CFO VISION 2014 Navigate your world...Management Gate (ad-hoc – unscheduled) Propose ideas to...

November 19–21 | Washington, D.C.

CFO VISION 2014

Navigateyour world

PrincipalDeloitte Consulting LLP

Bob Comeau

Does information technology deliver the value you want?

Khalid KarkResearch Director, CIO ProgramDeloitte LLP

Ajit KambilGlobal Research Director, CFO ProgramDeloitte LLP

Copyright © 2014 Deloitte Development LLC. All rights reserved.

The CFO/CIO relationshipGovernanceArchitectureWhat is next?Q&A

Agenda

2


The CFO/CIO relationship

What makes managing IT hard (i.e., can this relationship be saved?)

Targeting relevant information to track

Agreeing on appropriate technology investments

Instituting appropriate IT governance

Assessing current and future technologies

1

2

3

4

5

Establishing a common language to discuss projects

6

3

CFOs Play Four Critical Roles in Companies

Provide financial leadership in determining strategic business direction, M&A, financing, capital market and longer term strategies vital to the future performance of the company

Balance capabilities, talent, costs and service levels to fulfill the finance organization’s core responsibilities efficiently

Protect and preserve the critical assets of the organization and accurately report on financial position and operations to internal and external stakeholders

Catalyze behaviors across the organization to execute strategic and financial objectives while at the same time creating a risk intelligent culture

5 WB

S11

111-

Pre

z-D

ate

Four Faces of the CIO Role

CIO

Shared Focus

Value

Risk

Talent

TECHNOLOGISTDesign and architect tech environment to manage complexity and provide insight and define appropriate governance

STRATEGISTInnovate and contribute to developing new sources of business value

OPERATOROperate and deliver efficient IT services and solutions to support the business while managing security and protecting core assets

CATALYSTDrive complex transformational initiatives in alignment with business goals



Agenda

6


IT Governance Business Technology

Strategic governance

Operational governance Technical governance

Focusing on “what” and not on “how” or “whom”• Vision• Investment• Strategic direction • Risk appetite

Ensuring that activities are performed in accordance with strategic objectives• Performance• Efficiency• Capability• Resources

Aligning technology capabilities to strategic objectives • Application• Security• Data• Process

7


Business Technology Governance Model

8

Bus. Divs. Corp. ITG Int. Audit Other

Sources of ITG Demand

PMO

• Set vision/direction for technology investments • Integrate technology in business strategy• Define risk appetite• Prioritize among investment choices• Monitor results and course correct as appropriate

• Evaluate/approve business case and project proposals• Monitor program and project management activities• Ensure successful execution of projects• Provide/approve resources (people/funding)• Monitor risks, capabilities, and benefits

• IT strategy, planning and budgeting• Facilitate IT decisions• Govern enterprise architecture • Monitor and manage IT procurement• Provide QA and regulatory oversight

Technology Governance Model Roles and responsibilities

Demand

Each governance body has specific roles and responsibilities in support of IT Governance.

Program Management Office (PMO)• Co-ordinate the development of project proposals (IT and program sponsors)• Program and project management• Facilitate cross project communication• Co-manage the IT portfolio with IT strategy, planning, and budgeting

Arch.IT

Strategy & Plng.

Quality Assur.

Develop-ment

Technical Governing Bodies

Operational Governance Council

BT Steering Committee


IT Governance decisions

9

Given the definition and essential components noted on the previous pages, these are some of the likely decisions that will have to be taken by the IT Governance function.

Governance decisions

• What business outcomes are we trying to achieve?• What possible strategies and investment choices exist?• What are the risks and rewards, and how can they be measured/quantified?

Strategy

• What initiatives need to funded based on strategy?• What technology investments will be appropriate to make the initiatives successful?Investment

• What are the risks for achieving strategic objectives?• How can the risks be quantified, measured, and managed? Risk

• Where does the organization want to be in the short run and long run?• What cultural values are important to achieve the vision?• What are the major goals and objectives that need to be achieved?

Vision

• What decision structures exist to facilitate efficient decision making?• What parameters should be used to measure success?• How should the organization ensure course corrections take place?

Measurement

Key areas Specific questions


Technical Governance Bodies

10

Architecture Design Council Develop and maintain the Enterprise Architecture

Development Development Review Board Review proposed developments against the EA

ProjectsProgram Board

Project Board

Monitor progress across projects in a program

Monitor project progress

SecuritySecurity Council

Disaster Recovery/Business Continuity Board

Develop and maintain the security policies

Develop and maintain IT’s DR plans and inputs to overall BC plans

Service management

Service Review Board

Vendor Performance

Change Advisory BoardCustomer Service Performance Review Board

Monitor performance of the operational delivery of IT service

Monitor vendor performance (individually and collectively)

Approves changes to operational systemsPerformance review meetings with customers

Strategy

Portfolio Planning Board

IT Strategy Review BoardIT Standards Review Board

IT Quality Review BoardIT Resource Planning Board

Prioritize and approve new projects

Develop and maintain the IT strategyReview completeness and necessity for IT standards

Monitor overall IT qualityDevelop and maintain IT resource plan


Portfolio management from technology investments

11

incomplete business cases are delayed in the

process and can’t pass this gate

Projects not approved –

didn’t fit Business Unit

direction

IT Governance must manage the enterprise IT portfolio by refining and funneling IT opportunities.

