The Infonomics Letter, 19 December 2014
Plain language about Digital Leadership
and Governance of Information Technology
for Executives and Directors
Looking Ahead
Welcome back to the Infonomics Letter – the third and
final edition for 2014.
Back on January 6, I hoped that this would be a great
year for all of us. Somehow,
it didn’t work out like that and I’ve instead had what Queen Elizabeth
once called an “Annus Horribilis” – a horrible year.
Without going into too much detail, it’s best to say that I let
my guard down on health and was flattened by multiple bouts of
influenza. Maintaining my
normal level of productivity became impossible and I was forced to
choose carefully the tasks that would get my energy.
Two of the victims were The Infonomics Letter and my promised new
book, Digital Leadership Manifesto.
The good news from my perspective is that I have
recovered my health and am now looking forward to both a great Christmas
break and a very significant 2015.
So, before we close off 2014, a year in which I did
not achieve all my plans, I’d like to share four things with you:
ISO 38500 in the Digital Era
There is no doubt that the
world is advancing into the Digital Era.
In the digital era, individual advanced technologies and
management models including: ubiquitous high speed communication;
massive, ubiquitous storage and processing capacity; big data;
analytics; cloud; social media; software as a service; mobility; BYOD;
and the internet of things are being integrated at every level of
personal and enterprise endeavour to create new capabilities and improve
existing ones. As part of
preparing my 2014 ACS Education Across the Nation series, I defined the
dawn of the digital era as:
“An unfolding landscape where we can do better things we have always
done and do things we have never been able to do, because digital
technologies enable us to capture and manage information in ways not
previously possible. It begins with a time of profound, ongoing change,
enabled by digital technologies”.
One of the significant challenges in governance of IT
in the digital era is that almost everybody is in a position to exploit
technology to achieve their own goals.
No more powerful illustration of this fact is the way that
individuals use mobile devices to access social media and empower
themselves to communicate to audiences that were unimaginable just a few
years ago.
This challenge is extended by the way that
mass-consumption technology resources such as cloud and software as a
service have fundamentally changed the costs of acquiring technology.
Many industries are being intensively disrupted not
just by new entrants in to their markets, but by the way established
actors in their market are rewriting the rules in their own favour.
Consider for example how universities are unavoidably driven to
embrace the digital era.
Students are driving the agenda with their own use of mobile and other
technologies. Institutions
are exploiting technology to reach markets far beyond their traditional
geographic bounds, and to deliver education and resources at massively
lower cost than previously possible.
At the same time advances in technology offer unprecedented
capacity for collection and analysis of data.
Researchers and administrators are generating ideas for new
digital-enabled research and capability at a prodigious rate and
demanding delivery at a speed that was unimaginable only a couple of
years ago. Readily
accessible technology enables rapid launch of new capability that in
turn demands accelerated development of new technology and operational
capability.
What has not changed is that adoption of technology
in the digital era still frequently involves substantial change in
existing business operating models and development of new capability to
enable future business models.
As we have learned through many years and examples of failed IT
investments, success is not merely in the delivery of the technology,
but in the realisation of the intended outcomes for business capability
and performance which come from a properly orchestrated change program
that addresses the fundamentals of business change.
H. J. Leavitt described these fundamentals in his 1964 paper
“Applying Organizational Change in Industry: Structural, Technological,
and Humanistic Approaches”, published in
Handbook of Organizations, edited by James G. March and published by
Rand McNally 1964. Fifty
years on, we adapt Leavitt’s Diamond to describe technology-enabled
transformation:
New digital technologies empower people to work in
new and different ways, enabling and frequently requiring new processes
and demanding organisational and structural change including new policy
guidance and assignment of authority.
In order to attain new capability, business systems and their
organisational context must transform through all four dimensions.
While in some cases these transformations are happening in a
ubiquitous and sometimes subliminal manner, there are many more cases
where planned change encounters obstruction through the tendency for the
status quo to persist unless forcibly disrupted.
The clear message to be considered by organisations
is that governance of IT is no longer solely or principally about the
technology. Rather,
governance of IT must address the use of technology as an enabler but
not as a driver of business capability, and must deal with the essential
need to govern ongoing business transformation and performance enabled
by new technologies. We
refer to this extensive and essential business change as
digital transformation.
Bear in mind that digital transformation is a
phenomenon that is simultaneously occurring within
and external to every organisation, and that while some aspects
of digital transformation may be voluntary and fully controllable, many
aspects of digital transformation are involuntary because they are
driven by external (and sometimes internal) actors over whom the
organisation has no direct control.
These factors make it essential that governance of IT in the
digital era is capable of dealing with the entire emerging digital
context of the organisation as well as its ongoing legacy of pre-digital
era technologies. But this
does not mean that we need to start again with a clean sheet of paper to
develop a model for governance of IT in the digital era.
Rather, we need to understand that ISO 38500 is perfectly
applicable in the digital era.
