Governance: The Magic Triangle

Key concepts:

1. Underlying an effective ITO execution, a governance structure that sets a proper power and responsibility balance is crucial.
2. Power and responsibilities could be separated into 3 roles, namely sponsor, architect and execution agent.
3. The Magic Triangle is a model that enables the roles to balance their power and responsibilities. In turn, this enables the proper mutual governance that leads to the ultimate success of ITO.

Separation of Powers, in an IT Project's Perspective

In an IT project, typically there must be the following powers. They have to interact efficiently and effectively in order to yield the success for the project.

• Budget - cash is king. Project sponsors control the project budget. They have all the rights to appoint appropriate parties, enforce necessary governance and require compliance to execution policies. The key to exercising the budget power effectively is how sponsors make use of the right chemistry created by a wise budget control. It is about the right allocation of budget to different area of responsibilities and different corresponding roles.
  
• Control - the soul and brain. A proper control structure, together with a proper control mechanism, brings the necessary chemistry as mentioned above. Here, the key is the clear understanding on what have to be controlled and who is appointed to control. It is crucial that the party exercising the control is independent from the party under control. Otherwise, it is tempted for this single party responsible for control and execution to take a more cost effective but less transparent approach for the whole execution cycle.
  
• Execution - hands over the realization. Execution agents always have the final say on how a work product becomes. It is not their responsibility for non-complying work products should the expectations not well communicated. It is not their responsibility should the road to meeting expectations not well controlled. To properly manage this power of execution, formal and proper demands, and subsequently the control to achieving such demands have to be institutionalized into the execution environment.
  

The Orthogonal Roles

By the separation of powers, each power has to be exercised by a separate role and each role has to be played by an individual party.

In an ITO setting, there at least the following mutually exclusive roles and they should be mapped to the above powers accordingly:

• Sponsor possesses the Budget power. The sponsor is the source of ideas, demands and resources. By these tokens, it is inherently the ultimate source of all powers. However, by delegating the control and execution powers, it ensures the best talents could be assigned to the best suitable jobs.
  
• Architect possesses the Control power. The architect is responsible for further developing the ideas of the sponsor. Hence, the architect has to perform feasibility study and the overall architecture design, if the feasibility is assessed to be positive. An architecture design provides the blueprint for governance and control of execution. As the origin of this design, the architect is also the best role to enforce project control. However, to ensure the architect is optimizing the benefits and balance of the project, on behalf of the sponsor, the architect should be prohibited from performing the actual implementation, i.e. execution.
  
• Implementer posesses the Execution power. The implementer is contracted for a simple and singular purpose - to implement the design by the architect. Certainly, an effective implementer should also suggest to the architect know how the implementation could be performed more efficiently and effectively and advise on any risks identified along the project execution.
  

The Magic Triangle

"The Magic Triangle" is a model that we used to evaluate the balance of powers among the 3 roles - Sponsor, Architect & Implementer. This model could be used as a tool for visualizing different patterns of power balance. Real cases of ITO projects could then be evaluated using this model.