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Companies with multiple product or service lines often find that their business has become siloed where each division has its own separate agenda, which tends to be production-oriented rather than customer-oriented, or skewed toward the divisions specialized view of its customers. As a result, the company does not have a clear picture of the total customer, and customers often feel they are dealing with several companies instead of just one.
A bank, for example, offers its customers loans and mortgages, savings accounts, credit cards, investment services, etc., and maintains customer data in each area. All of the separate customer activities are easily tracked, but to truly serve customer needs, the bank needs integrated data that shows the total picture of each customer.
So, what is standards-based, service-oriented governance?
Governance has to do with how an organization makes decisions about strategy, money, time, the use of resources, and other issues. Service-oriented means working to meet the needs of customers: What are their needs, how do you know youre meeting them, and what metrics do they need to know to confirm that youre doing a good job for them? Standards-based governance means having a methodology and standardization to guide functions of a similar nature across an organization.
Standards-based, service-oriented governance requires a formal structure whose members have a strategic-enterprise view of the customer that aligns the different divisions views. In many cases, a company takes a big step in this direction when it introduces an enterprise-wide resource planning application such as SAP, PeopleSoft, or Oracle.
Many organizations have had such software in place for a while, but theyre just now considering how to use it to make their operations service-oriented. Theyre asking themselves such questions as: Whats best for the customer? How does that play across all the information we have for any given customer?
A service-oriented business needs to stay on top of numerous issues that cut across product or functional divisions. Organization governance must pay careful attention to such questions as:
1. What are the rules for creating new services or modifying existing services? Any change that reaches across divisions has a potential impact elsewhere in the company. Rules are needed to help the divisions understand clearly what the other is doing. For example, if a cable company adds telephone service to the account of a customer who already has TV and Internet service, what does that mean for billing? How does it affect the line crew in charge of hookups?
2. Who is in charge of authorizing, identifying, and monitoring changes to the governance? For companies running one enterprise IT architecture, this responsibility generally falls to the enterprise architect. (Maybe theyre called a data architect or information architect in your firm.)
More complex systems maintained by teams of architects will require input from a wider group of people who can judge how the change will translate through all application sets, each systems owner, and perhaps each business owner, should be involved in the governance.
3. Who maintains the standards? Who will change them as needed? Generally, this should be the same entity thats monitoring the changes. It could be a single person, a committee, or people from different IT architectures working together.
4. Who owns the data? A bank may have customer records in the loan system, the credit card system, etc., containing names, addresses, Social Security numbers, and other sensitive personal data. The enterprise owns the data, but someone, ultimately, is responsible for making sure its all accurate, consistent, and secure.
If a cable company cuts a customers service by mistake, the customer should be able to call one number and have the problem fixed promptly. There have been cases, however, when two or three departments of the same cable company, responsible for TV service, Internet service, and cable installation, have failed to communicate with each other, resulting in annoying delays. Standards-based governance can ensure better customer service in such cases.
5. Who has access to the data? The billing department might own customer records, but who else has the ability to use such potentially sensitive information? In the case of the cable company, theres no reason that any customer information, other than the address, should be available to the line workers. It needs to be clearly established who has access to what.6. Who defines the nomenclature? For example, what is a customer? Is it an individual, an organization, or the building to which the product or service is delivered (e.g., a condominium or office complex)? Utility companies often define a customer as a household. Within a complex organization, there might be more than one definition; billing might define a customer as the person who receives the bill, whereas delivery might define it as the address to which a product is delivered. A landlord might receive a utility bill, but the service is delivered to a property across town.
There are two basic models for service-oriented governance. Some companies, especially those that deal in a single product and are accustomed to a top-down authority structure, might prefer a centralized system, with an enterprise-wide team setting the rules and making all major policy decisions.
Others, particularly companies offering many different services, might prefer the opposite: a distributed governance system organized along the Internet model, with self-enforced standards that all groups across the enterprise agree upon. In the latter case, it is nonetheless important to have a central team or committee to maintain and update company standards, drawing input from all divisions.
The advantages of the distributed model are that it is driven by division experts who are close to product lines and the workings of their enterprise units, and who are able to respond to customer or user input. The downside is that making changes to the standards and processes can be slow, as buy-in is needed by all significant players throughout the company.
The top-down approach has the advantage of efficiency; change can be made quickly and enforced effectively. Moreover, a centralized governance team can usually see the big picture of a companys interests and that of its customers more clearly than division managers can.
The downside is that, lacking sufficient input from the various departments, governance actions may not always be optimum for all groups within the enterprise. Its a balancing act. Perhaps the best model is a two-tiered approach that:
Ted Stephens is an associate principal at Intellilink, a management consulting firm that improves the productivity of knowledge worker automation. His areas of expertise include; IT governance, project management and IT portfolio management. He can be reached at firstname.lastname@example.org.