Most established companies already have in place an internal framework for managing IT. To ensure this framework is sound, it is helpful to consider the high-level architectural issues one would confront when setting up IT management processes from scratch. (See the Managing IT Overview for the big picture.)

First, managing IT happens within the overall corporate governance context: IT is generally a group that is charged with supporting the business units' information technology needs. One IT governance approach is for IT to be a centralized, standards-setting body -- often operating out of the corporate headquarters -- that dictates the company's basic computing infrastructure. The computing infrastructure includes the networks, hardware, and software applications used by employees. Another governance approach is distributed in nature: IT professionals work within the business units, reporting to the head of that unit with a "dotted line" to the chief information officer (CIO). The latter method preserves much decision-making autonomy in the business units, though the CIO may elect to set corporate technology standards under this model, as well.

Many large companies have an IT advisory group made up of non-technical business executives who work with the CIO to ensure IT is aware of and responds to the needs of the business. These business managers help the CIO understand relevant business metrics, the key measures of company performance (such as the time it takes to get a new product to market or how much inventory the company must warehouse). The CIO's job is to then suggest technology systems or projects that enable the company to improve its performance and to ensure compliance with applicable regulations and laws.

As part of IT risk management, the CIO may use one or all of the following techniques:

• Project review and justification. Most companies have a formal review process for any IT project that rises above a designated cost threshold. The review process includes return on investment (ROI) analysis.
• Best practices. No matter what type of technology is at issue, there are a number of associated practices that are widely accepted to be optimal. Many CIOs solicit best practices from their peers - both inside and outside their industry. Benchmarking is the process of gathering best practices in a particular technology or functional area (e.g., customer service, project management or wireless security).
• Project portfolio management. Companies spend the majority of their IT budgets keeping the existing IT systems and the department itself running. Many CIOs believe they can better help their company gain competitive advantage if they add some higher-risk, higher-potential-reward projects to the mix. Many consider 80 percent run-the-business projects to 20 percent grow-the-business projects a good mix.

For more information on choosing the right solution for your company, please read our Managing IT Overview.

Go to Bitpipe Research Guide: Managing IT.