Kathy Gibson reports from SMEXA 2014 – The buzzword today is about using IT to enable change, but there’s a lot to be done to make sure it works.
Richard Cascarino, from IT auditing company Richard Cascarino and Associates, quotes GM’s Jack Welch that IT has been the longest-running disappointment in business history.
He asks how companies achieve value and how it fits in with risk.
Pointing out that IT investments are about enabling business change – and enormous returns if managed properly – it’s also true that without effective governance and management, there is an equal risk of destroying value..
“So the question we need to answer is are we maximising our investment in IT-enabled change,” Cascarino says. This needs to include optimal benefits, affordable costs and an acceptable level of risk.
“Users always need to answer the question: are you getting any benefits? It’s true that 60% of projects are killed within six months of going live – despite the huge investments that companies make.
Cascarino offers examples of expensive and lengthy IT projects that have been implemented for the wrong reasons and are abandoned almost as soon as they go live.
“Is technology be an enabler or a disabler?” he asks.
This necessitates looking at what enabling technologies are. “They can be applied to drive radical change in the capabilities of a user or culture. They can also be used to update and streamline technical systems.”
Importantly, the business most organisations is in has changed radically over the last few years – and a lot of the IT we use today was developed for these different business scenarios.
To succeed with enabling technologies, many companies are looking to change their businesses, usually through business process re-engineering – which can be successful, but requires new training and skills requirements as well as new rules for competitive advantage.
New technology also brings new problems in control, security and auditing.
“There are new rules for separation of duties, new economies of scale and changing price:performance ratios, which means that auditors need to follow a very short audit trail for the short time it exists. This means continuous control monitoring and continuous process auditing systems are needed.
The cloud also adds a new element to audit trails, as it could be impossible for auditors to follow them in this environment.
“Cloud computing is a major enabler,” Cascarino says. The cloud lets organisations use internet-based service to support their business processes; and lets the rent IT services on a utility-like basis.
“There are many benefits to being involved in cloud computing,” he says. These include rapid deployment, low start-p costs, costs based on usage or subscription, and multi-tenanted sharing of services and resources.
The essential characteristics of cloud include on-demand self-service, ubiquitous network access, lower costs and better availability.
“So why aren’t more people doing it?” he asks. Often user don’t even know that they are using the cloud – but that means they have no idea or control over what happens inside the cloud.”
Security is a major issue in any environment, but Cascarino points out that there are many more opportunities for security breaches when IT moves into the cloud.
“But there are also additional attacks that can happen in the cloud,” he adds.
CoBIT 5 provides a methodology for measuring the performance of technology as an enabler, he adds.
“Part of it is the criticality of IT governance – looking at and supporting the business objectives and business needs of what decisions needs to be made, who is responsible for making them, how they are made and the processes and supporting structures that make it happen.”
Agility is not a new buzzword, Cascarino says, but is still important today.
“Agility is the ability to adapt,” he says. “You need to agile and flexible, and your IT systems need to flexible.
“Your IT systems that you are developing now need to drive your company 10 to 15 years into the future. Do you know where you will be in five years’ time?”
Unfortunately we are not paying a lot of attention to agility at the moment, he points out, with companies still developing system the way they always have.
“Nowadays we have moved to IT knowledge-based companies,” he adds. There are new competitive forces coming from various directions, and companies need to be thinking about the future threats.
Reasons that companies miss the target of technology as an enabler are many, says Cascarino.
These include:
* Poor support from top management;
* Poor staff attitude;
* Unclear business objectives;
* Management and users are unsure of their needs;
* IT personnel are unfamiliar with user needs;
* Changes in user requirement and the way the company responds to competition;
* Organisational changes during the project;
* Failure to understand inter-relationships between parts of the organisation; and
* Technology changes.
There is a lot we can do better, he adds, and there are many areas companies can look at.
“Technology needs to be assessed and if it’s not going to be useful in a particular part of the business, then leave it alone.” Assessing the technology involves looking at information needs, capacity building needs, assessment of the enabling environment, and financing.
Once the assessment is done, the next step is to look at technology itself.
Critical success factors include ensuring that the IT intervention is appropriate, understanding the business process, and finding a leader – from the start.
Practical issues include examining the practicality of the new structure, radical thinking, speed and to need to be all-embracing of any new technology.
Companies must also learn to leverage resources, Cascarino says. This means concentrating on a specific agenda, accumulating efficient resources, blending and balancing resources, conserving resources, and recovering resources.
“Overall, the critical niche is where technology needs assessment,” Cascarino says. The weakest link of the technology development and transfer chain is the mechanism for technology transfer – including the financing of it.
“Technology transfer is not a formula, but a process involving learning by doing.
“So we need joint partnerships for technology implementation.”
Importantly, Cascarino says, value is not a technology issue – it is a business issue. “Business ownership of the use of IT belongs to the business not to IT. Without IT the business does not exist.
“We need to go beyond IT governance to enterprise governance of IT, to enterprise value management.”