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.
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, 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.
For 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."
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, Ceridian and SAS Institute.
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."
Tim Sivia, the WWF's manager of financial systems, had assumed some of the duties of the previous CIO before Smith came on board. Sivia says he was concerned that enterprise systems being adopted, such as Oracle Financials, might not be a good fit for a relatively small nonprofit organization. "We had been using much smaller, off-the-shelf systems," says Sivia, who has spent two stints at the WWF since 1985. But he later learned that other nonprofits were using similar enterprise systems. Sivia now says that these systems have given the WWF "a lot of flexibility and stability" in handling its operations.
The IT governance model has also added rigor to the WWF's project management practices. Prior to Smith's arrival, IT projects were conducted and monitored on an ad hoc basis, and project teams didn't follow any repeatable processes, he says.
To help gain buy-in for a strong IT project management methodology from the organization's 20-person IT team, Smith told staffers that he would accept full responsibility for any mistakes that might crop up. Although there were doubters, many IT employees recognized that changes were needed and that more exacting project and change management would benefit the organization. "Greg brought in a process that helped people realize that better decisions would be made," says Sivia.
"There's much more of an audit trail with projects now as to who did what," adds Bardhan.
Since imposing more formal project management methodologies, the WWF's IT department has delivered all of its major projects at or below budget and hasn't once overshot its annual IT budget. That has won the confidence of the WWF's executive committee, which has increased the organization's annual IT spending by an average of 3.6 percent for each of the past five years, says Smith -- years when many IT departments saw cuts in funding.
Smith has driven other changes that have also transformed the WWF's IT organization. Prior to his arrival in 2001, the WWF made extensive use of long-term IT contract labor, with some contractors sticking around for as long as four years. Now, contract assignments range from one to six months, and contractors are used, in part, to train full-time IT workers on specific technologies, such as Hyperion.
That approach has helped the WWF's IT staffers hone their own technical skills and beef up their business acumen. "In the past, business leaders didn't come to IT to solve problems," says Anne Topp, the organization's director of network services. "Now, the business trusts us and comes to us because we can add value to their projects."
Craig Symons, an analyst at Forrester Research, says IT groups at most nonprofit organizations tend to lag behind their for-profit counterparts when it comes to adopting IT governance and other leading-edge IT management practices. Smith's approach to managing the WWF's IT activities "may be out in front among nonprofits," he says.
Under Smith's governance, the WWF's IT group has ended several years with budget surpluses. When that has happened, he has donated at least part of the savings to the organization's conservation fund.
Though Smith has brought a for-profit mentality to the WWF, he hasn't forgotten where its heart is.
A focus on IT governance at the World Wildlife Fund has also meant greater control over IT spending.
In addition to reining in contractor costs, CIO Gregory Smith has established application service provider (ASP) agreements for the WWF's human resources, timekeeping and payroll systems. The hosted software deals have generated hardware and software maintenance cost savings of at least six figures over the past three years, including reductions in patch management, back-end database and software upgrade expenses, says Smith.
Moreover, Smith adds, the ASP agreements have had "a positive impact on our disaster recovery plans -- since we don't keep those servers in-house -- and on our disaster recovery contract."
When Smith joined the WWF in 2001, the organization had what he calls an "atrocious" number of PCs: about 650 for 350 staffers -- nearly a 2-to-1 ratio. Smith quickly set a goal of one computer per person. Anyone who wanted a laptop would have to demonstrate a need for it, he says.
Smith has since winnowed the WWF's PC inventory by one-third, to 400 machines. The hardware consolidation has helped the WWF pare its PC software licensing and maintenance costs by 33 percent.