Input business opportunities

Develop business cases

Pass IT Governance Council project approvals

Pass IT Executive Steering Committee

project approvals

Plan and launch approved projects

Business Division Management Gate

(ad-hoc – unscheduled)Propose ideas to internal

Business Unit management

IT Governance Council Gate

(monthly meeting)Review and

recommend projects to Steering Committee

$

Potential projects

Funded projects

PMO Gate (ad-hoc – unscheduled)

Refine business cases and submit to PMO – cases

must be complete to pass

IT Executive Steering Committee Gate

(quarterly meeting)Approve and fund

moderate/major projects

Projects not approved – didn’t fit enterprise direction (e.g.,

high risk, insufficient business benefit)

Projects not approved – didn’t fit enterprise direction (e.g.,

high risk, insufficient business benefit, not aligned with

strategic vision)

Strategic initiatives



Agenda

12


Systems of engagement define future architecture

Source: “Brief: Systems Of Engagement Take Center Stage;: Forrester Research, Inc., May 2014.

13

LC3

LC3 Can you fix spacing?Calabro, Lori, 11/17/2014


Architecture focuses on business value

Source: “The State Of EA 2014: New Demands, Same Headcount;” Forrester Research, Inc., October 2013.

14

LC4 Can you fix spacing?Calabro, Lori, 11/17/2014


Technology forces create opportunities for value

15

LC5 Can this source block be moved down?Calabro, Lori, 11/17/2014


Context becomes key

Source: February 13, 2012, “Mobile Is The New Face Of Engagement” Forrester report

16

LC6 Can this source be in the same type and position as on previous slide 11/12?Calabro, Lori, 11/17/2014



Agenda

17


What next? The future is already here, it’s just unevenly distributed….

18

Publishing and Transactional Web

The Social and User Generated Web

Big Data and the Analytic Web

The Internet of Things

Considerate Computing 2.0

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IT Governance overview: Definition

Align IT Investment to

business performance improvement

Align IT investment

to business strategy and objectives

Build decision making transparency and

understanding

Establish and enforce accountability for business and IT

projects

Involve key business

stakeholders

Process, participation, and

timing

Essential componentsIT Governance goals

ReinforcementManage IT-related

risks

Organizational goals

engaging and aligning business

leadership

Build current and future stakeholder

value

an acceptable level of risk

at

Establish and enforce accountability for business and IT

operational performance

Authorities, structure, and accountability

Targets and results

by

IT Governance: The organized capacity to guide the formulation of IT strategy and plans, direct and/or control the development and implementation of initiatives, and oversee IT operations in order to minimize risk, maximize return, and build current and future value.

This can be represented pictorially as shown below

20

LC7 Fix?Calabro, Lori, 11/17/2014


IT Governance: Maturity stages quick assessment

21

The level of maturity of an IT organization in terms of IT Governance can be assessed, simplistically, with the following grid:

DIMENSIONS

AProcess

BRoles

C

Tools and technology

D

Performance measures

Stage INonexistent

Stage IIDeveloped

Stage IIICommunicated

Stage IVIntegrated

Stage VMonitored

IT Governance strategy does not exist or is limited. Little or no formal policies or procedures are employed.

IT Governance strategy is developed, but not formally communicated or updated.

IT Governance strategy is communicated and ratified in all areas of the organization and policies and procedures are known and followed.

Formalized IT Governance strategy and relevant policies and procedures are well understood by the IT organization and are fully integrated into day-to-day procedures.

IT Governance strategy is broadly developed and integrated encompassing corporate vision and strategy. Performance of IT projects is monitored, as are governing processes in order to optimize IT value and manage risk.

IT Governance processes are not defined or deployed.

Core IT Governance processes and goals are defined. There is no standardized process review, regular communication process, or review of portfolio of initiatives.

All IT Governance processes and goals are defined, documented, communicated, and implemented. Portfolio of IT initiatives is reviewed once at the beginning of the fiscal period.

IT Governance processes and goals are integrated and aligned with the rest of the enterprise. Portfolio of IT initiatives is reviewed for the approval process of major projects.

IT Governance processes are continually improved to integrate best practices. Approval of proposed programs requires a review of the current portfolio of IT initiatives. IT and Business leadership review the portfolio of IT initiatives in order to balance growth and innovation versus operations.

IT Governance structure, roles and responsibilities not defined, or informally defined.

Structure, roles and responsibilities defined. IT Governance team has some permanent members, with a loss of continuity and commitment inherent in the turnover of short-term members.

Permanent staff accountable for IT Governance. Effective IT Steering Committee is formed. Responsibilities and accountability of the Governance and Steering Committees are clearly defined and documented.

Dedicated IT Governance team. Succession and career planning in place.

Dedicated IT Governance team committed to revisiting and improving the structure, roles, and responsibilities based on business requirements and changes in the portfolio of IT initiatives.

No tool or technology supporting IT Governance.

Basic non-standardized ad-hoc analysis triggered by an imminent business need.

Standard templates and analysis framework used for: some processes, key performance indicators, and recommended definition of the IT Governance structure.

Integrated enterprise-wide analysis toolkit aligned with enterprise strategy deliverables. Standard templates and analysis framework used for all key IT Governance deliverables.

Business intelligence software in use. There is optimal use of technology to support selection, approval, measurement, analysis, and communication.


Governance and innovation

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