063 Information Technology -- The Harshest Judge of Governance -- by Dr James A Robertson PrEng
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Transcript of 063 Information Technology -- The Harshest Judge of Governance -- by Dr James A Robertson PrEng
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http://www.jar-a.com
Dr James RobertsonChief Executive OfficerJames A Robertson and Associates
INFORMATION TECHNOLOGY GOVERNANCE AND STRATEGY SUMMIT
29 and 30 May 2007
JAR&AJAR&A(Copyright : JAR&A)
JAMES A ROBERTSON AND ASSOCIATESEFFECTIVE STRATEGIC BUSINESS SOLUTIONS
Information TechnologyThe Harshest Judge of Governance
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2JAR&AJAR&Ahttp://www.jar-a.com
Context -- what is strategy?
Governance is “care” -- I.T. failures will result in “Enron like” failures -- I.T. failure is at epidemic proportions
Why?
Computers are dumb adding machines -- they only do what they are told -- The Harshest Judge of Goverance
How involved should executive management be in I.T. Strategy?
How to strategically position information technology within your organization
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AGENDAI.T. THE HARSHEST JUDGE OF GOVERNANCE
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Appropriate, well implemented information technology applications can add substantial value
Sometimes they can add dramatic value
Such I.T. solutions can be delivered successfully
Such I.T. solutions can be delivered economically and in realistic time frames
Doing it right is cheaper than doing it wrong
Doing it wrong is always more expensive than the client organization can afford
As evidence of my conviction that dramatic success is economically attainable it is important to note that I have spent most of my career seeking ways of getting it right first time reliably and sustainably
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JAR&AJAR&A
POSITIONING THIS PRESENTATION
http://www.jar-a.com
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Engineers do NOT design bridges to stand up!
A CRITICAL PRINCIPLE FOR SUCCESSEngineer Against Failure
http://www.jar-a.com JAR&AJAR&A
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Engineers do not design bridges to stand up!
Engineer Against Failure
http://www.jar-a.com
They design bridges NOT to fall down!
JAR&AJAR&A
A CRITICAL PRINCIPLE FOR SUCCESS
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STRATEGY DEFINED
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STRATEGY DEFINED
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The essence of why an organization exists and how it thrives
JAR&AJAR&A
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STRATEGY DEFINED
DOING THE RIGHT THINGS
Professor Malcolm McDonald Cranfield School of Management
Professor Malcolm McDonald
http://www.jar-a.com JAR&AJAR&A
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TACTICS DEFINED
DOING THINGS RIGHT
Professor Malcolm McDonald Cranfield School of Management
Professor Malcolm McDonald
http://www.jar-a.com JAR&AJAR&A
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Strategy
Tac
tics
Doing The Right Things
Doi
ng T
hing
s R
ight
Effectiveness
STRATEGY vs TACTICS : A DEFINITION Professor Malcolm McDonald
http://www.jar-a.com JAR&AJAR&A
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Strategy
Tac
tics
Thrive
Doing The Right Things
Doi
ng T
hing
s R
ight
Effectiveness
Professor Malcolm McDonald
http://www.jar-a.com JAR&AJAR&A
STRATEGY vs TACTICS : A DEFINITION
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Strategy
Tac
tics Survive
Thrive
Doing The Right Things
Doi
ng T
hing
s R
ight
Effectiveness
Professor Malcolm McDonald
http://www.jar-a.com JAR&AJAR&A
STRATEGY vs TACTICS : A DEFINITION
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Strategy
Tac
tics
Survive
Thrive
Die
Doing The Right Things
Doi
ng T
hing
s R
ight
Effectiveness
Professor Malcolm McDonald
http://www.jar-a.com JAR&AJAR&A
STRATEGY vs TACTICS : A DEFINITION
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Strategy
Tac
tics
Survive
Thrive
Die Slowly
DieFast
Doing The Right Things
Doi
ng T
hing
s R
ight
Effectiveness
Professor Malcolm McDonald
http://www.jar-a.com JAR&AJAR&A
STRATEGY vs TACTICS : A DEFINITION
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Strategy
Tac
tics
SurviveDie Slowly
Die Fast
Doing The Right Things
Doi
ng T
hing
s R
ight
Thrive
Effectiveness
Professor Malcolm McDonald
http://www.jar-a.com JAR&AJAR&A
STRATEGY vs TACTICS : A DEFINITION
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STRATEGY DEFINED
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What is the essence of why your organization exists and how it thrives?
JAR&AJAR&A
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17http://www.jar-a.com
CONTEXT: INFORMATION TECHNOLOGYGOVERNANCE DEFINED BY KING
Governance = Care!
How does this company make money? What are our competitors doing? What can destroy our business? More satisfied employees. More Capital.
I.T. -- should we take something like COBIT and enforce or have certified managers?
Board is responsible for I.T. Systems and does it have effective control, part and parcel of strategic view.