In the adapted ISO 38500 model presented in:
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The digital era governance arrangements provide overarching direction and control for the organisation as it plans, builds and runs its digital future capability;
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The organisation adopts a management approach to planning, building and running the digital capabilities that recognises that digital transformation includes potentially substantial business transformation as well as adaptation to and participation in market transformation;
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In the digital era, policy settings, including assignment of decision rights and authorities, are likely to be different to those applicable in the pre-digital context.
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Many aspects of the fundamental governance activities – evaluate, direct and monitor – are likely to be delegated into the management space.
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The principles for good governance of IT are equally, if not more relevant in the digital era. For example, the responsibility principle reminds us to think carefully about and appropriately assign responsibility for digital transformation – bearing in mind as we learned from Leavitt, that digital transformation is not merely a matter of acquiring the technology. Similarly the human behaviour principle reminds us to address a wide spectrum of human characteristics including the seeming polar opposites of resistance to change (such as resistance to changing work duties driven by new systems) and propensity to rapidly assimilate change (such as use of personal mobile devices).
While the ISO 38500 model seems very well suited to
the current digital transformation landscape, the same cannot be said
for many aspects of management systems originally designed to enable
effective “IT Governance”.
These older models are becoming suboptimal because they are geared to a
time when technology was the greatest challenge and expense in the use
of IT. Nowadays, the
technical aspects are frequently the least complex and least expensive
part of the initiatives in which business capability is redefined and
reimplemented for the digital era.
However, this does not necessarily regard these management
systems are fundamentally flawed.
Rather, they need to be updated in perspective – refreshing their
orientation and approach so that they deal with the broader range of
complexities in digital transformation while also operating at the speed
of digital transformation.
Using ISO 38500 as the overarching model for governance of IT, and
especially focusing on the meaning and application of its model and
principles, can greatly assist in overhaul of the more detailed
management processes and decision-making arrangements.
Using ISO 38500 in this way enables organisations to
take a top-down approach to evolving the management systems that
underpin effective governance of IT and therefore effective governance
of digital transformation.
It highlights that top level policy should guide the evolution of the
management systems.
Improving governance of IT at every level requires a
clear understanding of two things – the starting point and the goal,
each of which is different for every organisation.
Commencing an improvement process without understanding either is
clearly an exercise in futility, as there is no means of focusing on the
most important and valuable adjustments.
The Infonomics ISO 38500 Assessment Method is a
proven effective way of understanding how any organisation governs IT
without presupposing any implementation model for the underpinning
management systems. It
provides a clear view of the subject organisation’s approach to
governing the bigger picture of business use of IT and therefore
provides a comprehensive basis on which to identify change that adapts
the organisation’s governance arrangements for effective governance of
digital transformation and ongoing digital business operations.
An eclectic
and constrained year in review
While I was laid low for more days than I care to
count, I have not been totally absent from my desk and the workplace in
general. Here are some of
the highlights.
ACS Education
Across the Nation
The year started with some moderately intense travel,
as I delivered complete the Australian Computer Society’s Education
Across the Nation program from January to April.
This took me to Adelaide, Brisbane, Canberra, Hobart, Melbourne,
Perth and Sydney, as well as the regional city of Toowoomba in
Queensland. The hour long
presentation on Digital Leadership and Digital Transformation was well
received with an unofficial tally of around four hundred people
attending. Perth, Brisbane,
Sydney and Melbourne also delivered nineteen senior professionals for
the two day ISO 38500 Foundation Class, for which some very encouraging
endorsements were received (as reported in Return from the Outback,
posted on 23 June).
ISO 38500
Assessments
2014 has been an interesting year for ISO 38500 based
assessments of how organisations govern their use of IT – particularly
in the federal government and large corporate space.
While I can’t go into detail, I
can report that the assessment tool worked very well and highlighted all
the key issues in management behaviour, again reconfirming that no
matter how good the process model, if management behaviour is not good
enough, there will be problems with IT.
As is often the case, simply exposing the behaviour issues and
associated consequences is only the first step – what is essential is
that there is a robust commitment ot change at the very top of the
organisation.
Explaining
Governance of IT
My teaching activities carried through the second
half of the year with eight days on ISO 9000, IT Service Management and
Information Security Management for the Solomon Islands Government,
followed by briefings for Australian Institute of Company Directors
members in Geelong and for Governance Institute members in Melbourne.
There were also sessions at The Next Big Thing conference and the
IQNite Testing and Software Quality conference, also in Melbourne.
Hewlett Packard
Delivers
Hewlett Packard delivered for me in two ways during
2014.
Paul Muller, who leads the global IT management evangelist team within
the Software business at HP, picked my brains in a series of
three interviews on various aspects of governing IT, as part of
his HP Discover Performance Weekly Interview series.
The interviews are all on YouTube and each runs for
about 15 minutes. I claim no credit for the episode titles, but I assure
you that all the content is real, and straight off the cuff:
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The dumb and the reckless: how to keep your next IT project from becoming the next boardroom drama;
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Digital native or digital nitwit: What kind of enterprise will you be by 2020?
