The Development and Implementation of an IM/IT Governance Framework
Bryan Shane and Patricia Lafferty
Wisdom in IT decision making is the acid test for effective governance.
In most public sector organizations, Information Management/Information Technology (IM/IT) plays a vital role in the delivery of key programs and services. Many program branches spend millions of dollars on IM/IT initiatives. Approximately half of all government capital expenses along with the associated FTEs (full-time equivalents) are allocated to IM/IT to enable the business vision to be achieved. Yet many of the processes and best practices needed to ensure the most effective use of these resources are not fully implemented. As a result, there is much duplication of effort; decisions regarding the allocation of IM/IT resources are not made from a branch- wide perspective; and some of the applications under development are behind schedule, over budget and not to the satisfaction of clients. The return on investment for the IM/IT funds spent leaves much to be desired.
To maximize the contribution of IM/IT in the delivery of federal public sector programs and services, there is a need to enhance the effectiveness and expediency of decision making through a more effective IM/IT governance framework. Effective IM/IT governance will ensure all IM/IT initiatives are managed from an organization-wide perspective and contribute to the business goals of the public sector organization.
Elements of an IM/IT governance framework
A governance framework includes three elements: principles by which to work, a structure through which to govern and a process to make it work.
Governance principles
To be used effectively, the IM/IT governance framework must adopt the following principles of operation:
- All IM/IT initiatives considered must support the long-term business goals of the department and be based upon long-term IM/IT strategies. Business and IM/IT must work together.
- All new IM/IT proposals must be supported by a business case addressing the priorities as negotiated and established in the informatics strategic and operational plans.
- All IM/IT initiatives are subject to the governance process, including those related to application development, infrastructure modifications, major projects and/or purchases of hardware or software.
- The IM/IT governance process must be as simple and efficient as possible to provide maximum assurance of the relevance and importance of informatics initiatives, yet not unduly delay their initiation.
- The IM/IT governance process must interact effectively with departmental operational and strategic planning processes.
- The framework must support existing IM/ITÂ policies, standards and guidelines.
Governance structure
For IM/IT governance to be effective, there must be a structure in place that allows maximum participation while ensuring sound decision-making practices. The roles and responsibilities of the major stake holders in the IM/IT governance decision-making process are described below.
The Management Committee (MC) is the executive committee of the program branch. The MC is ultimately responsible for setting the business directions for the branch. It is the ultimate decision-making authority on all IM/IT issues, approving the branches’ IM/IT strategic direction and priorities, and approving the overall IM/IT budget and initiatives. Its key responsibility is to approve specific IM/IT projects, including funding and human resourcing.
The Information Management Committee (IMC) includes representatives from the informatics organization, the program branch and the regions. This committee recommends most major decisions related to IM/IT investments in the branch to the MC based on a thorough review of the business case.
In addition to these committees, the governance structure centers on several key organizations within the department. One of these, the Information Management Organization (IMO) is the user organization charged with assessing IM/IT needs, completing and updating an IM/IT operational plan, and assessing and addressing associated risks. It monitors projects that are underway and resolves problems related to individual projects or multi-project priorities.
In addition, it coordinates all IM/IT initiatives and provides quarterly status reports on all IM/IT initiatives to MC. It also maintains, monitors and reports on the central IM/IT budget and recommends allocation of funds to IMC. In addition to these, each IM/IT project has a steering committee. The steering committee’s role is to oversee the work of the project team, ensure that the project remains on schedule and within budget, and keep the project in sync with the business requirements it is meant to address.
Governance process
This framework proposes a seven-step process for launching new IM/IT initiatives within the branch or department. The best way to illustrate this process is to present the steps in sequence, as they would apply to a new candidate initiative. (See the Appendix, page 10, for a graphic illustration of the governance process.)
