A Harvard Business Review (HBR) and Oracle Study on IT Business Alignment (Podcast)

To download free reports on IT Alignment and best practices on steering committee’s role in shaping an organization’s governance framework, enter your E-mail below. You will learn the following:

• Business strategy formulation and role of committees
• IT strategy and IT Steering committees
• Corporate and IT alignment issues
• Role of steering committees in organization’s strategy formulation
• Best Practices in establishing IT and other Corporate Steering Committees
• and more

In this episode, we will review some best practices related to establishing an IT Steering Committee function. An IT steering committee ensures alignment of IT and business and thus is a crucial function that is needed in organizations.

So, first, let’s take a look at what is an IT steering committee and the benefits that it serves to the organization. After that we will review some best practices related to establishing this function within an organization.

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IT steering committees bring key IT and business stakeholders in a common forum to discuss matters related to strategic planning, program planning and project and program approvals. A typical steering committee usually includes the CIO, other key members of IT management, and executives from various Lines of Businesses such as Finance, Marketing, and others. When instituted correctly, programs are strategically planned and approved mutually between both parties, and thus one can expect IT and Business alignment.

Although a number of organizations have IT steering committees in place, only a number of them are really effective. In fact, a research conducted by the Info-Tech Research Group highlighted that 88% of CIOs believe that their governance structure and processes are not effective. As IT steering committees serve as an important glue in the overall IT governance process, they can encapsulate a number of critical decision making processes and activities, especially those related to the review and approval of key technology related initiatives. Due to the criticality of this organizational function, it’s prudent therefore that organizations should invest in improving the effectiveness of these committees.

Best Practices

Here are some best practices that an organization can follow to improve their effectiveness.

• Ensure Executive Support – One of the most important factors that contributes to the success of IT Steering committees is to ensure that they have the full backing from the CEO and LOB senior executives. Obviously, if the committee’s main function is going to be to mutually review and approve an organization’s key projects and initiatives then it must have that high-level support for it to be effective. This also ensures that both IT and business become accountable for their decisions rather than having one group blaming the other for failed IT projects and initiatives.
• Establish a Committee Charter – One of the reasons that committees usually fail is the lack of an appropriate structure and definition of key processes that are needed for the ongoing execution of the committee functions. Therefore, one of the important steps when initiating a steering committee is to document its charter. The charter helps shape the overall governance structure, processes and roles of the committee and ensures that the committee continues to be effective. The charter should provide details such as the purpose of the committee, its scope, key roles and responsibilities of the committee members, details on various processes such as those of project approvals, ongoing deliverables, governing documents, etc.
• Integrate committee with the organization’s PPM processes – Some organizations have Project and Portfolio Management or PPM functions in place that provide a vehicle for ideas and initiatives to be evaluated, and prioritized. The selected projects are then put through a project execution framework. In such cases, the organization should ensure to effectively integrate IT steering committee processes with the organization’s project portfolio management or PPM processes and ensure that the functions are not duplicated or missed and that the overall framework is properly defined.
• Establish Project Prioritization and Selection Criteria – One of the most important IT and business alignment functions is that of project evaluation, prioritization, and selection. This ensures that only those projects are selected for execution that are properly aligned to an organization’s strategy. In this context, the steering committee that is made up of key members from both the...