IT: Heal Thyself

Deprived of tools, methods and data intelligence they've helped deploy within other business functions, many IT executives find their departments are overextended as they try to meet out-of-control obligations. Old ways set in an earlier time of artisan developers working project by project now expose businesses to IT breakdown. Without the means to manage itself and assess system performance against business goals, IT is unlikely to deliver systems and information services when they're most needed. A growing number of organizations are working with project and portfolio management (PPM) software to establish "IT governance." No doubt, regulatory compliance is a catalyst as IT seeks to establish accountability, but Web services architecture is also pushing IT to change its ways.

Here's how IT managers can improve planning and forge a data-driven relationship with business managers through best practices and sophisticated Web services management.

Governing the Far-Flung Enterprise

IT governance is first about giving top IT management reports and analytic tools to learn the status, costs and business drivers of all current projects. If this sounds like a job for a business intelligence (BI)-flavored PPM dashboard, it is. Second, governance involves applying best practices to guide the improvement of IT's own workflow, processes and alignment with industry standards. Finally, IT governance involves improving accountability through defining metrics for evaluating performance of projects and personnel.

Executive Summary

With information technology integral to achieving business goals, the IT function is under close scrutiny. Organizations want bigger bangs for fewer bucks. Regulatory compliance requires systematic IT management. Organizations look to IT to enable business agility at reduced cost. IT must find a healthier way of managing expectations, not to mention legacy maintenance and new systems deployment. IT needs a "business" management mentality for Web services and service-oriented architecture (SOA) to succeed — and not become a layer of confusion on top of an already chaotic environment. Relief is coming from BI-infused portfolio and project management (PPM) tools, which give IT managers the reporting, analytics and performance management metrics so important to other business functions. Frameworks for service management, most importantly IT Infrastructure Library (ITIL), are gaining momentum as the means of establishing best practices and a better collaboration with the business side. Web services, SOA and business process management will test IT's mettle. While solving technical integration difficulties, SOA will encourage complex forms of business integration and "composite" applications. Web services management systems must embody all that IT management knows about the state of its portfolio to meet strategic business objectives.

The "governance" buzz is really a cry for IT to step up. Tight budgets, regulatory stress and public consequences of system failure have the business side pleading with IT to oversee systems that often have roots outside the corporate center — in acquired companies or multiple lines of business.

Some see IT governance as evidence of the pendulum swinging back toward IT centralization. But with its ships floating all over the globe, Royal Caribbean Cruise Lines is similar to many organizations that can't recentralize and consolidate physical systems. Richard Shapiro, manager of IT program administration, says his department manages about 1,000 projects simultaneously at corporate locations and on the 28 ships in Royal Caribbean's fleet. A tough peer-review process keeps projects on track — not more technology in the old "build it and they will come" mode.

Shapiro finds that the key to governance is letting central IT set enterprise standards, rationalize the deployment of resources and resolve conflicting interests among stakeholders. Royal Caribbean's IT management uses Computer Associates' Clarity tools for forecasting, tracking, auditing and reviewing the progress and effectiveness of all projects. Guided by the advice and consent of a steering committee of business and tech leaders, IT projects are business projects.

Steering committees can't make decisions without good information. Just as IT must break through information "silos" for other business priorities, it must do so to improve its own function. Through a dashboard, Shapiro has a real-time view of the review process. Similarly, Hallmark Cards depends on performance metrics in its PlanViewPPM suite to track projects against objectives.

Tools from CA, PlanView as well as Mercury Interactive, Pacific Edge Software and Troux Technologies are helping IT make fact-based decisions. As IT establishes an integrated, high-quality data infrastructure of its own, CIOs can finally speak the same language as — and integrate information with — corporate financial management and other business functions.

ITIL: What the Doctor Ordered

Getting beyond the silos is also critical for adapting configuration, change and services management to the new complexities of service-oriented architecture (SOA). To reduce error and avoid reinventing the wheel, organizations are working with best practices such as those outlined in IT Infrastructure Library (ITIL), Control Objectives for Information and Related Technology (COBIT) and Capability Maturity Model Integration (CMMI). Judging by its momentum, ITIL is the most important framework.

Developed originally for the U.K. government, ITIL offers a repository of leading IT service management practices. The framework provides best-practice definitions and criteria for operations management. The result is a "playbook" of the functional, operational and organizational attributes required to deliver quality systems and IT services.

ITIL's strongest base has always been Europe, but with the U.S. government mandating its use, interest is picking up in the States. Forrester Research estimates that 30% of U.S. companies with more than $1 billion in revenue are already working with ITIL.

According to Gartner senior analyst Steve Bittinger, organizations that embrace ITIL gain credibility, cut costs and improve service. ITIL is transitioning from merely describing service delivery processes to providing guidelines about how to implement those processes and measure service quality.

Companies discover that best practices demand cultural changes. "There's always resistance," says Dave Brillhart, senior IT architect with IBM Global Services. "We're talking about a long-term commitment to a new way of running IT. Data centers have to grow up. ITIL is a rite of passage."

ITIL's Impact on SOA and BPM

Organizations hope ITIL will give them a leg up with difficult SOA initiatives. "Companies look to SOA to integrate systems, improve visibility into information sources, and standardize on XML," Brillhart says. "But no matter what the purpose or desired end state, I have found that if ITIL or other frameworks are in place, efforts to gain agility and efficiency with SOA are greatly simplified."

ITIL also links SOA and business process management (BPM). "ITIL is about IT processes; BPM is about business processes," says BPM expert Peter Fingar, executive partner at the Greystone Group. "IT processes should be a subset of business processes, dedicated to managing IT."

Brillhart sees businesses as defined by their processes, and these processes can be dissected and refactored into sequences of "components" that both consume and provide resources or services. "Contracts" must set out the cost and performance expectations of the services IT delivers to support the execution of business processes. ITIL helps define these parameters and creates a basis for ongoing negotiation between business and IT.

"Business process modeling should generally lead to IT implementation based on SOA design patterns," Brillhart says. "However, SOA is really an IT implementation approach that doesn't need to be exposed back to the business." Brillhart thinks that the business-IT relationship should be based on the agreements about expectations forged through ITIL implementation.

Healthier times lie ahead as tools for IT governance and management mature. With SOA a reality, IT can't just function like a business: It must be part of the business.

David Stodder is editorial director and editor-in-chief of Intelligent Enterprise. Sue Bushell is a technology writer based in Australia. Her work has appeared in numerous publications and book compilations. Write to her at [email protected].