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
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
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
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
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
- 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.