be established early in the planning process. For every performance objective there will be a range of threats which, if fulfilled, will either reduce the effectiveness or totally negate the objective. These must be assessed in a formal risk assessment to determine the appropriate corporate coping strategy. The coping or control strategies must be determined by management and the appropriate controls themselves selected. The actual controls must be implemented and monitored and there should exist controls to ensure this happens. Controls, once implemented, must be effective in performance and periodically management must evaluate and review performance with this in mind.

1. UNDERSTANDING THE ORGANIZATION’S BUSINESS
This is a combination of a theoretical approach utilizing literature searches on the organization and its functions on the business press, if possible, combined with a reading of annual reports in order to obtain the whole picture.
This theory will be combined with a more practical approach involving interviewing staff in order to both evaluate their understanding of the business as well as to confirm the auditor’s understanding. Site visits to observe the operation of specific business functions will also assist. Further information and confirmation may be derived by comparing the current understandings to those in effect during previous reviews.

2. ESTABLISHING THE NEEDS
Once the overall objectives and environment of the business have been established, the overall needs must be determined. A study of the organizational mission statement permits the general performance objectives to be derived. Management should have established strategic plans and objectives in order to ensure these are achieved. By interviewing executive management, employees, and perhaps even customers and suppliers, the business needs for the successful accomplishment of the objectives may be determined.

3. IDENTIFYING KEY ACTIVITIES
The major products and services provided to meet the business objectives need to be identified. Once again this will involve determining the level of management’s understanding of customer needs and sizes, the competition and their probable response patterns, as well as their understanding of which are their own key performance areas (KPAs). The KPAs are those activities that will make or break those activities.

4. ESTABLISH PERFORMANCE OBJECTIVES
For each KPA, Performance Objectives must be established. This involves seeking core activity targets that are both achievable and stretching. Key Performance Indicators (KPIs) will be required to measure performance appropriately. The risks and threats that could lead to non/under-achievement must be assessed including both external and internal threats.

5. DECIDE THE CONTROL STRATEGIES
Once the full risk analysis is complete, management is in a position to decide what activities must be ensured, which risks must be managed, and which transferred. This, in turn, will dictate which risks can be cost-effectively prevented, which must be detected, and how a materialized risk can be corrected.
Business risks must be prioritized and trade-offs will be required because control measures are commonly contradictory, so that efficiency may trade-off against effectiveness.

6. IMPLEMENT AND MONITOR THE CONTROLS
For controls to be effective, they must be monitored and wishing them into existence will not accomplish the fact. Controls result from the planned and thoughtful intervention of management to achieve a specific end.
Monitoring may take several forms including self-assessment, the use of regular audits, and the introduction of continuous improvement programs. Controls must be frequently reviewed for ongoing relevance as well as for their effectiveness and must be modified and adapted where required.

INFORMATION RESOURCE MANAGEMENT
Information Resource Management is based upon five fundamentals:
1.    Information Management. Information is valuable and must be managed as such. In many organizations, information does not appear on the balance sheet or asset register and is thus seen as something that, while important, is not really valuable.
2.    Technology Management. Technology Management addresses the whole aspect of the value of technology to the firm. This includes the impact and effect on other resources as well as the gaining of strategic advantage by judicious use of the appropriate technology.
3.    Distributed Management. Where systems are located can have a significant impact on systems effectiveness as well as internal control and thought must be given to the maintaining of an adequate system of managerial control.
4.    Functional Management. Like other functional areas, IS must be directed and controlled in order to ensure the effective, efficient, and economic use of what is, after all, an expensive resource.
5.    Strategic Management. IS holds the potential to gain and maintain major competitive advantage for the organization. Used appropriately, IS can raise the barriers of entry to competition, gain exclusivity for the information holder, and generally keep the organization ahead of the pack.

Six Process of Effective IT Management Control. Five Fundamentals of Information Resource Management.

CIO Roles for achieving Outstanding Corporate Success.

CIO Roles

Successful CIOs have a core set of skills and roles which allows them to succeed in an age of complexity and constantly shifting business requirements.

