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The cost of poor IT governance

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Kathy Gibson reports from SMEXA 2015 – The business could be the loser if companies fail to invest in service governance.

This is the word from Pink Elephant’s Marina le Roux, who stresses that poor governance could have numerous negative effects – and end up costing not only money.

The signs and symptoms of poor governance include failed projects, cost overruns and poorly scoped projects, she points out.

Unplanned changes is another symptom that should raise warning flags, as they can have unintended consequences, while system interruptions and downtime are sympomatic of poor planning.

Cost overruns are a dead giveaway, as are high call centre volumes, security threats and complex operating models.

Poor projects also have bad documentation and lack any cohesive knowledge management frameworks.

Le Roux explains that poor IT governance also impacts every area of the business, and has negative effects on people, process and technology throughout the organisation.

“Without the business there isn’t any IT; but without IT there isn’t a business,” she says.

“The true impact of IT governance is seen in customer experience.”

The ultimate end that should be kept in mind is that poor IT governance can result in failed businesses, Le Roux stresses.

The elements that should be kept in mind to ensure positive IT governance include:

* Align business and IT by understand the stakeholder needs. “This means everyone must aim for the same target.”

* Cover end to end business processes. “So it’s important to understand where IT interacts with the customer through all the processes. Then we need to look at how IT interacts with over point where the customer interacts with the business. If you don’t understand this you won’t get what the business it about.”

* Apply best practices, all of which is contained in CoBit 5. “We also have to make sure we don’t hammer processes to fit a business model; you need to look at the business need and how to implement compliance in a way that makes sense.”

* Enable a holistic view. “There are pockets of excellence within business units – but understand that the business is only as strong as the weakest link – as soon as there is some strain on that link the business will suffer.”

* Separate governance from management.

“And don’t forget the business,” says Le Roux. “We tend to bury our head in IT governance and don’t think about the business – but this is what’s important.”

If IT governance is successful, Le Roux says there are a number of positive business outcomes. These include optimised business process; smarter business analytics; timely mergers, acquisitions and outsourcing; compliance with laws and regulations; and positive customer experience which will lead to increased revenues and a business that understands the value that IT brings.