Project proposal development
Anyone in a program branch may conceive of an idea for a new IM/IT project. The first step is to enlist a senior manager willing to act as a project sponsor should the project be approved. The idea must be documented in a standard project proposal format, a brief two-to-three page document outlining the opportunity/problem, the project’s objectives and scope, and the expected benefits. The project proposal format and content are further described in the Governance tools section (see page 6). The proposal is submitted to IMO which reviews it against a number of criteria, including its alignment with the business and IM/IT directions of the branch/department. IMO forwards those ideas that are promising to IMC for further consideration.
Project proposal approval
IMC can either give the project proposal the go-ahead to proceed to business case development or reject it with reasons. Rejected proposals may be amended and resubmitted.
Business case development
The next major step in the approval process is the development of a business case. The business case uses a standard format to provide the information necessary from a business and technological point of view that will lead to IMC approval. The business case presents a detailed examination of the opportunity or problem, the project’s objectives and scope, the estimated cost, benefits and risks. The format and content of the business case are further described under the Governance tools section (see page 6).
The project sponsor assigns a project manager (PM) to prepare the business case. A subject matter specialist (SMS) can also be assigned to assist the PM in this. The departmental informatics organization also assists in preparing the business case by providing a preliminary determination of possible technical solutions.
Business case approval
Once the project sponsor has reviewed and approved the business case, it is submitted to IMC. Then IMC reviews it to ensure that it aligns with the business vision and strategic IM/IT priorities of the branch and department, and that its overall budget and timing are reasonable. Business cases meeting these criteria are recommended for approval to MC. Such approval establishes the IM/IT initiative as an official project, with a budget only for the next phase, that is, for user requirements/technical solution development. From this point on, budgets are approved only on a stage-by-stage basis. This project management discipline is used as the primary engine in the governance process to ensure the relevance and success of the initiative.
User requirements/technical solution development
Approval of the business case is tacit approval to proceed to the next stage – user requirements/technical solution development. A project team composed of a technical and a user project manager is assembled. The user project manager documents all required business functionality in a User Requirements Report. The technical project manager, from the departmental informatics organization, focuses on defining the best technical solution for the client, assessing the proposed solution against operational, support and maintenance implications and against departmental standards and architectures. Where the appropriate technical solution has serious implications on the departmental IM/IT infrastructure, it is the responsibility of the technical project manager to obtain the necessary approvals from the departmental informatics organization. This information is documented in the Technical Solution Report. Together the user project manager and the technical project manager also produce the project plan and budgets (which include class B estimates).
User requirements/technical solution approval
Approval of the user requirements must be obtained from the project sponsor, and approval of the technical solution must come from the departmental informatics organization. Once these approvals are obtained, the proposed solution and accompanying project plan/budget are submitted to IMC for approval. IMC may accept, reject or insist on revisions to this plan and budget. IMC approval means that the project plan and budget are forwarded to MC, which also has the right to reject, approve or revise it. If MC’s decision is positive, the project then proceeds to its remaining stages.
Project implementation
The final stage in this governance process is the implementation work that leads to completing the project and deploying the resulting solutions. This may involve augmenting the project team as required.
Throughout the project, IMO and the project sponsor review and assess functional and technical progress and adherence to budget monthly and at the completion of each remaining stage. Lack of progress or significant deviations from the project plan will result in corrective action being recommended to IMC and/or MC.
Selection criteria
Implementing this governance process on an ongoing basis requires clear criteria to determine where and when it should be applied. It is suggested that it should apply to IM/IT initiatives that meet the following criteria:
- The initiative is not included in the department or branch business plan and is not funded (the assumption being that those initiatives that have made it onto the departmental plan have already been approved through the annual governance and planning cycle).
- The initiative is not included in departmental IM/IT plans and strategies.
- The cost of the initiative exceeds a specific value (such as $50K), based upon a class B estimate,
- The project is national in scope and/or involves at least two regions.
- The project will impact corporate information/data administration.
- The project does not use departmental standard and supported products according to approved usages.
- The project is likely to have an appreciable effect either on the departmental infrastructure, or operation’s support or maintenance.