In the 1960s, information technology (IT) was a back-room, low-prestige operation. The "electronic data processing (EDP) manager" would typically not be on the same social, educational, or organizational level as, for example, the vice president (VP) of finance or the head of manufacturing. Roll forward to the 21st century and the CIO is now blessed with acceptance into the "senior leadership club" but challenged by responsibilities never imagined in the past.

Following are some of the roles the new CIO is expected to play:
 Providing technical strategy that seamlessly segues into the corporate business strategy — even in the absence of a well-defined business plan and implementation road map. As Sun Tzu said, "Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat."

 Maintaining a computing and communications (people, data, phone, cell, etc.) infrastructure that is always available.

 Having knowledge and foresight enough to develop an architecture that, after implementation, enables the business to provide many new services, reduce costs, and streamline operations with existing infrastructure and systems. In other words, you can avoid the scenario where the chief executive officer (CEO) says "I want to do X" and your response is usually "Great, we'll need to install Y to make it happen and it will cost $Z."

 Ensuring that the IT portfolio fund is utilized and managed properly. Dollars go toward high-value return-on-investment (ROI) projects that support the business strategy.

 Hiring the right people, having a tier one Rolodex, chock-a-block full of trusted contractors, and retaining high performers.

 Developing and maintaining a spot-on IT governance structure that does all the things governance is supposed to do — ensure alignment with business goals, ensure proper controls (e.g., change management, security), provide communications up and down the management chain, monitor progress, and manage risk.

 Proactively develop strategic project ideas and suggestions for the business — "the art of the possible." This is the opposite of the order-taker perspective of your muscle car era predecessors.

 Working to seamlessly integrate acquisitions into the IT/business fabric of the organization, or inversely, help to divest subsidiaries without undue disruption.

 Keeping the lid on expenses. Not only do the high-profile new projects need to be managed, but the day-to-day operating expenses and budget must be scrutinized as well.

 Translate, communicate, and educate. To paraphrase former President George H.W Bush, you need to promote the "vision thing." Short-term thinking is the enemy of effective IT, and the CIO must constantly translate (from "geek speak" to English) and communicate (two way) with the business — here is the plan, here are the benefits, and here is what will happen if we take a short-term, expedient approach. Assume, for example, that your users have always used bicycles to get to work. You suggest an automobile. "Good idea," they say, "but we're used to handlebars and this steering wheel feels awkward; let's install handlebars in the automobiles." At that point, you and the user's management need to communicate so that the message to the users is clear — we are going to have a little short-term pain for some long-term benefit.

CIO Roles for achieving Outstanding Corporate Success.

10 Things CIO Should Tell Management about Technology. How to influence Management. IT Does Matter. Align Technology Investments to Business Strategy.

Ten Things IT Should Tell Management

The Wall Street Journal published “Ten Things Your IT Department Won’t Tell You” (July 30, 2007) that lists some things you might do to get around your chief information officer’s (CIO) policies and procedures, things like how to download forbidden software or get your e-mail from lots of places when your corporate messaging server doesn’t want to cooperate. I thought this was a silly article. It was like I was reading about how 12-year-olds plot to confuse their parents to get more access to video games. After complaining to some friends about the whole premise of the article, one of them challenged me to turn the message around. “So, big shot, what would you tell ‘management’ about technology?”

Here’s what I’d say:
1. “First of all—‘management’—technology is an asset that needs to be nurtured—like a brand or a customer service reputation. If you don’t invest in the asset, its value will fall—just like any asset. Just ask Dell or Mercedes what happens when service and quality—respectively—suffers.”

2. “And while we’re talking about all this, remember that although operational technology has definitely commoditized, there are still strategic technology investments we need to be very careful about making. It’s possible to make some major mistakes in the acquisition of all kinds of technology, so let’s get some serious discipline in the technology acquisition process—and, please, don’t listen too closely about killer apps at cocktail parties. Everyone knows that alcohol and technology don’t mix.”

3. “Don’t forget that technology is still complex, even though industry standards have helped improve integration and interoperability. Listen, while there are fewer moving parts, the way we deploy them still makes the technology world tough to manage—and our vendors don’t always help us.”

4. “Please stop making exceptions to the governance process. If you want to save money and keep us agile, then do not allow all the flowers to bloom; instead, publish the standards and then stick with them. Every time you let someone off the hook, you make our life more complicated—and expensive.”