Ultimate responsibility is business success. Balance conformance and performance. Legislation is NOT the recipe for good governance. Increased cost of running the business.
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Presentation on “I.T. Governance” to the I.T. Governance and Strategy Summit on 22 August 2006 by Professor Mervyn King SC, former High Court Judge and
author of the King reports on Corporate Governance. Free hand notes taken by J Robertson during the presentation.
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“This [I.T.] is an area where boards of directors will be named in stockholder suits”
“Senior management is not engaged enough in strategic information technology decisions and situations that could put the company at risk.“
"Information systems could cause the next outbreak of Enron-like corporate scandals.“
"I.T. is the next corporate disaster waiting to happen”
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“Creating an IT Watchdog for the Board by Assembling an I.T. Oversight Committee” presented to the I.T. Governance and
Strategy Summit by Professor Rossouw von Solms of Nelson Mandela Metropolitan University quoting Richard Nolan of
Harvard Business School in Harvard Business Review
CONTEXT: INFORMATION TECHNOLOGYGOVERNANCE
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19http://www.jar-a.com JAR&AJAR&A
Major I.T. Write-OffsAfter spending seven years and close to half a billion dollars implementing a mainframe E.R.P. system, the Dow Chemicals Co stopped and started over with a client-server versionNike -- $400 million against their supply chain management systemDisney -- $878 million against its go.com web portalKmart -- $195 million against supply chain hardware and softwareGateway -- R143 million against I.T. projects no longer fitting its strategy
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“Creating an IT Watchdog for the Board by Assembling an I.T. Oversight Committee” by Professor Rossouw von Solms of Nelson Mandela
Metropolitan University at the I T Governance and Strategy Summit
CONTEXT: INFORMATION TECHNOLOGY
“I.T. Efficiency and Effectiveness are Waning”
"85% of problems are caused by I.T. changing something”
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3.“Achieving I.T. Governance Through Service Management and
Transformation” by Alkesh Patel, IBM Global Technology Services speaking at the IT Governance Summit
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CONTEXT: INFORMATION TECHNOLOGYAN INDUSTRY CHARACTERISED BY FAILURE
Seventy percent of I.T. investments fail TOTALLY
Another twenty percent fail to fully satisfy the original business requirement
"19 out of 20 E.R.P. implementations do not deliver "what was promised"
Ninety percent of strategic plans fail
Seventy percent of B.P.R. investments fail
"Most organisations are not making better decisions than they did five years ago."
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JAR&AJAR&A
McLeod (FM)
Gartner
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THE HARSHEST JUDGE
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Why?
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Information technology mythology (30%)
Lack of executive custody and inappropriate policies (20%)
Lack of strategic alignment (15%)
Lack of an engineering approach (12%)
Poor data engineering (10%)
People / soft issues (8%)
Technology issues (5%)
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CAUSES OF INFORMATION TECHNOLOGY INVESTMENT FAILURE
65%
The first three require quality decisions and limited time
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Dramatic failures, litigation and legislation (5%)
Software company shake outs (6%)
Long software product life spans (7%)
Less is more (10%)
Executives take custody (20%)
Emphasis shifts to decision support (22%)
Corporate level solution innovation (30%)
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WHERE IN THE WORLD IS I.T. GOING?WHERE SHOULD WE FOCUS OUR ATTENTION?
(c)
Radical redefinition of the industry
A challenging and exciting place to beLeading edge technology mothballed
Run of the mill technology = worlds
most successful aircraft
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Buildings stand up, aircraft fly, ships float, machines work, motor vehicles operate, houses keep out the weather, etc
Expect the same level of reliability from I.T.
A successful solution is one that does NOT FAIL
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MANAGEMENT FOR SUCCESSFOUNDATIONS OF THE APPROACH
JAR&AJAR&A
Success = getting to "NOT failure"
Reliably -- AND people know how to use them effectively and profitably
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25JAR&AJAR&Ahttp://www.jar-a.com
THE CRITICAL FACTORS FOR SUCCESS
Executive Custody (25%)
Strategic Solution Architecture (18%)
Strategic Alignment (16%)
Business Integration and Optimization (14%)
Programme and Project Management (12%)
Data Engineering / Information Management (10%)
Technology Components (5%)
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59%
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COMPONENTS OF ACHIEVING EXECUTIVE CUSTODY
Engagement
Leadership
Prove it works
Make it work
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Executive Custody is an attitude, a state of mind, NOT a large amount of work
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Creating and delivering value to customers
Differentiating from competitors
Motivating and leading personnel
Meeting and exceeding owner expectations
Building exceptional partnerships with suppliers
Integrating and optimizing the business
Day to day operational efficiency and effectiveness
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CRITICAL FOCUS AREASOF EXECUTIVE CUSTODY
5%?
