1. IT Strategy, Governance, & Value
Strategy Governance
Leon A. Kappelman, Ph.D.
Professor of Information Systems
Director Emeritus, Information Systems Research Center
Fellow, Texas Center for Digital Knowledge
Information Technology & Decision Sciences Department
College of Business, University of North Texas
Website: http://courses.unt.edu/kappelman/
Email: kapp@unt.edu Phone: 940 565 4698
940-565-4698
Founding Chair, Society for Information Management Enterprise Architecture Working Group
© 1990-2011 L. A. Kappelman. All rights reserved. ITPMI, Philadelphia, 9-November-2011

2. Enterprise Strategy, Alignment, & Architecture
Enterprise
Governance
Enterprise Architecture
Strategy
St t
Goals/Objectives (e.g., Alignment)
IT Architecture
IT Projects

3. Assessment
&
Continuous Improvement
p
Basic Feedback Loop
•Measurement provides feedback about execution & performance.
•It tells us how the organization is doing against planned goals,
objectives, targets, milestones, outcomes, and values.

4. http://www.aprocessgroup.com/offerings/index.asp

5. Architecture? What’s that?
What s
Architecture “the set of descriptive
the
representations about an object”.
[John Zachman]
[J h Z h ]
Enterprise Architecture is “the
p
holistic set of descriptions about the
enterprise over time“. [SIMEAWG]
Enterprise Architecture is
modeling the enterprise.
g p

6. Why Enterprise A hi
Wh E i Architecture?
?
•If you can’t “see” it, then you can’t
effectively change it or manage it.
it
•If you can t “describe” it, then you
If can’t describe
can’t communicate about it.
•Especially if it’s complicated or big, or
will grow, evolve, or change at some
grow evolve
p
point in time.

7. EA is about the creation of a shared
language (of words, images, and so on) to
communicate about, think about, and
manage the enterprise.
If th people i the enterprise cannot communicate
the l in th t i t i t
well enough to align their ideas and thoughts
about th enterprise (
b t the t i (e.g., strategy, goals,
t t l
objectives, purpose, …),
then they cannot align the things they manage (e.g.,
applications, data, projects, goods and services,
jobs, vehicles, people, …). Nor can they
optimally govern, devise strategy, create value, …

8. Top IT Management Concerns 1980-2010
1980-
IT Management 2010 2009 2008 2007 2006 2005 2004 2003 1994 1990 1986 1985 1983 1980
Concerns
C
Business productivity & cost
1 1 7 4
reduction
Business agility and speed to market 2 3 13 17 7 5 7
IT and business alignment 3 2 1 2 1 1 1 1 9 7 5 2 7 9
IT reliability and efficiency 3 6
Business Process Reengineering 3 4 18 15 11 5 10 10 2
IT Strategic planning 6 7 3 8 4 4 4 2 10 3 1 1 1 1
Revenue generating IT innovations 6 8
THIS IS SYMPTOMATIC OF NOT SUFFICIENTLY
IT cost reduction 8 5 7 4
UNDERSTANDING THE “REQUIREMENTS”):
Security
Sec rit and privacy
pri ac
Globalization
“REQUIREMENTS”) 9
10
9
15
8 6 3 2 3 3 19 18 6 14 12
11 14 6 7 3 2 3 3 19 18 6 14 12
• SPECIFIC DETAILS OF A PARTICULAR
Change management
Outsou c g/ve do
Outsourcing/vendor management
a age e t 12 11
OBJECTIVE, ACTIVITY, AND/OR PROCESS.
Enterprise architecture
IT human resource considerations
13
13
11
17
11 33 15 15 9 8 4 1 8
13 17
• OVERALL CONTEXT – THE BIG PICTURE OF
Knowledge management
Project management 13 11 10 23 5 10
HOW IT ALL FITS TOGETHER.
Sourcing decisions
CIO leadership role
13 17
10 16 10
IT organization design
g g 15
• OR BOTH
Societal implications of IT 20

9. It’s not that we don’t govern, devise strategy, create
It s don t
value, build & run great ISs, and succeed.
• It s that we do so in a reductionist manner. Rather
It’s
than a holistic manner.
•An attempt or tendency to explain a complex set of
e p o e de cy o e p co p e se o
facts, entities, phenomena, or structures by another,
simpler set
p
•"For the last 400 years science has advanced by
reductionism ... The idea is that you could understand
y
the world, all of nature, by examining smaller and
smaller pieces of it. When assembled, the small pieces
p , p
would explain the whole" (John Holland).
• This leads to stovepipes, excessive complexity, dis-
pp , p y, dis-
integration, redundancy, high cost, and slow change.