5. “Make the company’s business strategy as transparent as possible (unless you really don’t like talking about your own strategy). The more the technocrats know about the business strategy, the more efficient they will be acquiring and deploying technology.”

6. “Please make us account for our technology investments. Please make us link them to the business strategy and the impact each investment has on operational or strategic success. In spite of what you may think, we like ROI (return on investment) thinking. Hold us—and everyone—to it.”

7. “Stop underestimating the impact the Web will have on business. I am really tired of our thinking that the Web is just another channel. The Web is not an evolutionary channel. It’s definitely a revolutionary one that changes dramatically every year. Please allow us to pay close attention to new Web technologies and Web-based business models. By the way, why aren’t we crowdsourcing our R&D (research and development)?”

8. “Listen to my whining about the lack of a discretionary budget. I need some money to try new things. I need to fail fast and fail cheap, but without a discretionary budget I can’t do either.”

9. “Please don’t acquire any companies until I’ve looked at their technology. Never assume that our technologies will ‘seamlessly integrate.’ Never assume that there are automatic technology gains that will result from a merger or acquisition. Nothing is farther from the truth.”

10. “Invest in the right people with the right skills at the right price. Reward major contributors and prune out the losers. There’s nothing else you can do to excite the troops more. They need to believe that hard work will be rewarded—and that lousy work will be punished.”

What would you say to “management” about technology? It might make sense to think about what you’d say if given the opportunity. You never know when you might be invited to rant. Such rants should become part of the IT “road show” that you dust off whenever you get even the slightest opportunity to sing your praises.

10 Things CIO Should Tell Management about Technology. How to influence Management. IT Does Matter. Align Technology Investments to Business Strategy.

Managing the Cost of IT with IT Optimization Techniques.

Most of the time IT optimization is seen as a cost reduction exercise, although examples can be found where IT optimization means increasing IT spending. All IT optimization initiatives will lead to a shift in IT costs.

 An IT optimization initiative may result (as part of a complete set of changes) in refocusing on activities around new technology and outsourcing cost-extensive activities like legacy maintenance and operations. This will lead to a shift in the cost distribution on the cost categories’ external service provider, personnel, and slightly on the cost categories’ communications and facilities, and probably (in the long term) to an overall cost reduction.

 An ABC study can discover that a large amount of the costs are made for the maintenance and operations of self-made applications; this can lead to a change in strategy towards package-based applications, which will lead to a shift from the cost category personnel towards especially software (licences, etc.).

IT optimization techniques
Different techniques can be used to reduce IT costs: standardization, consolidation, concentration, centralization, outsourcing (including out-tasking) and cost cutting. These are the most commonly used techniques.

Cost cutting is seen as a technique which focuses on the decreasing of IT costs. The targets are mostly short term, and focused internally on the IT organization. The effects on the value of IT and the business are not taken into account. Examples (real life) are:
 Decrease of IT budget for the following year of 15 per cent.
 Decrease of IT personnel of 10 per cent.
 No external personnel for the rest of the year.
Cost cutting will lead to both decreasing quality of service and fewer services. In some situations this can lead to increasing total costs. Although cost cutting can be used to decrease IT costs, it is not seen as a real optimization technique because of its short-term view and internal IT focus.

Outsourcing is not a cost saving initiative in itself, but more a lever for the realization of standardization and optimization.

Centralization
Centralization is seen to create a situation where someone or something is under the control of one central authority, but does not include locations of people or assets. In IT optimization situations centralization can be used to centralize:
 Organizations, for example one central helpdesk instead of local helpdesks.
 Processes, for example one central incident management process instead of local incident management handling.
In most situations the overall quality of service will improve and the business will value IT more because they will better able to meet expectations. In other words: the differences between organizations, employees, services and users will be reduced and may lead to an overall improvement. Cost reductions can be found in the area of personnel; through standard processes personnel will be more effective and efficient and less management is required.
Centralization of hardware, software, communications and facilities will only lead to changes in the control and management. In other words the effect will be especially in the organizational area.