IM/IT initiatives, which are “stand-alone” in nature, do not involve the sharing of data and are not subject to the governance process.
IM/IT governance development and implementation process
To realize the full benefits of an IM/IT governance framework in program branches, a number of requirements must be met to provide improved direction and more cohesion to the operation and use of the governance process.
Policy requirements
There are a number of underlying policies required to make this framework an effective tool:
- The governance framework must be understood, supported and used by all relevant stake holders submitting IM/IT initiatives for consideration.
- All new IM/IT initiatives are subject to the process as specified in the selection criteria.
- The status of all IM/IT approved initiatives must be reviewed on an ongoing basis to ensure their continued relevance and progress.
- All relevant IM/IT investments made without using the governance process must be suspended and processed through governance.
- The governance process must interact with existing strategic and operational planning and other processes within the department.
- A clearly worded policy statement from management reinforcing these principles would provide the authority and guidance needed to implement and effectively operate a governance framework in the program branches.
Structural requirements
In many programs there is no central focus or control of IM/IT responsibility. As a result, there may be no effective IM/IT planning at the strategic or operational level. This results in projects not being delivered on time or within budget or to the satisfaction of clients. Financial resources will have been spent on IM/IT initiatives without an effective return on investment. Informed decisions about IM/IT investments may have been lacking. Some program areas may be making investment decisions without a full appreciation of the business or technical consequences.
To rectify this situation and to professionally manage IM/IT resources in the branch, responsibility for all IM/IT functions must be clearly defined and consolidated in the new user informatics organization. IMO responsibilities include operational planning, implementation and operation of the governance framework, budget monitoring/reporting, project oversight and change management. As well, the reporting relationship of the new organization must be finalized. Due to the importance of IM/IT as an enabler of programs and services, the direct reporting relationship to the Assistant Deputy Minister (ADM) should be established.
Planning requirements
The completion and approval of the strategic information management plan is needed to provide the vision and direction for IM/IT initiatives required to achieve the business vision for the program branch. The completion of this plan provides the priority and sequence of IM/IT initiatives needed to support the business vision. It also provides the means of assessing the relative importance of the many IM/IT proposals that are being evaluated through the governance process.
Proactive identification of IM/IT needs will help to ensure the availability of informatics resources, improved service and the likelihood that projects will be delivered on time, within budget and to the satisfaction of clients. The use of ad hoc methods to assess, plan and carry out major IM/IT projects greatly increases the likelihood that serious problems will be encountered.
Budget requirements
One of the key requirements for the improvement of the governance process is controlling the annual IM/IT budget to ensure that informed investment decisions which support the business vision of the program branch are made. This will ensure that investment decisions are made from a long-term perspective, with knowledge of the consequences from a business or technological perspective.
Monitoring and reporting on an IM/IT budget, along with the power to recommend adjustments, will provide the control necessary to ensure that all IM/IT investment decisions benefit the branch as a whole. It will also help to provide an effective return on the investment of IM/IT funds. Once an IM/IT initiative has been approved through the governance process and becomes an official project, the funding is allocated and becomes the responsibility of the project sponsor and the project manager.
Business process requirements
A number of best practices need to be implemented across the program branch to ensure the effective operation of the governance framework. These best practices include:
- IM/IT initiative assessment – An integral element of the governance process is the accurate assessment of all IM/IT initiatives to determine their merit and relevance. Two of the tools designed to assist in this process are the project proposal and the business case. The project proposal is used to initiate an IM/IT initiative for consideration first by the home program area and later through the governance process. It must receive the blessing of the relevant director general (project sponsor) in order for it to be submitted for consideration by the governance process.
Once IMO and IMC have accepted the project proposal, a business case for it must be completed. The business case specifies in greater detail the opportunity, project objectives, scope, assumptions, expected benefits, costs and risks.
