Well, having now finished with the Sidney Fine Art Show – which was incredibly successful – it’s time to get back to this blog.
As I prepare to head down to Seattle where I am speaking at SIMposium09 on November 9th – just 6 weeks before my 65th birthday – I have been reflecting on the underlying foundation of what I have been doing over the last 20 plus years – what have come to be known as the “four ares”. They have certainly guided my thinking and, since they were published in The Information Paradox, continue to be widely referenced – sometimes those references are even attributed. The idea came when I was presenting a diagram of, what we then called, the Information Resource Planning approach, to the executive of a large Canadian utility. As I was going through it, one of the executives stopped me, saying: “This is all “gobbledygook” to me – can you just explain it in plain English?” So, I turned the somewhat obtuse and long-winded statements on the chart into the questions each box was trying to address. What had been somewhat of a “talking head” session turned into a lively discussion which resulted in a successful assignment with very positive outcomes. After that, I applied the same approach to almost everything I was doing including, at the time, DMR’s (now Fujitsu’s) Macroscope methodology – and the four “ares” were born. They have been “tweaked”, but have essentially remained the same for more than two decades.
At the time, I am not sure that I had even thought about the term governance, or could have described what it was. However, over time the two ideas have come together in that, in my view, the ability to continually ensure that enterprises can get positive answers to the four “ares” is the essence of effective enterprise governance. I use the term enterprise governance because, although the origins of the four “ares”, and much of their current application relate to governance of IT, they are equally applicable to the broader enterprise governance view. Indeed, one of the comments/criticisms I have had of both The Information Paradox, and the Val IT™ Framework, is that the term IT should have been dropped, or at least de-emphasized, as they are both more broadly applicable to any form of investment or, indeed, any form of asset.
For those of you still wondering what I am referring to, the four “ares” are:
- Are we doing the right things?
- Are we doing them the right way?
- Are we getting them done well?
- Are we getting the benefits?
Whenever I am talking with executives, I always have to pause when I get to the four “ares”as they invariability write them down. They are questions that are easy to understand although, unfortunately, not always easy to answer. Indeed, I often feel guilty that they appear too simple. I also feel somewhat guilty about the term “right” in the first two questions. I am not sure that there can always, or even ever be a totally right answer to those questions. However, asking these questions can definitely eliminate a lot of “wrong” decisions. A key point about these questions is that they need to be asked continually. Whilst important to ask them when an initial investment decision is being made, it is equally important to ask them throughout the full economic life cycle of that investment decision. That life-cycle includes a number of stages:
- Development – creating the necessary capabilities (hereinafter referred to as assets)
- Implementation – delivering the assets
- Value creation – adopting and using the assets to achieve the expected level of performance
- Value sustainment – assuring that the assets resulting from the investment continue to create value, including additional investments required to sustain value
- Retirement phase – decommissioning some or all of the resulting assets
As further illustrated below, within the context of governance of IT, the first and last questions relate to the “demand” side – business governance of IT, while the second and third relate to the “supply” side – IT governance of IT. Collectively, they represent a complete view of enterprise governance of IT.
As we said in The Information Paradox [with some updates], “ Tough questioning is also critical to get rid of silver bullet thinking about IT and lose the industrial-age mind-set that is proving extremely costly to organizations. Asking the four “ares,” in particular, helps to define the business and technical issues clearly, and thus to better define the distinctive roles of business executives and IT experts in the investment decision process. Are 1, Are we doing the right things? and Are 4, Are we getting the benefits? raise key business issues relating to both strategic direction and the organization’s ability to produce the targeted business benefits. Are 2, Are we doing them the right way? raises a mix of business and technology integration issues that must be answered to design successful [IT-enabled] change programs. Are 3, Are we getting them done well? directs attention to traditional IT project delivery issues, as well as to the ability of other business groups to deliver change projects.”
In Val IT, specifically in version 2.0, we fleshed out these questions and also expanded them to include IT services, assets and other resources (while this is in the context of IT – they could equally well be expanded to include other assets).
1. Are we doing the right things? The Strategic Question.
- Are our investments:
- in line with our mandate and vision?
- consistent with our business principles?
- contributing to our strategic objectives, both individually and collectively?
- delivering optimal benefits at an affordable cost with a known and acceptable level of risk?
- Are resulting IT services, assets and other resources continuing to deliver value by addressing real business needs and priorities?
2. Are we doing them the right way? The Architecture Question.
- Are our investments:
- in line with our organisation’s enterprise architecture?
- consistent with our architectural principles and standards?
- Are we leveraging synergies between our investments?
- Are our IT services delivered based on optimal use of the IT infrastructure and other assets and resources?
3. Are we getting them done well? The Delivery Question.
- Do we have:
- effective and disciplined management, delivery and change management processes?
- competent and available technical and business resources to deliver the required capabilities and the organisational changes required to leverage them?
- Are services delivered reliably, securely and available when and where required?
4. Are we getting the benefits? The Value Question.
- Do we have:
- a clear and shared understanding of what constitutes value for the enterprise?
- a clear and shared understanding of the expected benefits from new investments, and resulting IT services, assets and other resources?
- clear and accepted accountability for realising the benefits, and relevant metrics?
- an effective benefits realisation process over the whole investment economic life-cycle, to ensure that we are maximising business value?