HP’s second delivery was a replacement for my ageing
HP Pavilion notebook. Having
discovered that a Windows 8 tablet was perfectly OK for browsing and
email but absolutely useless for developing and delivering serious
content, HP kindly took back the tablet and upgraded me to the Envy
notebook. At less than half
the weight of its predecessor and with many times more power and
storage, it’s become my complete mobile office and when teamed with a
decent smartphone leaves me wondering if there is space in my life for
another tablet! Perhaps some
time in the future…
People and
Organisations are Using ISO 38500
It’s taken a very long time for ISO 38500 to achieve
even modest acceptance in the market.
It faced several challenges: it was radically different from
prior guidance on governance of IT; it doesn’t contain a prescription
for implementation; it required deep thought on behalf of adopting
organisations to understand how to use it effectively; there were few
properly competent ISO 38500 consultants available to assist; many
professionals were deeply committed to alternative views on governance
of IT; business leaders still thought that governance of IT was an IT
problem; and so on. However,
little by little, the tide has turned.
Where ever possible I have sought to publicise the organisations
that are using the standard, though until this year few have come
forward. The major
accessible exemplar remains South African Government, through its
Department of Public Service Administration.
During my travels of 2014 however, I have learned of
several Australian organisations in public and private sectors which
claim to have adopted the standard.
Some of them have used Waltzing with the Elephant to guide their
work. Others have done their
own thinking from first principles.
One has adopted the principles in ISO 38500 not just for
governance of IT, but for governance of the organisation’s activities on
a much wider scale.
This is good to hear.
However, there now comes a question: Have they adopted the
guidance in ISO 38500 in a way that does truly improve their governance
of IT (and other things) so that they make effective, efficient and
acceptable use of IT? How
can they verify the outcomes of their work?
One way of course is to test the outcomes achieved against the
goals they set at the start of the change program.
Another, as is the normal practice in every other field of
activity, is to evaluate what has been done and look for opportunities
for improvement. It should
come as no surprise at all for me to suggest that the Infonomics ISO
38500 Assessment Method is a highly effective way of gaining insight for
both planning and assessing a change program.
Getting ISO 38500
WRONG in Victoria, Australia
Evidence that not all organisations get it right in
adoption of ISO 38500 can be found very close to the Infonomics home
base. During 2014, in
response to policy direction of Victoria’s Liberal State Government, the
state bureaucracy developed the
Victorian Government Information and Communication Technology
(ICT)Governance Framework.
In a word, this document is pure, unadulterated rubbish!
It demonstrates a profound failure to comprehend the context and
role of IT in the 21st century and instead perpetuates the
mind-set that only IT people should be involved in directing and
controlling the use of IT.
For example, it nominates the responsibility of Agency heads in respect
of Victorian Government ICT Strategic Directions as being “Accountable
for contributing to ICT Strategy outcomes, supported by their agency
CIO”. It says nothing about,
and therefore seems oblivious to the potential role for agency heads in
finding more effective ways for the state government to operate through
redesign of government activities at whole of government, inter-agency
and intra-agency levels.
Some may say that I am unhappy with the Victorian
Government’s effort because the people involved all of my offers of
help. Well – the South
African Government developed its approach to using ISO 38500 also
without my help, and indeed without even reading Waltzing with the
Elephant. They got it right
and I rang their praises loud and clear in 2012!
OK – enough on that.
There’s a new Labor government in power now in Victoria, and I
will certainly be encouraging them to take serious notice of the
opportunity to use ISO 38500 effectively in setting up the state for its
transition into the digital era.
Academic
Collaboration
Even though I have had limited capacity, 2014 has
been a big year for academic collaboration.
This includes:
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Ongoing conversation with Lizzie Valentine at Queensland University of Technology in relation to her work on the competencies needed by company directors for effective governance of IT. She has published much of her work in a highly accessible form at www.enterprisegovernance.com.au;
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Similar conversations with Shafi Mohamad at Griffith University as part of his work on “Developing a Model to Evaluate the Information Technology Competence of Boards of Directors”;
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Co-authoring a book chapter with Shafi Mohamad: "The Importance of Enterprise Technology Governance in Effective Corporate Governance" will be published as Chapter 4 in the "Responsible governance: perspectives for the new era" by Business Expert Press, early in 2015;
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Co-authoring a paper with Carlos Juiz: “To Govern IT, or Not to Govern IT?” is scheduled for publication in the February 2015 edition of Communications of the ACM. Carlos is a leading proponent of ISO 38500, having taken a leadership role in its adoption at the University of the Balearic Islands in Barcelona, Spain, shortly after the standard was published in 2008;
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Dr Helena Garbarino, a professor at ORT University in Montevideo was awarded her PhD by the Polytechnic University of Madrid during the year. Her thesis is entitled “Marco de Gobernanza de TI para empresas PyMEs – SMEsITGF” (The thesis is predominantly written in Spanish, but it does include a brief English abstract). It was my pleasure to assist Helena as she developed her analysis and recommendations for effective governance of IT in small and medium enterprises;
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Mai Hyari from Kuwait is the newest addition to the list of people I am helping with their work on governance of IT. She is completing an MBA with Durham University Business School, UK;
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Jerry Luftman, the irrepressible chief of the Global Institute for IT Management invited Infonomics connections to participate in his global research on Global IT Trends. The 29 page report makes for some interesting reading!