13. “Governance”
Governance
of IS Departments
How do you organize for
IS/IT governance?

14. It starts with “Structure”
Structure
Organizational Structure of IS
Departments/Functions
IT department’s structure
p
reflects IT’s mission:
To manage technology for
the good of the enterprise.
h d f h i

15. Simplified IS Department Structure
CEO
CIO
User IT Communications IS
Support Personnel Development
Data IT Operations
IT Planning Administration
Other critical concerns:
• Project management office
• Chief Enterprise Architect
• IS Audit/Performance Measurement
• Legal
• Finance & accounting
y
• CyberSecurity y
• Organizational development/Change management
• Continuity (COOP), Disaster prevention & recovery
• ++++

16. Governance “Structure” of IS
G “St t ” f
I/T department’s governance
structure reflects I/T’s mission
fl I/T’ i i
too: To manage technology for
the good of the enterprise.
By having the business
“owners”
“owners” govern.

17. “Executive
CEO Steering
Committee”
Marketing/ Legal
COO CFO CIO HR Strategy
Sales Counsel
Technical Architecture/ IS Project
Operations Development Security
Service Standard Management
End user Data System
Support Administration Development
Program Application
Network
Maintenance Development
Data
Communication

18. What is an Enterprise?
Logical
L i l
Physical
Ph i l

19. LOGICAL
PHYSICAL

20. RESOURCES/
THINGS
BEHAVIORS/
ACTIONS

21. Things | Behaviors
|
|
|
Logical |
|
___________________________________________
|
|
Physical |
|
|
|
|

23. Strategist s
Strategist’s Vision
Business Model
B i M d l
Logical M d l
L i l Model
Physical Model
Technician/Contractor’s View
Functioning Enterprise

25. W H W W W W
H O H H H H
A W E O E Y
T ? R ? N ?
? E ?
?

27. I P S G
N O C
S F R H
O
E A
O R T D L
D F A A
L
U
L S
S
A T T
S E
S
/ &
T W R R
/
T
A U E I R
A C P M
O I U
R T
R N L
U G
E R
T S
E
S S
E

28. Architecture/Requirements
(
(Strategy, Design, & Plans)
gy g )
Project Management (Execution & Implementation)
Instantiation / O
I t ti ti Operations
ti
(Functioning Enterprise)

29. Strategy
gy
Execution

30. Zachman s
Zachman’s Framework for EA …
… is an ontology, a data model (schema) for all the
knowledge about the enterprise.
i
… is process and method agnostic. It doesn’t care how
you get the knowledge.
h k l d
… posits that if you want to be aligned, agile, optimized, or
whatever your enterprise design objectives, then these are
h t t i d i bj ti th
the data you must have and use in order to efficiently
and effectively:
• achieve those objectives;
• manage change and complexity;
g g p y;
• manage the enterprise & all its resources
including its technologies.
g g

31. http://zachman.com

32. By whatever means you get them, these are
the data you must have and use …
“holistic
holistic
reductionism
reductionism” –
decompose in
context
t t
http://zachman.com

33. Although I did say “governance starts with
structure” the most important dimensions of all
this are really leadership ( make it happen)
y p (to pp )
and organizational culture (to sustain it).
It’s all about becoming a Learning Organization,
“where people are continually learning to see the
whole together.” An organization characterized by:
• Holistic/systems thinking (big picture & connections)
• Team learning (collaboration)
EA • Shared mental models (shared language & models)
• B ildi shared vision ( h d goals)
Building h d i i (shared l)
• Personal mastery (working with great people)
(Peter Senge The Fifth Discipline, 1990)
Senge, Discipline

34. Some M d l and
S Models d
Theories about IT
Strategy,
Strategy
Governance,
Governance and
Value

35. Strategy
IT operations &
Resource Allocation service delivery

36. VA’s IT Governance Structures
VA Executive
Board Strategy
Culture Organizational Executive
Change Steering
Management Committee
Strategic Management
Council
Q
Quality
y
Office of
Cyber Security
Capital
Information Technology
I f ti T h l IT Steering
Board
Resource Investment Committee
Allocation Council IT Strategy
gy
Project Technical
Management
Office
EA Architecture Council Steering
g
Committee
IT project delivery Technology Architecture

38. IT Governance Institute – http://www.itgi.org

39. IT Governance Institute – http://www.itgi.org

40. ™
ISACA’s Val IT
• Many enterprises practice elements of Val IT™ already
• Val IT™ provides a consistent, repeatable & comprehensive approach
• IT and business become equal shareholders because Val IT™ helps management
to answer these key questions:*
The strategic question The value question
The architecture question The delivery question
* Based on the Four ‘Are’s as described by John Thorp in his book The Information © 2009 ISACA
Paradox, written jointly with Fujitsu, first published in 1998 and revised in 2003. All rights reserved.
40

41. ™
ISACA’s Val IT
© 2009 ISACA
http://www.isaca.org/ All rights reserved.

