IT Governance and the LMS – Principles of IT Governance

IT Governance and the LMS is an attempt to explain IT governance operationally as it relates to any application using the LMS as an example. So although this post will substitute the ‘any application’ with the LMS, readers should be able to transfer this illustration to their SIS, ERP, CRM, or HRIS while getting a deeper understanding for IT governance.

The idea for this post was inspired by a question from Laura Gekeler in response to the 5 Myths of IT Governance.  Just for background, Laura is an LMS Admin at Notre Dame. Laura also writes Laura Gekeler Speaks Her Mind as a personal blog which is worth adding to your reader. Here is Laura’s question on ‘service governance’:

Scenario: Let’s say your institution has a Learning Center that recognized the value of an LMS long before anyone else, and provided a solution for a small number of faculty. Over time, more faculty joined in. The Learning Center recognized they were getting in over their heads, and appealed to the central IT shop to host the servers in the official Data Center. No governance. Central IT is now the de facto service owner. What strategies would you recommend to the CIO for bringing governance to a service faculty recognize as adding value, but other initiatives crowd out recognition of same for the Provost or others?

Short Answer: I wouldn’t. Here are some short reasons.

  1. In this scenario the IT department is merely a provider of hosting services. So the service Central IT owns is the hosting service not the LMS Service.
  2. IT Governance does not originate from IT although the CIO can certainly influence the organization to establish it.
  3. The ‘problem’ to be solved in the scenario seems to be the recognition of value which is a responsibility of the LMS Owner to demonstrate, not the CIO.

Now let me take a long trip around the barn to explain this more fully in two posts.

Principles of Governance

Institutional governance, or corporate governance if you prefer, starts at the top with the board of directors. Institutional governance represents the mechanics the board employs to ensure the institution is operating within its charter and using its resources in a responsible manner to fulfill its charter.

The focus of for-profit corporate governance is on creating shareholder wealth in the form of returns through dividends and share price. This is a fiduciary responsibility of the board which courts have recently affirmed can be very narrow.

Corporate governance in non-profits focuses on the ’cause’ or ‘service’ which gives them non-profit status. But that doesn’t mean there is no focus on returns. It just means the returns might be more intangible.

Governance in the public sector, like non-profits, focuses mainly on intangible returns  defined by public policy interests and services for the public good.  In government though the obligation of the ‘board’ is almost always statutory.

Operationalizing Governance

The primary vehicle for operationalizing governance is through control over capital investments and operating funds. That is why college boards, especially public institutions, require the board to approve all employment decisions and all expenditures including approving a detailed budget.

The intent is to ensure the financial and human assets of the organization are focused on maximizing the returns required under their charter or statutory requirements.

So for-profit boards want management to maximize the return on capital to increase revenues and reduce expenses so that shareholder wealth can be increased. Non-profit/government boards want to maximum returns on capital so that it can be compounded or reinvested to do more good – feed more homeless, pave more miles of roads, reduce crime, and accept more students.

So at any moment the board or senior management must decide between replacing the boiler or developing a new product. Buying iPads or hiring more sales people. Upgrading the network or buying real estate for future growth. At times decisions involve trade-offs to replace the roof or simply repair it.

The decisions on which investments to make involves risks, trade-offs, and expectations for a specific return on each investment. We try to capture these elements in a cost benefit analysis or ROI so that unrelated investment options can be compared.

Sometimes decisions involve financing a single standard solution or allowing two or more that are functionally equivalent. This can be two LMS platforms, two Intro to Chemistry courses (majors and non-majors), multiple sections or large group courses.

These decisions can seem simple yet be very complex such as a city council’s decision on buying a single purpose pumper fire truck versus only a combination pumper-rescue fire truck.

These decisions hinge on there being a sufficient benefit (re: return) from allowing duplicates or equivalents versus doing something else with the funds which could be fixing the boiler, hiring additional faculty, or buying an additional police car.

Why Do We Have IT Governance

IT Governance was created out of necessity. The advent of client-server technology began the democratization of IT with an explosion of lower cost systems and applications that could be supported more easily by self-taught admins and developers.

But mostly IT governance, just as with the emergence of the project management function, was driven by enterprise risk management because of the colossal failures in IT projects and horrible IT investment decisions. Most notable among these were big MRP/ERP implementation failures, the dot.com collapse, and failures in big outsourcing deals. And higher education has it share of these failures.

As IT organizations improved their maturity and capability in governance and project management, organizations began to see that governance and project management needed to be an enterprise competency across all departments not just in IT.

But because IT is still a significant portion of capital spending and because the competition for IT resources cuts across all departments, we set up IT governance committees to ensure technology investment decisions make sense (priorities and returns) from an enterprise perspective and the claims of project owners get delivered.

Continue reading IT Governance and the LMS – Who Owns Your LMS.

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