3 Weill-ross Model

8/21/2019 3 Weill-ross Model

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Weill-Ross

IT Governance Model

Arrianto Mukti Wibowo,

M.Sc., CISA


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Agenda

• How Key IT Governance Decisions

Are Made

• Governance Mechanisms

• How Top Performers Govern

• Recommendations to Guide

Effective IT Governance Design


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Pendahuluan

• Every enterprise engages in IT decisionmaking, but each differs considerably in howthoughtfully it defines accountability and how

rigorously it formalizes and communicatesdecision-making processes.

• When senior managers take the time todesign, implement, and communicate IT

governance processes, companies get morevalue from IT.


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IT Decisions

Pengambilan Keputusan

Terkait TI


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Major decision domains

• IT principles comprise the high-level decisions about thestrategic role of IT in the business.

• IT architecture includes an integrated set of technical choicesto guide the organization in satisfying business needs.

• IT infrastructure consists of the centrally coordinated, shared IT

services that provide the foundation for the enterprise’s ITcapability and were typically created before precise usageneeds were known.

• Business application needs are the business requirements forpurchased or internally developed IT applications.

• Last, prioritization and investment decisions determine howmuch and where to invest in IT.


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Siapa yang bisa bertanggung jawab?

• Bisa di business unit atau functional unit

• Bisa IT

• Bisa senior executive (direktur, komisaris

jika perlu) di kantor pusat

C

IT BU


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Governance Archtypes

• Business monarchy

• IT Monarchy

• Federal System

• IT Duopoly

• Feudal

• Anarchy


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Business, IT & Federal

• Business monarchy — the mostcentralized approach — a seniorbusiness executive or a group ofsenior executives, sometimesincluding the CIO, makes all theIT related decisions for the

enterprise.• In an IT monarchy, thosedecisions are made by anindividual IT executive or agroup of IT executives.

• In a federal system, C-level

executives and businessrepresentatives of all theoperating groups collaboratewith the IT department. This isequivalent to the centralgovernment and the statesworking together.

C

IT BU

C

IT BU

C

IT BU


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IT Duopoly, Feudal & Anarchy

• IT duopoly, a two-party decisionmaking approach involves ITexecutives and a group ofbusiness leaders representingthe operating units.

• In a feudal system, business unitor process leaders makeseparate decisions on the basisof the unit or process needs.

• And, finally, the most

decentralized system is anarchy,in which each individual user orsmall group pursues his, her ortheir own IT agenda.

C

IT BU

C

IT BU

C

IT BU


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Kasus UPS

• UPS’s governance arrangements reflect thecompany’s commitment to offering total, integratedsolutions for customers’ global commerce needs.

• Senior management accountability for principlesand investment decisions ensures that IT issues areincorporated into the company’s strategic decision-making processes.

• The CIO, who is a member of the seniormanagement team, translates principles andinvestment decisions into IT architecture andinfrastructure (such as standards, policies andprocesses).

• Business unit projects, delivered in the context ofbusiness and IT principles, define businessapplication needs in a way that both enhancesbusiness unit performance and supports corporateobjectives.


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Analisis UPS

• UPS’s IT governance creates strategiccontrol at the top of the company whileempowering decision making at multipleorganizational levels.

• Senior management works to make ITgovernance transparent so that everyoneunderstands and follows prescribedprocesses for proposing, implementing andusing IT.

• This limits the role of organizational politicsin IT-related decisions and shows in thecompany’s bottom-line performance.


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Governance Mechanisms

Mekanisme-mekanismetatakelola


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Mengenai Mekanisme Tatakelola TI

• Once the types of decisions and the archetypesfor making those decisions are mapped out, acompany must design and implement acoordinated set of governance mechanisms

that managers will work with on a daily basis.• Enterprises generally design three kinds of

governance mechanisms:(1) decision-making structures,

(2) alignment processes and(3) formal communications.


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Decision Making Structures

• The most visible IT governance mechanisms are theorganizational committees and roles that locate decision-making responsibilities according to intended archetypes.

• Different archetypes rely on different decision-makingstructures.

• Anarchies (which are rarely used — or at least rarely admitted

to!) require no decision-making structures at all.• Feudal arrangements rely on local decision-making structures.• But monarchy, federal or duopoly arrangements demand

decision-making structures with the representation andauthority to produce enterprisewide synergies.

• Contohnya bukan saja struktur organisasi, tapi juga siapamelakukan keputusan apa.