Consolidation
Consolidation can be best described as the uniting of things which results in an improvement. Consolidation is sometimes divided into logical and physical, but this division will not be used here. In IT optimization situations consolidation can be used to consolidate:
 Organizations, for example helpdesks, operations.
 Physical environments, for example data centres and research centres.
Consolidation is in these situations not just combining these organizations but also improving these organizations (second part of the definition). The quality of the new organization or (in case of physical consolidation) data centre or research centre should lead to improved quality of service. Cost reductions might be expected in the areas of facilities and personnel (more effective use of personnel, less management).

Standardization
Standardization is changing something to conform to a fixed standard, type or form. In IT optimization situations standardization can be used for hardware, software and communications. Standardization simplifies the IT environment. Because specialties no longer exist, fewer interfaces are needed, fewer system images are needed, etc. Additionally less specific knowledge and skills are needed. Cost reductions may be found in the area of personnel (less specific personnel needed, more efficient use of personnel, less education), external service provider (less specific knowledge needed), software and hardware (fewer maintenance contracts and lower licence fees). Moving from one-of-a-kind to packages will increase licence fees. In case standardization means one service for one requirement (instead of multiple solutions) the licence fees decrease due to economy of scale.

When standardization is used for facilities corresponding cost reduction may be achieved because the devices are standardized and maintenance contracts may be simplified. For example, all data centres have the same type of airconditioning, network, power generator, etc. In addition people will make fewer errors because all facilities are equal.
Standardization of processes and procedures can be based on generally accepted models such as ITIL, IBM’s ITPM and CMM. In this area standardization is the first step towards centralization in which one process exits for the whole organization. In addition to cost reductions in the area of personnel, standardization of processes will lead to better quality of service. End users can better understand the way of working of the IT organization when this is similar in the whole organization; this will lead to a higher (average) customer satisfaction.
Standardization of organizations is only an improvement when it is combined with other optimization techniques such as concentration or centralization.

Concentration
Concentration is the gathering of people or things in one location. In IT optimization situations concentration is used for organizations (personnel) and hardware (facilities). Concentration has a minor effect on the quality of service. Cost reductions will be especially in the area of facilities and personnel (less travelling). Concentration of hardware will result in different requirements for data communication, depending on the changing communication flows between servers and between servers and end users. In the hardware area concentration is a prerequisite for consolidation.
Concentration won’t apply to communications, processes and software.

Managing the Cost of IT with IT Optimization Techniques.

IT Value Management to increase performance and improving commercial outcomes.

Value management as a concept goes way back, to the 1940s and 1950s, when Lawrence D. Miles pioneered value analysis techniques. But he was primarily concerned with product cost reduction. Since then value management has enlarged its view to also address increasing performance and improving commercial outcomes. So what ‘value goals’ will help drive an IT function to optimize commercial outcomes? To answer that I want to turn the question round and ask, ‘What should we measure in order to get a balanced picture of IT performance that includes “commercial outcomes”?’

Well, there are many ways of measuring the performance of an IT function (in the sense that we are using the word here – we are not talking about MIPs and MHz!) but in my experience most tend to focus on either or both of the following four key characteristics:
1. Cost-efficiency, i.e. how commercially appropriate is the level of spend with the ‘IT solutions and services delivery factory’? To put it another way, ‘how economic is the IT function?’ And how productive is the ‘IT solutions and services delivery factory’, i.e. how much output per unit of input/cost? That ‘output’ might be, for example, business system functionality delivered or mainframe resources delivered or laptops supported.
2. Effectiveness, i.e. how close to ‘best practice’ are the processes of the ‘IT solutions and services delivery factory’? And do they actually produce a better outcome?
3. Value-added, i.e. how much value is the IT function adding to the business?
4. Quality, i.e. are the products and services of the IT function of the right commercial quality and are the customers of the IT function satisfied?

Here, we develop a more complete picture of the value of IT as encompassing cost-efficiency and effectiveness on the ‘supply side’ (the IT function) of the ‘IT business’ and value-added and quality on the ‘demand side’ (the business served) of the ‘IT business’. Cost-efficiency and effectiveness often have an adversarial relationship, their relative importance being largely determined by the strategic role of IT in support of the business.

