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IT Governance and the ERP Process Fred Siff Vice-President & Chief Information Officer, Professor IT Governance and the ERP Process Fred Siff Vice-President & Chief Information Officer, Professor of Information Systems University of Cincinnati © F. H. Siff, 2005 This work is the intellectual property of the author. Permission is granted for this material to be shared for non-commercial, educational purposes provided that this copyright statement appears on the reproduced materials and notice is given that its use is by permission of the author. To republish or otherwise disseminate this work requires the written permission of the author.

Assembling Packets from the Campus Ether n. Listen … and hear n. Develop coherence Assembling Packets from the Campus Ether n. Listen … and hear n. Develop coherence n. Garbled messages lead to failed executive leadership

Five Ideas The New Kid on the Block n What is Governance and Why Five Ideas The New Kid on the Block n What is Governance and Why Is It Essential? n Who Cares About IT in the Business? n Governance Beyond ERP Selection n Some Keys to Effective Governance n

The New Kid in the Executive Suite “Getting IT Right, ” Harvard Business Review, The New Kid in the Executive Suite “Getting IT Right, ” Harvard Business Review, Feld & Stoddard, February 2004 “Of all the members of the Executive Committee, the CIO is the least understood …many companies just kick the kid out of the house. ”

The New Kid in the Executive Suite n Manage to a mature business model, The New Kid in the Executive Suite n Manage to a mature business model, not to the next crisis Do (only? ) what your organization can do well n Sound resource management is essential n A cost center with a P&L statement n n. A mature business model must include governance

What is Governance? n Who makes decisions, why, and how n n n Academic What is Governance? n Who makes decisions, why, and how n n n Academic organizational culture largely defined by issues of governance IT is new to the process IT is too important to leave to IT folks n n n You need their voice Just IT: myopic and ill-Informed Just IT: nobody else cares

What is Governance Why n Successful business transformation starts with business needs and priorities What is Governance Why n Successful business transformation starts with business needs and priorities n involves the business process owners in significant ways n n An antidote for anarchy?

What is Governance Why Practical: prioritize the deployment of limited resources n Reflect community What is Governance Why Practical: prioritize the deployment of limited resources n Reflect community n Not for “buy-in” n Involvement of informed users leads to better ideas, products & decisions …But fit the larger organizational culture n

What is Governance Why The business agenda defines issues n IT-Business Alignment n There What is Governance Why The business agenda defines issues n IT-Business Alignment n There are no IT projects…only business projects n The Next Great Thing in IT is not in IT, it is in the business All of this applies to the ERP Process

Who Cares About IT in the Business? n Everyone. I’m IT. You’re IT. A Who Cares About IT in the Business? n Everyone. I’m IT. You’re IT. A Higher Ed institution is not Wal-Mart n Credibility is the key to organizational involvement. . . Deliver n Committees recommend …Officers and administrators make decisions

Governance and the ERP Process Make the business case, not the IT case n Governance and the ERP Process Make the business case, not the IT case n Build the system for a client n n Not the power users, but all users IT may be the architect/construction engineer, but the client is the owner/occupant. Identify & empower an appropriate sponsor n to whom IT is secondary, even subservient – a business partner

Governance and the ERP Process What are the key decisions? n Need, sponsors, resources Governance and the ERP Process What are the key decisions? n Need, sponsors, resources n Specs and selection n Blueprint/design and realization Not hardly…

Governance beyond ERP Selection & Build Each system has a life cycle, and the Governance beyond ERP Selection & Build Each system has a life cycle, and the aggregation of subsystem life cycles… is what gives the CIO grey hairs and worse. Easier (more dramatic, identifiable resources, etc. ) to build new (system/bldg) than to rehab old. Ongoing enhancement/refinement is a real issue must have a coherent governance structure must have an identifiable maintenance (& support) budget, much like a maintenance budget for a building. must project this out for at least several years, to develop a complete picture

Governance beyond ERP Selection At UC, we have a Core Systems Matrix, Allocated funds, Governance beyond ERP Selection At UC, we have a Core Systems Matrix, Allocated funds, core systems by year, projected to 10 years Managed by the Institutional Management Committee, within the overall governance structure

Some Keys to Effective Governance Vision = Execution Deliver Some Keys to Effective Governance Vision = Execution Deliver

Some Keys to Effective Governance n Involve the right people matched to the right Some Keys to Effective Governance n Involve the right people matched to the right issues n Executive involvement critical

Simplified UC IT Governance Structure (February 2004) Academic Technology Planning Committee Infrastructure Technology Planning Simplified UC IT Governance Structure (February 2004) Academic Technology Planning Committee Infrastructure Technology Planning Committee Executive Technology Strategy Committee (VP & CIO) Cabinet (President Chairs) Institutional Management Planning Committee E-Communication Planning Committee --ECAR Case Study 4, 2004, “Using an IT Governance Structure to Achieve Alignment at the University of Cincinnati. ”

Some Keys to Effective Governance n Involve the right people matched to the right Some Keys to Effective Governance n Involve the right people matched to the right issues Executive involvement critical n Thought leaders n Strong recommendations -- empower n

Some Keys to Effective Governance n Involve n the community “Using an IT Governance Some Keys to Effective Governance n Involve n the community “Using an IT Governance Structure to Achieve Alignment at the University of Cincinnati, ” ECAR Case Study 4, 2004

Conclusion The IT Governance The ‘ERP decision’ structure is one (which really for remechanism Conclusion The IT Governance The ‘ERP decision’ structure is one (which really for remechanism isn’t) is just one issue to be assembling the treated within the IT packets and structure. Governance enabling the executive function of IT to be conducted.