How CIO’s intend to solve their IT Governance issues

How CIO’s intend to solve their IT Governance issues.

While most organisations worldwide 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 that has also been rolled-out in Belgium. 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.

Angeli Hoekstra, partner of PricewaterhouseCoopers and globally responsible for IT Governance Services, declares “The survey shows that IT alignment is the highest rated driver and desired outcome of IT governance practices. 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 focussing 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.

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..

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.

Dirk Steuperaert, Director IT Effectiveness at PricewaterhouseCoopers Belgium who was involved in this study, explains; “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.
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.”

Belgian Results

In general, the overall results are also valid for Belgium, i.e. an increasing but not yet optimum level of maturity, with a strong focus on operational IT issues rather than looking at decisions on organisations, value management and benefits monitoring.

Dirk Steuperaert comments; “In Belgium the major organisations we have interviewed use sound and pragmatic, yet somewhat incomplete, IT Governance practices. We also notice that resources allocated to the definition and maintenance of IT Governance principles are also often immerged in the day-to-day operations, leading to slower progress in implementation. Last, we noted that Governance principles are critical when companies are confronted with changes such as mergers or Acquisitions. We encourage Belgian organisations to take a look at the very successful examples within Belgium and abroad in order to improve their IT Governance practices”.


Notes to Editor:

The study
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.

Some 50 CIOs from range of sectors, such as financial services, manufacturing, IT, telecommunications, and Government, were interviewed internationally.

IT Governance Institute
The IT Governance Institute (ITGI) ( www.itgi.org ) was established in 1998 to advance international thinking and standards in directing and controlling an enterprise’s information technology. Effective IT governance helps ensure that IT supports business goals, optimises business investment in IT, and appropriately manages IT-related risks and opportunities. The IT Governance Institute offers original research, electronic resources and case studies to assist enterprise leaders and boards of directors in their IT governance responsibilities.

PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 140,000 people in 149 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice.

"PricewaterhouseCoopers" refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.