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Contoh Decision Making Structures

• Steering Committee

• IT Policy Board

• Architecture Committees

• Business Unit CIO

• IT Council at low level (business & IT)

• Process organization

• Business/IT Relationship manager (liason)


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Alignment Process

• Menjamin peran serta semua pihak dalampemanfaatan TI yang efektif bagiperusahaan

• Jadi, kita tidak bicara seperti hanya denganteknik SPIS (misalnya dengan melakukancascading business objective menjadi ITobjective), tetapi kita bicara mekanismeorganisasi yang bisa menjamin terjadinya

keselarasan secara inheren (dimana orangyang terlibat dalam proses itu tidak harus―pakar‖).


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Alignment Process

• Beberapa proses yang pentingadalah:

1. IT Investment Approval Process

2. Architectural Exception Process

3. Service Level Agreements

4. Chargeback

5. Project Tracking6. Formal Tracking of Business Value


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Communications Approach

• A huge barrier to effective IT governance is lack ofunderstanding about how decisions are made, whatprocesses are being implemented and what thedesired outcomes are.

• Management can communicate governance

processes in a variety of ways:1. general announcements,2. the institution of formal committees,3. regular communication from the office of the CIO or the

office of IT governance,4. one-on-one sessions,5. Working with non-conformist6. Intranets, etc.

• More communication generally means moreeffective governance.


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Mekanisme IT Gov di UPS

1. An IT steering committee, comprisingfour top executives who acceptprimary responsibility for principlesand investment decisions,

2. An IT governance committee of

senior IT executives responsible forkey architecture decisions,3. A formal ―charter‖ process that

winnows down the entire enterprise’sIT project proposals to those best

aligned with strategic objectives4. An escalation process to handleexceptions to architecture standardsat the appropriate organizationallevel.


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How Top Performers

Govern their IT


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Pengantar

• Tidak ada satu pola IT Governanceyang tepat untuk seluruh organisasi


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Kasus Carlson Companies

• Minneapolis-based CarlsonCompanies Inc. takes a differentapproach to hybrid IT governance.

• Carlson is a $20 billion, privatelyowned conglomerate in themarketing, hospitality and travelbusiness.

• It has grown through acquisition, withoperating groups in relationshipmarketing services, loyalty programs(Gold Points Reward Network),hotels (Radisson Hotels and Resorts,Regent International Hotels),restaurants (T.G.I. Friday’s Inc.),

cruises and travel services.• Traditionally, each Carlson operating

group functioned independently andcompeted with other operatinggroups.


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Perkembangan Tahun 2000an

• Chairman and CEO Marilyn Carlsonsought to change that competitiverelationship to a collaborative one.

• CIO Steve Brown, who reportsdirectly to the CEO, was givenresponsibility for defining the role of

IT for the integrated enterprise.• Toward that end, Brown articulated

two key principles.1. First, application development could

continue to take place withinoperating groups, but

• applications would be presented tousers through a shared portal, and,

• where necessary, data would beshared across business units.

2. Second, Carlson would have ashared IT infrastructure.


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Decision Making Structures at

Carlson

1. Carlson Technology Architecture Committees (CTAC),which reside in each operating group and take responsibility formeeting the unique needs of each individual business;

2. Enterprise Architect Organization (EAO), a team of businessunit IT representatives that sets corporatewide standardsguiding the development efforts of all the operating units;

3. IT Council, made up of the CTOs and CIOs of each operatinggroup, which meets monthly to talk about new technologiesand ways technology can be leveraged across Carlson;

4. Carlson Shared Services Board, the business unit CIOs andCFOs, who meet to identify opportunities to provide shared ITand financial services to the company; and

5. Investment Committee, a subset of the Executive Committee,which renders final judgment on all large Carlson Companiesinvestment projects.


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IT Governance at Carlsons


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Analisis Carlsons

• With some responsibility for IT decisionsbeing more centralized (investment, forexample) and some less centralized (suchas business application needs),

• Carlson’s governance arrangements attemptto – maximize opportunities to leverage shared

services while

– minimizing constraints on the unique needs ofrelated but distinct operating requirements acrossdiverse business units.


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Weill-Ross Model (2004)

Weill & Ross, Sloan School of Management, MIT"Specifying the decision rights and accountability framework to encourage

desirable behaviour in the use of IT.“


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Governance Lessons From Leaders


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Thank You

3 Weill-ross Model

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