Further relationships exist between the four quadrants:
A. Improvements in cost-efficiency can improve quality because ‘quality’ here is commercial quality (i.e. necessary and sufficient quality for the price).
B. Improvements in cost-efficiency can also improve value-added because improved staff productivity can reduce ‘time to market’ for projects (and their benefits) and because value is a matter of net benefits (i.e. the cost of IT product and service delivery is the ‘flip side’ of the benefits of the products and services supplied).
C. Improvements in effectiveness by deploying systems and service delivery best practices (e.g. SSADM, ITIL) can improve the quality of products and services supplied.
D. Improvements in effectiveness can also improve the value-added by products and services by deploying IT management best value practices (e.g. demand/portfolio management).

IT Value Management to increase performance and improving commercial outcomes.

Critical Success Factors for Optimizing Value-Added Business. Use it to adresss the Root Causes of IT Projects Failures.

Critical Success Factors for Optimizing Value-Added Business

Improving value-add to the business can typically best be achieved by focusing practice effectiveness improvements on:
 Optimizing IT function alignment: optimizing the strategic alignment of the IT function with the business it serves (so they share common commercial goals).
 Optimizing competitive advantage: optimizing the identification of IT opportunities that will yield the highest business competitive advantage.
 Optimizing portfolio alignment: optimizing the alignment between the products of the IT function and the priority needs of the business units that they support (so they facilitate the business unit achieving its commercial goals).
 Optimizing portfolio value: optimizing the value (alignment/cost/benefit/risk) of the planned project portfolio.
 Optimizing value delivery: sustaining the value-adding imperative throughout the process of developing projects in the portfolio.
 Optimizing benefits realization: optimizing the realization of promised project benefits.

Use the above approach to address the most common root causes of IT Projects Failures:
 lack of senior management commitment [IT governance];
 unrealistic business case [Optimizing value delivery];
 failure to define clear benefits [Optimizing value delivery];
 failure to break complex projects into smaller projects [Optimizing value delivery];
 poor project management, planning and execution [Optimizing value delivery];
 poor change control [Optimizing value delivery];
 failure to undertake project reviews and take decisive action [Optimizing value delivery];
 inadequate user training [Optimizing benefits realization];
 failure to measure benefits delivered [Optimizing benefits realization].

Critical Success Factors for Optimizing Value-Added Business. Use it to adresss the Root Causes of IT Projects Failures.

Five Critical Success Factors and Top Ten Strategies for IT Transformation

Learn to Think Differently
It's so easy to fall into old, comfortable habits. There are six mindset and behavioral changes that must precede a successful leadership transformation:
Mindset Change 1: Force Yourself to Plan and Think of the Big Picture
Mindset Change 2: Adopt a Proactive Approach
Mindset Change 3: Resist the Temptation to Delve into Tactics
Mindset Change 4: Be Candid with Yourself and Others
Mindset Change 5: Prepare for and Embrace Change
Mindset Change 6: Anticipate, Understand, Respect and Work through Complexities

Five Critical Success Factors That Enable IT Organizational Excellence
1 Leadership: Lead by Positively Influencing and Inspiring Others
2 Strategy: Establish the Right Winning "Game Plan" for Your Organization
3 People: Hire and Professionally Develop Your Winning Team
4 Best Practices: Leverage IT Best Practices Right-Sized for Your Organization
Some best practice programs include:
 Business and Technology Plan Alignment
 Client Relationship Management
 Business Needs Assessment
 Performance Scorecards and Measurements
 Portfolio Management
 Project Management Office
 Risk Management
 Organization Change Management
 Business Case Development
 Selective Outsourcing
 Problem and Change Management
 Service Level Management
 Financial Management
 Vendor Management
5 Execution: Translate Your Strategy, Goals and Initiatives into Specific Action Plans That Deliver Measurable Results

Top Ten Leadership Strategies for Transforming Your IT Team
10. Prioritize time investment to deliver optimal results.
9. Build solid client relationships and strategies.
8. Effectively navigate politics and executive team dynamics.
7. Keep abreast of technology and business trends.
6. Think strategically while balancing tactics.
5. Align with the business.
4. Focus on results.
3. Keep promises.
2. Be resilient and effective under pressure.
1. Build trusting relationships.

Five Critical Success Factors and Top Ten Strategies for IT Transformation