42. Strategy
“Alignment” &
Business
Architecture
Resource
Allocation
IT project delivery
Technology
Architecture

43. 5 key areas of IT decisions
Design objectives?
Structures, Processes, and Business Rules
Accountability and Assessment

44. IT Strategic Vision
Technology Strategy & Architecture
IT Strategic Alignment & Resource Allocation
g g
From Peter Weill “DON’T JUST LEAD, GOVERN: HOW TOP-PERFORMING FIRMS GOVERN IT” MIS
Quarterly Executive Vol. 3 No. 1 / March 2004, pp. 1-17.

45. From Peter Weill “DON’T JUST LEAD, GOVERN: HOW TOP-PERFORMING FIRMS GOVERN
IT” MIS Quarterly Executive Vol. 3 No. 1 / March 2004, pp. 1-17.

46. Strategy
Rs 1&2
Execution Rs 5&6

47. TM
ENTERPRISE ARCHITECTURE - A FRAMEWORK
DATA What
Wh t FUNCTION How
H NETWORK Where
Wh PEOPLE Who
Wh TIME When
Wh MOTIVATION Why
Wh
SCOPE List of Things Important List of Processes the List of Locations in which List of Organizations List of Events Significant List of Business Goals/Strat SCOPE
Planner s
Planner’s View
to the Business Business Performs the Business Operates Important to the Business to the Business
(CONTEXTUAL) (CONTEXTUAL)
Planner ENTITY = Class of Function = Class of Node = Major Business Ends/Means=Major Bus. Goal/ Planner
Business Thing Business Process Location People = Major Organizations Time = Major Business Event Critical Success Factor
e.g. Semantic Model e.g. Business Process Model e.g. Business Logistics e.g. Work Flow Model e.g. Master Schedule e.g. Business Plan ENTERPRISE
Owner s
Owner’s View
ENTERPRISE System
MODEL MODEL
(CONCEPTUAL) (CONCEPTUAL)
Owner Ent = Business Entity Proc. = Business Process Node = Business Location People = Organization Unit Time = Business Event End = Business Objective Owner
Reln = Business Relationship I/O = Business Resources Link = Business Linkage Work = Work Product Cycle = Business Cycle Means = Business Strategy
e.g. Logical Data Model e.g. Application Architecture e.g. Distributed System e.g. Human Interface e.g. Processing Structure e.g., Business Rule Model
SYSTEM
SYSTEM Architecture Architecture
MODEL
MODEL (LOGICAL)
(LOGICAL)
Node = I/S Function
Ent = Data Entity Proc .= Application Function (Processor, Storage, etc) People = Role Time = System Event End = Structural Assertion
Designer Reln = Data Relationship Cycle = Processing Cycle Designer
I/O = User Views Link = Line Characteristics Work = Deliverable Means =Action Assertion
e.g. Physical Data Model e.g. System Design e.g. Technology Architecture e.g. Presentation Architecture e.g. Control Structure e.g. Rule Design TECHNOLOGY
TECHNOLOGY
MODEL MODEL
(PHYSICAL) (PHYSICAL)
Node = Hardware/System Builder
Builder Ent = Segment/Table/etc. Proc.= Computer Function Software People = User Time = Execute End = Condition
Reln = Pointer/Key/etc. I/O = Data Elements/Sets Link = Line Specifications Work = Screen Format Cycle = Component Cycle Means = Action
DETAILED e.g. Data Definition
g e.g. Program
g g e.g. Network Architecture
g e.g. Security Architecture e.g. Timing Definition
g g e.g. Rule Specification
g p DETAILED
REPRESEN- REPRESEN-
TATIONS TATIONS
(OUT-OF- (OUT-OF
CONTEXT) CONTEXT)
Sub-
Contractor Ent = Field Proc.= Language Stmt Node = Addresses People = Identity Time = Interrupt End = Sub-condition Sub-
Reln = Address I/O = Control Block Link = Protocols Work = Job Cycle = Machine Cycle Means = Step Contractor
FUNCTIONING FUNCTIONING
e.g. DATA e.g. FUNCTION e.g. NETWORK e.g. ORGANIZATION e.g. SCHEDULE e.g. STRATEGY
ENTERPRISE ENTERPRISE
John A. Zachman, Zachman International (810) 231-0531

