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Corporate Governance
Corporate governance is the system by which companies are
directed and controlled. Boards of directors are responsible for
the governance of their companies. The shareholders’ role in
governance is to appoint the directors and the auditors and to
satisfy themselves that an appropriate governance structure is
in place. The responsibilities of the board include setting the
company’s strategic aims, providing the leadership to put them
into effect, supervising the management of the business and
reporting to shareholders on their stewardship. The board’s
actions are subject to laws, regulations and the shareholders in
general meeting.
Source-ISO 38500
IT Governance Principles
1. Responsibility
2. Strategy
3. Acquisition
4. Performance
5. Conformance
6. Human Behavior
Source:ISO 38500
Three projects
Project A
• Small vendor with limited capability sells package to large company,
based 3000 miles away.
• First sale of package
• Agrees to customise application for purchaser needs
• Business owners, experienced professionals, let development head and
team lead them into the deal
• All starts well, but after a few months there is a team in the client and a
team at home base, two versions of the package are emerging
• No contract with client is in place
• Development head quits
• Problems begin to emerge both at client and at home base
• Client executives at ‘war’ with each other
• Relationships deteriorate – bills not paid
• Vendor manages to put contract in place
Learning from Failure © June 2009 6
Peter M Salmon & Manning Charles & Associates Ltd
Manning Charles &
Associates Limited
Project B
• New client won by a systems integrator
• Deal involves using third party application and database software to
implement new, high volume transaction system for new market entrant
in highly competitive business sector
• Personal relationships initially strong
• Problems start to emerge
• No contract in place
• Relationships begin to deteriorate
• All parties bring in new management, new client management wants
internal cheap solution
• Third party sub-contractor begins to play rough, no back to back in
place
• Client starts to build internal solution
Project C
• Major BPO deal both parties for various reasons wanted to do deal
• Package customisation turned out to be materially mis-scoped
• Legal, regulatory and market requirements much more complex than
initially understood
• Vendor unable to meet time-frames
• Customer proved extremely difficult to manage and refused to make
timely decisions
• Customer business processes poor
• Customer had history of failed projects
• Constant scope creep
• Poor contract
Outcomes
Principle 1- Responsibility
• Individuals and groups within the organization understand and accept
their responsibilities in respect of both supply of, and demand for IT.
Those with responsibility for actions also have the authority to perform
those actions.
• In each case responsibilities were not understood
Principle 2- Strategy
• The organization’s business strategy takes into account the current and
future capabilities of IT; the strategic plans for IT satisfy the current and
ongoing needs of the organization’s business strategy.
• Broadly satisfied in each case as regards the 3 projects
Principle 3- Acquisition
Principle 4- Performance
Principle 5- Conformance
Lessons learned
Lessons learned