The acceptance and use of these tools across the user organization are critical to the successful implementation of the governance process. The provision of training and guidelines on their use should be implemented across the user branch. - Committee operation – The effective operation of committees is one of the essential elements of an effective governance process. There are several requirements to ensure their effective functioning including:
– Terms of reference for all committees (including roles and responsibilities, authority to make decisions, membership, principles of operation, etc.) should be published using a standard format across the branch.
– The limited time available to committees must be clearly focused on making decisions with other items receiving less attention. Some committees operate on a consensus basis and are somewhat reluctant to make tough decisions. Delaying decisions on important issues can impede the progress of projects and waste resources. Where important decisions are required regarding policy, planning, governance or allocation funds, they should be made when needed, based upon a clear understanding of the issue, the considered alternatives and a recommendation.
– As much as possible, committee meetings should be scheduled to eliminate delays in making needed decisions. Special provision must also be made to hold emergency meetings when needed.
Project management requirements
Sound project management is an obvious requirement for successful governance. The following identifies some of the key requirements often not considered:
The project roles/responsibilities must be clarified, understood and carried out effectively so that each project operates under the same parameters. These should become the standard set of roles and responsibilities for all IM/IT projects. The major project players include the project steering committee, the user project manager and the IT project manager. Where IM/IT projects are applications, these roles and responsibilities should also be aligned with the methodology being used for either custom applications or commercial off-the-shelf software.
The most qualified and effective project managers available must lead projects, from either the program area or from Informatics. The project must be staffed with dedicated subject matter specialists from both the user environment and from Informatics, especially on projects related to application development. Without knowledgeable project managers and subject matter specialists effectively representing the interests of the program branch, there is a much stronger likelihood that projects will not be delivered on time, within budget or to the satisfaction of clients.
Project management practices must employ sufficient assessment points or “gates.” After a business case has been approved, many projects are allocated a budget to complete the remainder of the project. At this point, there is not a complete understanding of user requirements or technical solutions. The budget estimate is inaccurate, and a full understanding of the complexities of the project is not possible.
A number of assessment points are required to ensure that the project’s progress reflects user needs, that the most appropriate technical solutions are used, that an effective return on the investment is provided and that the business of the branch is supported. The proposed governance framework fulfills this requirement by providing assessment points at the completion of project proposal, business case and user requirements/technical solution. Assessment points also take place during and at the completion of each remaining phase.
A standard reporting format/guideline must be established for all project status reports, along with a standard set of success criteria to assess project progress.
Governance framework approval
- All elements of the IM/IT governance framework must be reviewed, revised and approved by relevant stake holders and management. These elements include:
- governance principles;
- information management organization roles and responsibilities – project organization including terms of reference for project steering committees and project teams;
- the IM/IT governance process – standard formats for all project proposals and business cases;
- standard project reporting format and standard success criteria to assess progress.
Confirmation of start date
Once all the elements of the framework have been approved, a start date for their use should be confirmed.
Timing guidelines
There are a number of timing guidelines for the completion of the various stages of the IM/IT governance process. The key guideline is that the process must be simple and flexible enough not to unduly delay the assessment and consequent development/implementation of important IM/IT initiatives . At the same time, there must be a rigorous process in place to ensure that approved IM/IT initiatives do indeed support and enhance the IM/IT and business vision. This governance process is an end-to -end decision-making process to ensure that from project conception through to delivery, there is an effective return on investment for IM IM/IT funds expended.
The exact timing to complete the assessment stage from project proposal and business case will vary with each organization. The completion of the development and implementation stages will depend upon the type and complexity of the IT project.
Governance tools
Two of the essential tools needed to provide effective IM/IT decisions are project proposals and business cases for all proposed initiatives. The project proposal is a high-level investment tool providing a description of the problem to be addressed, the objectives, scope and assumptions of the initiative, its high-level benefits and risks. In conjunction with the detailed information on costs, benefits and risks provided by the business case, it provides the information necessary to ensure that all IM/IT investment decisions support the business vision of the user branch.
The benefits inherent in the use of project proposal and business cases include:
- Project proposals and business cases prepared according to the standard formats enable direct comparisons between candidate projects. They help to determine which projects are most worthwhile. This is especially important when there is competition for limited resources.