48. Simplified IS Department Structure
CEO
CIO
See P634(D)
Information
End user
End-user System
Personnel Support Communications Development
Data Operations
Admin istration
CQI/TQM Planning

49. Simplified IS Department Structure
+ Executive (“Planners & Owners”) Level
CEO
CFO COO HR CIO
See P634(D)
CLO S&M
Information
End user
End-user System
Personnel Support Communications Development
Data Operations
Admin istration
CQI/TQM Planning

50. Simplified IS Department Structure
+ Executive (“Planners & Owners”) Level
E ti (“Pl O ”) L l
BofD
CEO
CFO COO HR CIO
See P634(D)
CLO S&M
Information
End-user System
Personnel Support Communications Development
Data Operations
Admin istration
Ad i i t ti
CQI/TQM Planning

51. Simplified IS Governance Structure
+ Executive (“Planners & Owners”) Level
E ec ti e O ners”) Le el
CEO
CFO COO HR CIO
See P634(D)
CLO S&M
“Executive Steering Committee”
g
AND
“IT S
Steering C
i Committee”
i ”
BUT Not always combined into one structure:
Mostly a function of size and culture

52. VA’s IT Governance Structures
VA Executive
Board
Executive
Steering
Committee
Strategic Management
Council
Information Technology
I f ti T h l IT Steering
Board
Committee
Technical
EA Architecture Council Steering
g
Committee

53. TM
ENTERPRISE ARCHITECTURE - A FRAMEWORK
DATA What
Wh t FUNCTION How
H NETWORK Where
Wh PEOPLE Who
Wh TIME When
Wh MOTIVATION Why
Wh
SCOPE List of Things Important List of Processes the List of Locations in which List of Organizations List of Events Significant List of Business Goals/Strat
to the Business Business Performs
SCOPE
the Business Operates Important to the Business to the Business
(CONTEXTUAL) (CONTEXTUAL)
Planner ENTITY = Class of Function = Class of Node = Major Business Ends/Means=Major Bus. Goal/ Planner
Business Thing Business Process Location People = Major Organizations Time = Major Business Event Critical Success Factor
e.g. Semantic Model e.g. Business Process Model e.g. Business Logistics e.g. Work Flow Model e.g. Master Schedule e.g. Business Plan ENTERPRISE
ENTERPRISE System
MODEL MODEL
(CONCEPTUAL) (CONCEPTUAL)
Owner Ent = Business Entity Proc. = Business Process Node = Business Location People = Organization Unit Time = Business Event End = Business Objective Owner
Reln = Business Relationship I/O = Business Resources Link = Business Linkage Work = Work Product Cycle = Business Cycle Means = Business Strategy
e.g. Logical Data Model e.g. Application Architecture e.g. Distributed System e.g. Human Interface e.g. Processing Structure e.g., Business Rule Model
SYSTEM
SYSTEM Architecture Architecture
Designer’s Vi
D i ’ View
MODEL
MODEL (LOGICAL)
(LOGICAL)
Node = I/S Function
Ent = Data Entity Proc .= Application Function (Processor, Storage, etc) People = Role Time = System Event End = Structural Assertion
Designer Reln = Data Relationship Cycle = Processing Cycle Designer
I/O = User Views Link = Line Characteristics Work = Deliverable Means =Action Assertion
e.g. Physical Data Model e.g. System Design e.g. Technology Architecture e.g. Presentation Architecture e.g. Control Structure e.g. Rule Design TECHNOLOGY
TECHNOLOGY
Builder’s View
MODEL MODEL
(PHYSICAL) (PHYSICAL)
Node = Hardware/System Builder
Builder Ent = Segment/Table/etc. Proc.= Computer Function Software People = User Time = Execute End = Condition
Reln = Pointer/Key/etc. I/O = Data Elements/Sets Link = Line Specifications Work = Screen Format Cycle = Component Cycle Means = Action
Subcontractor’s View
DETAILED e.g. Data Definition
g e.g. Program
g g e.g. Network Architecture
g e.g. Security Architecture e.g. Timing Definition
g g e.g. Rule Specification
g p DETAILED
REPRESEN- REPRESEN-
TATIONS TATIONS
(OUT-OF- (OUT-OF
CONTEXT) CONTEXT)
Sub-
Contractor Ent = Field Proc.= Language Stmt Node = Addresses People = Identity Time = Interrupt End = Sub-condition Sub-
Reln = Address I/O = Control Block Link = Protocols Work = Job Cycle = Machine Cycle Means = Step Contractor
FUNCTIONING FUNCTIONING
e.g. DATA e.g. FUNCTION e.g. NETWORK e.g. ORGANIZATION e.g. SCHEDULE e.g. STRATEGY
ENTERPRISE ENTERPRISE
John A. Zachman, Zachman International (810) 231-0531

