While most organisations recognise the importance of IT governance, most do not have a holistic view that considers all its dimensions. The concept of IT governance as an umbrella framework encompassing a wide spectrum of arrangements, including the measurement of benefits, has yet to emerge.
This is one of the major findings of a recent global PricewaterhouseCoopers (PwC) study into IT governance. The other major findings were that IT governance is mostly driven by top management; the benefits of implementing IT governance are not measured and that organisations find the measurements difficult to quantify.
“The survey shows that IT alignment is the highest rated driver and desired outcome of IT governance practices,” says Angeli Hoekstra, director of PricewaterhouseCoopers and globally responsible for IT Governance Services. “A large majority of our respondents recognise the importance of IT alignment in order to deliver sustainable business results, and feel IT governance is one of the best means to achieve this.
“At the same time, however, the focus of IT governance initiatives is still very narrow by focusing mainly on risk and control. The initiatives are not considering IT Governance from a holistic perspective that can be used to enhance the value of IT for the organisation.”
The study also found that IT governance is not being properly measured and managed.
“In many instances the desired benefits of IT governance are not defined upfront, which makes it impossible to measure them and which makes it more difficult to gain acceptance for changes that are required to introduce better IT Governance practices” says Hoekstra.
“When the performance of IT governance practices is measured, some organisations are measuring the governance process and how it works (performance indicators), but only a small number of them measure hard benefits or the eventual outcome of the governance practices (outcome indicators).
“The latter, although a clear minority, have reported the realisation of important benefits, such as cost reductions, improved customer satisfaction and enhanced alignment between IT and business,” she says.
The study also found that most outsourcing arrangements lack appropriate IT governance considerations, and that the IT governance aspects of outsourcing agreements are almost exclusively centrally managed by the corporate CIO office.
“Although the level of maturity and acceptance of IT governance varies considerably across organisations, a number of critical success factors were identified from the interviews,” says Gert du Preez, senior manager PricewaterhouseCoopers.
“These include the support of senior management, taking cognisance of the current culture of the organisation during implementation, continuous communication to overcome resistance to change, and measuring and monitoring the progress of the implementation.”
Most CIOs indicated that the current maturity level of IT governance was low and could still be improved.
“Depending on their current situation, focus should be on improving the mechanisms to take important IT-related decisions, and in a later stage, on automation of some of the IT governance mechanisms,” says Hoekstra.
The IT Governance Institute (ITGI) published its second global status report on IT Governance in 2006. The ITGI survey provides insightful numerical data and quantitative feedback on a number of IT governance issues.
The main objective of the PWC report is to provide more detail to the survey statistics as presented in the second global status report on IT Governance. The PWC report elaborates on a number of IT governance practices and issues gathered through face-to-face interviews with CIOs and IT governance specialists within large organisations worldwide.
About 50 CIOs from a range of sectors, such as financial services, manufacturing, IT, telecommunications, and government, were interviewed internationally.