Prior to 2001, IT governance was a foreign concept at the World Wildlife Fund (WWF). Business unit leaders decided which IT projects to fund without documenting their requirements or drawing much input from the IT organization. The IT department was expected to support all new applications that were introduced, and modifications to systems were communicated to the IT staff very informally.
Back then, "there was nothing written down for a system change," says Deepika Bardhan, the WWF's manager of marketing systems, who has been at the nonprofit organization for 12 years. "A business manager would just walk into my office and ask for one."
In those instances where the IT department was involved in selecting third-party software, the IT team was expected to purchase the lowest-cost system.
"We worked with whatever funding we had available," says Lynn Parsons, manager of operations systems and a 17-year WWF veteran.
In short, the culture within the IT department at the Washington-based WWF exhibited all of the characteristics of a typical nonprofit organization.
But that all changed when Gregory Smith came aboard as CIO five years ago. Before joining the WWF, Smith had been a senior IT executive for another nonprofit in Washington, AARP, where he oversaw software development, e-business and a business intelligence repository of information on more than 32 million members. WWF executives had sought a CIO with a nonprofit background. But Smith, who has also worked in IT management at Sallie Mae and as a senior principal consultant at PricewaterhouseCoopers, quickly decided that the entire organization would benefit from adopting a for-profit IT governance structure.
A Hybrid Model
As a starting point, Smith had to determine which type of IT governance structure would work best at the WWF. He did his homework by hobnobbing with other CIOs and evaluating IT governance models that have been analyzed by Forrester Research Inc., IDC and MIT's Sloan School of Management. In the end, Smith decided upon an IT governance model that combines "IT monarchy" with "IT duopoly."
According to Peter Weill and Jeanne Ross, co-authors of IT Governance: How Top Performers Manage IT Decision Rights for Superior Results (Harvard Business School Press, 2004), organizations that operate under an IT monarchy place key business unit and technical decisions in the hands of the CIO. Under the duopoly method, decision-making for IT budgets, applications and technologies is shared among the CIO and business unit leaders. The approach that Smith selected blends the two techniques.
CIO Gregory Smith (bottom right) and his team (clockwise): Tim Sivia, Anne Topp, Deepika Bardhan and Lynn Parsons.
Image Credit: Claudio VazquezFor example, using the IT monarchy approach, Smith and other members of the IT organization determine IT infrastructure updates based on growth, usage and other criteria. The infrastructure technologies that the WWF's IT department has selected include voice over IP, storage-area networks and e-mail archiving systems.
"In this case, the owner of these systems is IT, and that's why we make the call," says Smith.
But when it came down to determining the needs for timekeeping, payroll and human resources information systems a few years ago, the WWF's IT and business units worked together under an IT duopoly approach. Users were engaged early on, helping to create well-defined process requirements, and they were active members of the project rollout teams, says Smith. In this case, the HR department "owns" the systems, Smith says, "and that's why they're engaged in a duopoly."
|World Wildlife Fund U.S.|
Smith's IT governance model was initially met with skepticism, starting with business leaders who were resistant to change and weren't keen on the new rigors of documenting project requirements in order to obtain approvals and funding. Likewise, his changes to the WWF's IT operating philosophy weren't universally accepted by IT people, who were also accustomed to doing things a certain way.
"I didn't like it," says Parsons. She was used to working under the constraints of a limited budget and selecting the lowest-cost systems, but Smith challenged the IT organization to purchase and install best-of-breed, Tier 1 types of systems from vendors such as Oracle Corp., Ceridian Corp. and SAS Institute Inc.
To help sell the concept of adopting Tier 1 systems early in his tenure at the WWF, Smith spoke frequently to business executives and IT staffers about the benefits of enterprise systems over less-expensive alternatives, including the financial stability of large, established vendors, better and more timely product upgrades, and the availability of vendor support staff. Those conversations helped him establish baseline costs for adopting these systems prior to vendor selection. "I sold the need to look at better solutions as part of my budgeting business case and outlined cost estimates for these vendors upfront," says Smith. "Once the money was allocated and approved by the board, we defined the requirements and went shopping."