54. Simplified IS Governance Structure
BofD
CEO
CFO COO HR CIO
See P634(D)
CLO S&M
Information
End-user System
Personnel Support Communications Development
“Technology Steering Committee” Data Operations
Admin istration
Ad i i t ti
CQI/TQM Planning

55. Executive &
CEO IS Steering
Committee
PMO
Marketing/ Legal
COO CFO CIO HR Strategy
Sales Counsel
Technology
Steering
Committee
Technical Architecture/ IS Project
Operations Development Security
Service Standard Management
End user Data System
Support Administration Development
Program Application
Network
Maintenance Development
Data
Communication

56. Strategy
IT operations &
Resource Allocation service delivery

57. ESC
TSC
ITSC
From Peter Weill “DON’T JUST LEAD, GOVERN: HOW TOP-PERFORMING FIRMS GOVERN IT” MIS
Quarterly Executive Vol. 3 No. 1 / March 2004, pp. 1-17.

58. Empirical E id
E i i l Evidence
about
IT Governance

59. IT GAP Model
The theoretical model proposed in this research posits
direct and indirect effects among the three constructs
Organizational
g
IT Governance
Performance
IT –Business
Alignment
“TESTING A MODEL OF THE RELATIONSHIPS AMONG ORGANIZATIONAL PERFORMANCE, IT-
IT-
BUSINESS ALIGNMENT, AND IT GOVERNANCE” -- Aurora Sanchez Ortiz

60. IT GAP Model

66. IT Assessment - Implementation Guidelines
Measure performance toward objectives on a fair & consistent basis
across organization
Use a prototyping approach: In the early stages manage to speed rather
than
th quality (it is more important to get started than to have perfect data),
lit i i t tt t t t d th t h f td t )
and expect it to evolve rapidly.
Learn to work with “dirty” data, because the data will almost never be as
good as you’d like. But also learn how to assess data quality.
Focus on the harder job of integrating measures with the value-
generating actions than on establishing the information-delivery processes.
information delivery processes
Collect facts needed to demonstrate:
Goal and mission achievement
Effective resource utilization
ec ve esou ce u o
Resist the temptation of automation – it will distract you from more
important tasks.
Embrace learning & continuous improvement. Monitor, evaluate, and
improve on a continuous basis
Expand the use of metrics in IT to continuously improve systems
development and operations in order to better serve the needs of the
enterprise – Eat your own cooking!

67. EA Implementation Guidelines
Build on what you’re already doing (including projects).
Use collaborative approaches to doing & governing EA:
Organize an EA working group or EA council
council.
Learn together & work toward agreement about language, models, methods
Get participation & commitment from IT & business at all
levels (as high as possible). Leadership counts!
possible)
Determine the goals, focus, scope, and priorities:
Aim for completeness & comprehensiveness. Deal with day-to-day needs.
Embrace continuous change, learning, & communication:
change learning
Remember, it’s a journey and a process.
Evangelize. Have an “elevator speech”. Get your “converters” one at a time.
Start small and show early success. Then build on it.
Identify EA initiatives of most value to organization.
Help the value creators, it creates champions and wins hearts and minds.
Monitor, evaluate, and improve on a continuous basis:
, , p
Quantify the benefits
Regularly take a hard look at EA cost-value proposition, and make it better.
Use EA in IT for CONTINUOUS IMPROVEMENT and
COMMUNICATION WITH YOUR CUSTOMERS &
STAKEHOLDERS

68. “No one has to change.
g
Survival is optional.”
p
– Dr. W. Edwards Deming

69. SIM Guide to Enterprise Architecture
A project of the Society for Information
Management’s EA Working Group
(
(SIMEAWG). )
•Free shipping & 40% discount: buy at
http://www.crcpress.com with code 542KA.
•All author royalties go to further the work
of the not-for-profit SIMEAWG.
40% discount Edited by: Leon A. Kappelman, Ph.D.
code = 542KA Foreword by: Jeanne W. Ross, Ph.D.
Contributing Authors, Panelists, & Artists (alphabetically):
at
• Bruce V. Ballengee • George S. Paras
CRCPress.com • Larry Burgess • Alex Pettit
• Ed Cannon
C • Jeanne W Ross
J W. R
• Larry R. DeBoever • Brian Salmans
• Russell Douglas • Anna Sidorova
• Randolph C. Hite • Gary F. Simons
• Leon A. Kappelman • Kathie Sowell
• Mark Lane • Tim Westbrock
• Thomas McGinnis • John A. Zachman