CIO Leadership: Toward The Business Governance of IT

CIO Leadership: Toward The Business Governance of IT

Improving business-IT alignment and demonstrating the value of IT are top priorities for CIOs, with many of them chronically relegated to playing catch-up to the businesses expectations and struggling to justify IT costs.

Part of the problem is the lack of clarity about the ownership of the IT governance process. This sounds like it's the responsibility of IT. In too many cases, business executives make the mistake of delegating their responsibilities to IT, leaving it up to IT to determine which projects to work on and in what order. The lack of business leadership triggers a so called vicious circle of alignment leading to IT's gradual marginalisation, characterised by:

  • The business doesn't feel comfortable making IT decisions.
  • In the absence of a coherent picture of the existing and planned technology investments, many business executives delegate key technology decisions to IT.

  • IT makes decisions it shouldn't make.
  • Without a clear mandate and strategic directions, IT executives, often acting from inside technology silos, make decisions they shouldn't make, for example, which investments should be shared enterprise-wide, how good IT needs to be, or whom to blame when IT does not deliver.

  • IT doesn't deliver the expected business value.
  • IT services delivered from technology silos that act without a clear business mandate can rarely provide a coherent picture of the use of technology in the enterprise. And in the absence of such a picture, the business will not feel comfortable with IT.

    IT Governance begins and ends with business leadership

    The increasing pervasiveness of IT, whether processing transactions in the back office, enabling e-commerce or providing competitive differentiation, has made IT an integral part of the business. Firms thinking in these terms recast IT governance as the business governance of IT. They:

  • Put IT and its governance on the agenda of board of directors meetings.
  • Because of the important role that IT plays today as well as the potential risks ranging from data theft to huge project failures, IT governance becomes an integral part of enterprise governance. CIOs in these organisations look to the board to provide objectives for the enterprise's IT and regularly report to the board on the status of IT. The board expects that IT:

    1: will deliver the necessary solutions on time, on budget, and of sufficient quality;

    2: will exploit IT to deliver business value;

    3: will leverage IT to increase the overall efficiency and productivity of the firm.

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