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IT Governance, Managing IT

IT Governance, Managing IT. The Investing Community. Public Corporations Stockholders (shareholders) Stock exchanges U.S. Securities and Exchange Commission (SEC) Auditors. How it Works. Corporation issues shares, purchased by investors Investors receive returns

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IT Governance, Managing IT

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  1. IT Governance, Managing IT

  2. The Investing Community • Public Corporations • Stockholders (shareholders) • Stock exchanges • U.S. Securities and Exchange Commission (SEC) • Auditors ADMN645 - IT Governance, Managing IT

  3. How it Works • Corporation issues shares, purchased by investors • Investors receive returns • Share appreciation (realized when sold) • Dividends • Other ways to invest • Derivatives • Bonds • Mutual funds ADMN645 - IT Governance, Managing IT

  4. How it Works (continued) • Investors buy and sell shares, based on: • Evaluation of the corporation • Perspectives on how others evaluate the corporation • Other criteria? ADMN645 - IT Governance, Managing IT

  5. Evaluating the Corporation • Annual Report to Shareholders • Form 10-K report – official, more detailed report to SEC • Detailed financial reports • Business summary • Properties • Legal proceedings • Role of the auditor ADMN645 - IT Governance, Managing IT

  6. System Built on Trust • Corporation reports results... • Accurately • Completely • Financial and non-financial • Auditor’s opinion unbiased • SEC and stock exchanges are watchdogs ADMN645 - IT Governance, Managing IT

  7. Breakdowns • Tyco International • WorldCom (now MCI) • Enron • Effects • Enriched (now imprisoned) executives • Shafted shareholders • Diminished (or extinct) companies ADMN645 - IT Governance, Managing IT

  8. Sarbanes-Oxley Act –Provisions Related to IT • Section 302 - Personal certification of financial reports and effective controls by CEO/CFO • Section 404 – Annual evaluation and certification of financial controls • Effects: • Higher visibility of IT to executive leadership • IT governance on a higher level ADMN645 - IT Governance, Managing IT

  9. What is IT Governance? • How the organization makes decisions about the use of information technology • Enterprise architecture • Project priorities • Reporting metrics • Cost allocation • Sourcing • Who has the authority? Who has input? ADMN645 - IT Governance, Managing IT

  10. Signs of Dysfunction (Luftman) • Diffuse, uncoordinated decisions • Business units not accountable to IT • No unifying enterprise architecture • Spending too much (or don’t know) • Few or no measures of IT effectiveness ADMN645 - IT Governance, Managing IT

  11. Governance Decisions • CIO reporting relationships – to CEO, COO, or CFO • Level of centralization of IT organization • The players and relative influence • IT staff and managers • Business managers • Executive leadership ADMN645 - IT Governance, Managing IT

  12. Governance Drivers • Organizational form – centralized, decentralized, multi-national • Centrality of IT to organizational mission • IT-enabled products • IT-enhanced operations • Organizational environment – competitive, regulatory ADMN645 - IT Governance, Managing IT

  13. Managing IT – An Oxymoron? • No...but it’s close • Gap (chasm?) between business and IT • Different languages between business and IT • Business – sales, growth, ROI, market share, cost control, etc. • IT – XML, Ajax, JavaScript, .Net, etc. ADMN645 - IT Governance, Managing IT

  14. Bridging the Gap • Help senior management to understand IT issues • Speak their language • CIO briefing an exercise ADMN645 - IT Governance, Managing IT

  15. Working With Senior Management • Not willing to understand your problems • Asking for the moon without paying for it • “Work smarter, not harder” • “Doing more with less” • “Be creative” • Vendors willing to bypass CIO, sell to senior business managers • Other problems? ADMN645 - IT Governance, Managing IT

  16. Lessons Learned in Managing IT (from Jack Crosby) • Have a vision and a plan for IT • Form an IT steering committee • Never tell other unit heads that they don’t understand IT • Break down large projects • Have a systems development methodology • Measured investments in new technology ADMN645 - IT Governance, Managing IT

  17. Lessons Learned (continued) • Be cautious with vendors and their concept of “partnering” • Organizational politics matter • Measurements matter – what doesn’t get measured, doesn’t get done ADMN645 - IT Governance, Managing IT

  18. Catatech Industries Case - Questions • With respect to the question of electronic commerce, what are the motivators, drivers, issues for: • Marisa Rivera? • Carlos Fernandez? • How much and in what ways are their motivations in conflict, and congruence? ADMN645 - IT Governance, Managing IT

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