Beyond Management

In advance of the publication of its 2007 CIO Agenda, Gartner has suggested that CIOs have failed to achieve the predicted change in focus from operations management to concentrating on business competitiveness.

If information really is power, then technology is its weapon. But Gartner's report suggests that many organisations have failed to reap the full benefits from their IT deployments.

If the CIO is to deliver enhanced competitiveness, then there needs to be a change in the way that IT is managed in many organisations – and a rethink in the type of tools that are used to support and control it. Indeed the CIO needs to go beyond daily management and look instead at IT governance to ensure that both investment and operation are in line with business strategy – now, tomorrow and in five years' time.

This is where the distinction between CIO and IT manager becomes apparent. Technologists require management systems that ensure the company's IT infrastructure operates at an optimum level on a daily basis. But the CIO needs a solution that helps identify and prioritise strategic investments by providing visibility, accountability and control of IT across the organisation.

EFFECTIVE IT

In essence, IT governance is both a strategic and operational function. The majority of management tools are designed to look at the existing hardware, applications, bandwidth and connectivity, and help IT managers ensure they are running effectively.

In contrast, IT governance looks at all aspects of IT effectiveness: the people, processes and priorities as well as the technology, ensuring that these match the firm's strategic direction. It's an approach that cannot be supported by standard management tools.

The right IT governance solution offers a single door to the various demands made on IT, rather than siloing off essential data on all systems and applications currently in use. It should also offer users the most accurate information on the IT estate at any given point through real-time updates instead of relying on out-of-date information provided by email updates, phone calls or meetings.

The need for efficient IT governance has grown more and more pressing in recent years. Compliance with an increasingly strict and wide-ranging series of regulations is at the top of almost every corporate agenda.

Responsible for the flow of information in, through and out of the organisation, the CIO faces a two-fold challenge. The first is to ensure that the IT infrastructure itself, and its associated processes, are not the source of compliance breaches. The second is ensuring that technology provides the necessary support to ensure that all other departments remain compliant.

However, there is a particular challenge that is associated with the organisational set up found in many companies. Where finance heads, for example, often have a clearly identified role and chain of authority, the personnel structure and responsibilities of the CIO are often less clear cut.

CIO CONTROL

The CFO's compliance role is not challenged by other functional heads or senior figures outside the financial department. Conversely, it is quite common to see individual departments doing their own thing when it comes to IT. It's not unknown for IT projects worth thousands of dollars to be born from water cooler conversations or initiated in informal emails.

The CIO therefore requires tools that help ensure best practice throughout the company regarding the use of IT, and provide awareness of each and every new project. Effective governance enables CIOs to harness IT to automate necessary processes and controls. For example, ensuring that sensitive documents are automatically allocated limited access privileges.

And once controls are in place, a good IT governance solution will monitor their effectiveness. It will specify, standardise and automate workflows and processes so that quality control can also be maintained, whether in new business development, financial management, or recording consultant time spent on individual projects.

BUDGET AND INVESTMENT

The other major pressure placed on CIOs is that of financial constraint. Capital investment needs to be justified at the highest levels. And although budgets are still increasing, the rate of growth is slowing down, according to both Forrester and Gartner. Simply keeping pace with demand, and managing what is already in place, absorbs a significant portion of available funds.

There is, therefore, no room for unnecessary spending or investments that will not deliver a positive return. Good IT governance solutions help CIOs manage resource allocation: whether it is staffing levels or the procurement of new hardware. An end-to-end governance tool will also identify where resources are underused and where they are hopelessly stretched. The CIO can then balance the two to ensure optimum utilisation.

In addition good IT governance will be able to channel demands made on the IT system through to the appropriate control centres. For example, a strategic demand for new business systems and applications will get directed through the organisation's portfolio or asset management process.

This makes sure that there is a strong business case for every proposed initiative, a disciplined approach to prioritise and fund projects and real-time visibility on all activities.

BEYOND MANAGEMENT

Without effective governance, IT remains a cost centre rather than a business enabler – and it is difficult, if not impossible, to prove return on investment or deliver accountability for IT spending. Indeed many companies that have deployed an IT governance solution to manage projects, programmes and support processes have found that unnecessary capital costs have been reduced. More than that, the number of non-viable IT projects that are undertaken has been diminished, project management costs have gone down, IT staffing costs have decreased and the use of existing resources increased.

Technology can make a major contribution to the bottom line, liberate the business to pursue new avenues, and manage exposure to a variety of risks. But for that to happen, IT needs to move beyond being simply managed. It needs to be governed. Only then will CIOs finally be able to fulfil their predicted function and advance business competitiveness.