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Computers Switch / Add 0's and 1's (bits)
ASCII
Computer Processors are Machines
Programmes and Data Stored in Memory (RAM) as a Stream of 0's and 1's (Absolute and Relative Addressing)
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COMPUTERS ARE ADDING MACHINES / SWITCHES
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ESSENTIAL TECHNOLOGY KNOWLEDGE
everything --> 10011010... 01100111000101
0
1
0
1
"carriage return" = 013 = 0D hexz = 112 = 7A hex
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Development Languages Translate Human Language to 0's & 1'sLike automated bricklayer
setting switchesModular software structureReusable building blocks
Computer does NOT know what language was used
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COMPUTERS ARE ADDING MACHINES / SWITCHES
JAR&AJAR&A
ESSENTIAL TECHNOLOGY KNOWLEDGE
01100111000101
0
1
0
1
IF(X=1, THEN Z, ELSE B) --> 011110101010101...
0
1
it is the POSITION of the switch that matters
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Computers Are Predictable ("Stupid")
The Challenge of Abstractness "Invisibility"
Humans Provide Input and Interpret Output
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COMPUTERS ARE ADDING MACHINES / SWITCHES
JAR&AJAR&A
ESSENTIAL TECHNOLOGY KNOWLEDGE
01100111000101
10011010... 10011010... --> ABC
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EXECUTIVE INVOLVEMENT
http://www.jar-a.com JAR&AJAR&A
How involved should executive management be in I.T. Strategy?
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EXECUTIVE INVOLVEMENT
http://www.jar-a.com
How involved should executive management be in business strategy?
JAR&AJAR&A
How involved should executive management be in I.T. Strategy?
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EXECUTIVE INVOLVEMENT
http://www.jar-a.com
How involved should executive management be in business strategy?
JAR&AJAR&A
Executive Custody is an attitude, a state of mind, NOT a large amount of work
How involved should executive management be in I.T. Strategy?
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34JAR&AJAR&Ahttp://www.jar-a.com
Determine why your organization exists and how it thrives -- one sentence -- and then core drivers and strategic map
Determine where I.T. is getting in the way
Modify accordingly
Determine where I.T. can be used by BUSINESS PEOPLE as a tool to assist the business in its endeavours to thrive
Procure or modify accordingly
Communicate a clear intention -- leadership
Make it work -- this is a business action
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HOW TO STRATEGICALLY POSITION I.T.THE ESSENCE OF I.T. INVESTMENT SUCCESS
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35JAR&AJAR&Ahttp://www.jar-a.com
Determine why your organization exists and how it thrives -- one sentence -- and then core drivers and strategic map
Determine where I.T. is getting in the way
Modify accordingly
Determine where I.T. can be used by BUSINESS PEOPLE as a tool to assist the business in its endeavours to thrive
Procure or modify accordingly
Communicate a clear intention -- leadership
Make it work -- this is a business action
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HOW TO STRATEGICALLY POSITION I.T.THE ESSENCE OF I.T. INVESTMENT SUCCESS
Clear, concise, intuitive, cognitive thinking,
communication and action by business executives -- the
rest is grind by the business including the I.T. team
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Bad I.T. decisions can wreck your business
I.T. Strategy is a BUSINESS responsibility
I.T. Strategy is NOT about technology policy it is about business initiative
Definition of strategy should be a concise, high intensity, business executive activity
I.T. is a collection of tools and tools should work all the time
I.T. will harshly judge executives who abdicate responsibility
There is a huge opportunity for creative thinking to define concise ways for I.T. to add REAL VALUE in your organization!
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CONCLUSION
THE HARSHEST JUDGE OF GOVERNANCE
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ACKNOWLEDGEMENTSAND DEDICATIONI would like to acknowledge
the contributions and inputs of all my clients, associates, staff and families without whom the work on which this presentation is based would not have
been possible
Particularly my father and mother, Angus and Thelma, whose love and support for all my endeavours made it possible for me to gain this
knowledge and to Sandra and Helene for their unreserved love and giving
This presentation is dedicated toThe Glory of The Eternal Creator
who is the source and reason for our existence
JAR&AJAR&Ahttp://www.jar-a.com
Psalm 136:5 "To Him who by wisdom made the heavens, for His mercy endures forever;"
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38JAR&AJAR&Ahttp://www.jar-a.com
What are the (three) most important insights you gained from this presentation?
What are the (three) most important actions you propose arising from this briefing?
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CALL TO ACTIONSOME QUESTIONS TO CONSIDER
Make notes
If you gain an insight into something new and do not take some action within48 hours the chances are you never will ... attributed to Bill Gates
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QUESTIONS ?
James A Robertson & AssociatesTel +27-11- 782-5997 / 083-251-6644
P O Box 4206, Randburg, 2125, South Africa
http://www.jar-a.com
I.T. THE HARSHEST JUDGE OF GOVERNANCE