- The process of developing a project proposal in combination with the business case requires a detailed analysis of costs, benefits and risks of a proposed project. Consequently, the resulting decisions to approve or reject it can be made with the most accurate and detailed information possible.
- The process of developing a project proposal and business case in which all stake holders participate helps to enlighten all concerned and creates a set of shared expectations. These shared expectations form the basis of improved communication, cooperation and coordination of efforts.
- The completed project proposal and business case provide a benchmark against which the results of the solution delivery can be measured. The benefits expected from the completion of the project are the return that is expected on the investment of funds. The business case estimates these benefits and provides the means to compare them once the project is implemented.
Project proposal
The IM/IT project proposal is an investment tool used to provide an initial understanding of the problem/opportunity and a high-level solution. It includes a high-level description of the problem, project objectives/scope/assumptions, benefits/risks for a proposed IM/IT investment. It is the initial mechanism used in the IM/IT governance process to screen potential investments to determine whether the information is sufficiently complete to judge its merit. Where the information is incomplete, the project proposal is returned to the author for revisions. Where it is complete, the project proposal is then assessed to determine whether it has sufficient merit to warrant refinement into a business case.
All project proposals should adhere to a common format and be developed using a common process. This project proposal development process includes:
- obtaining the support of a project sponsor for a proposed IM/IT investment;
- defining the problem to be rectified or the opportunity to be exploited;
- describing the objectives, scope and assumptions;
- describing the potential project risks and benefits;
- preparing the project proposal documentation using a common format; and
- submitting the draft project proposal to IMO for review and recommendation to IMC for approval to develop a business case.
Business case
An IM/IT business case is a detailed investment submission providing an understanding of all costs, benefits, risks and alternatives associated with a proposed investment. It provides a context to understand how the investment supports and/or promotes the IT strategy and the business vision of the branch and department. It provides the information to ensure decision-makers have a level of confidence that the investment will support program delivery, reduce costs, enhance client services, or support business priorities to implement a required new program.
While business cases can vary in their level of detail, they all should adhere to a common format and be developed using a common process. This business case development process essentially refines the information provided in the project proposal to a point, which allows an informed decision to proceed to be made. It:
- describes the business problem, need or opportunity and its relation to the department’s goals or other objectives;
- outlines the project objectives, scope and assumptions and the range of possible actions;
- identifies the options considered to solve the problem;
- identifies the interdependencies or linkages with existing or proposed initiatives;
- states the high-level business requirements and possible technical solutions;
- identifies and quantifies the costs of the planning and analysis phase only;
- identifies and quantifies potential benefits of the proposed investments; and
- identifies/assesses risks and outlines risk management strategies associated with the proposed investment.
The business case is created using a common. format and submitted to IMC for consideration.
Evaluation of the proposed initiative
Once the costs, benefits and risks associated with a proposed IM/IT investment have been determined, the next step in the business case development process is evaluation. The evaluation of a proposed IM/IT investment must be based upon a set of criteria. These criteria allow a determination of how well the proposed IM/IT investment supports the organization’s goals and its business processes, and demonstrates its benefits to the branch, department or government as a whole. The evaluation of the proposed IM/IT investment must be based upon a multi-criteria approach. The evaluation criteria to use in assessing business cases may be grouped under the following headings:
- support the delivery of programs and services
- contribute to business or informatics mission
- improve client and/or employee satisfaction
- enable continuous improvement
- lead to reduced costs or improved business processes.
The specific evaluation criteria under each of these headings must be tailored for each organization.
Based on an analysis of the findings, the proposed IM/IT investment is either recommended for approval or rejected with reasons by IMC. Based on the recommendation from IMC, MC rejects or approves the business case and its budget for the user requirements development and technical solution development.
Governance interface
There are three levels of alignment in terms of the IM/IT governance of the program branch and that of the informatics; organization including: the policy level, the planning level and the project level.
- Policy level – Policies are established within the informatics organization and the program branch at the ADM level to provide direction and guidance in carrying out day-to-day activities in support of the business goals of the branch/department. For example, a draft IM/IT governance policy provides the direction needed to ensure that IM/IT resources are aligned and contribute to branch and departmental goals. Further, the policy outlines high-level governance principles, the governance process, and the roles and responsibilities of major participants. It also provides guidelines for the effective use of the policy. Where branch policies affect the operations of other branches, communication and coordination at the ADM level should be used to ensure that these policies are implemented effectively.
- Planning level – At this level, multiyear IM/IT plans are developed for both informatics and program organizations. The alignment of these plans in terms of compatible goals and strategies must be undertaken to ensure the effective utilization of IM/IT resources as the key enabler in the achievement of the business goals of the branches and of the department. The program and information organizations must ensure the development, alignment and compatibility of these multiyear IM/IT plans. The alignment of informatics and program IM/IT operational plans is manifest in the identification of projects and activities to be carried out during the year. These projects may include such elements as the acquisition and installation of hardware, commercial off -the-shelf software, or the development and implementation of applications. The alignment of these operational IM/IT work plans in terms of priorities, resources and schedules will help maintain the productivity of workers through the provision of needed IM/IT tools, the delivery of effective training/support and implementation resulting in minimal disruption to client work schedules.
- Project level – Once the business case has been approved by the program branch using the governance process, an IM/IT project is established. At the project level, the alignment of program and informatics project management activities is achieved through the project steering committee and the project managers from both organizations. The project steering committee provides the direction, guidance and decisions required by the project team to ensure the successful implementation of the project. The project managers and their staff work closely together as part of a project team. This project team is the principal mechanism through which the program branch and the informatics organization jointly manage the project to ensure it is delivered on time, within budget and to the satisfaction of clients. Interface and integration issues that cannot be resolved at the project team level are then raised to the project steering committee for resolution. If there is still a deadlock, program branch issues are then raised to IMC and/or MC for resolution.
Critical success factors
There are several factors crucial for the governance framework to prove effective for any federal public sector department:
- It must be understood, supported and used by all relevant stake holders submitting IM/IT initiatives for consideration.
- It must be an effective forum to discuss and resolve IM/IT initiatives/issues between program branches and the informatics group, as well as with the regions.
- All new IM/IT initiatives over $50K or some similar amount must be subject to the governance process.
- IM/IT initiatives not following the governance process must not be funded.
- It must be as simple and efficient as possible to provide maximum assurance of the relevance and importance of initiatives but not unduly delay their initiation or completion.
- It must be effectively integrated with strategic/operational processes and functions of the program branch and department.
- It must be an effective means of addressing opportunities for the employment of new IM/IT applications or initiatives in the branch or department.
It must be effective in eliminating duplication of effort/overlaps in IM/IT initiatives across the program branch and department and in realizing subsequent cost savings.
Conclusion
This approach to informatics decision making provides the ability to organize disparate pieces of data into the coherent body of information that is needed to make rational decisions about allocating scarce organizational funds and to ensure an effective return on IT investments. In short, the use of this governance regime will ensure that data will be converted to information, the information refined into knowledge, and knowledge transformed into wisdom. Wisdom in IT decision making is the acid test for effective governance.
Bryan Shane is a senior partner with BPC Management Consultants, For more than 20 years, be has provided consulting services in strategic management, information technology and performance measurement to a wide variety of public and private sector organizations. He has published a series of three articles on performance measurement in the public sector in Optimum . Mr. Shane holds an MEd from the University of Ottawa. He has also completed extensive graduate studies in statistics and evaluation.
Patricia Lafferty is a partner with BPC Management Consultants and has extensive experience as a senior professional manager She has served as a senior consultant to both private industry and the federal government for more than 20 years. Her areas of specific expertise are strategic change management, facilitation, implementation planning and performance consulting. She holds an MEd (Administration) from the University of Ottawa.
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