information technology

IT Governance Day: Is IT governance just for geeks?

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Well if it’s Monday – and it isn’t (at least not in Australia) -  that means it is IT Governance day at the blog.  I could start with a fundamental overview of the world of IT Governance and set out an agenda of blog entries for the next few weeks – but I won’t.  That would probably be too ambitious – so I’ll start with a fundamental flaw in, apparently, just about everyone’s thinking.

Tying this post back to the subject line, not only is IT Governance not just for geeks, it isn’t for geeks.  IT Governance is ensuring that the entirety of the IT system works towards achieving business aims and strategy.  It relates to ensuring that the portfolio of IT people, processes, and technologies is in balance.  That role absolutely has nothing to do with IT speak.  And yet I have been approached by journalists and clients alike in the past with the absolute underlying assumption that IT is very technical and that it cannot be managed without an understanding of the technicalities below that threshold. That is absolutely not true and in fact the opposite is true – it is probably less-than-helpful at a Board and committee level  to have that technical understanding of IT.  You do not need to be an IT geek to be on the Board and governing IT operations.  All members of the Board are equally responsible for IT Governance, not just a board member with technical expertise. 

No-one expects a board member to understand how the engines in the fleet of delivery vehicles work – and, news flash, the modern vehicle is fairly complex!  Yet information technology instantly draws shudders of revulsion from some quarters and dark murmuring of witchcraft, magic smoke, and database normalisation (all of which are the blackest of black magic and therefore clearly evil and not to be understood by anyone).  The role of the board member in IT Governance is, in my view at least, to focus on the portfolio of activities, require monitoring and feedback regarding the performance of IT, and to provide direction in the allocation of resources.  Certainly this requires advice from IT professionals – particularly around the area of resource allocation – but good IT Governance does not require that the mechanic be at the board table just because he or she knows how to rebuild an engine.  .

I think the situation that we have has come about because in the past IT professionals have been guilty of portraying IT as some form of dark magic rite, as that was felt to give power and direction over IT.  There is certainly a danger for IT professionals in comjmunicating only half the story behind IT to the board.  I have met with more than a few IT professionals in the past who complain that their IT budget has been slashed because they opened up and tried to explain to the board what was needed.  In most casese, the board listened, heard mutterings of dark magic, and then found a language they could understand – the language of the bottom line.  Which, with great glee, the board slashed – with little regard for what that meant to business outcomes.  The danger here is that IT is seen as a cost rather than a benefit – and the lesson for IT in dealing with the board and those responsible for budget allocations is to focus on the benefits of IT rather than just the costs.

There is a great publication that I was involved with two years ago through CPA Australia called IT Governance:  A Practical Guide for Company Directors, and it is a very accessible and usable publication with great ideas for implementing IT Governance.  It can be purchased here and is something that any company should consider purchasing if they are serious about seeing value from IT. 

I will use this guide as a framework for my future posts around IT Governance.  I will make the note here and now that, as chair of the ITM CoE for CPA Austrralia, there is a publication focussed on the business management of information technology in the pipeline, and a publication of the IT Governance Guide aimed squarely at SME’s.  These will be interesting future publications – probably coming out in the second half of 2007 and first half of 2008 respectively.

Getting IT Right!

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This is an article that was written for the February issue of the Queensland Business Review.  It is partly promoting an upcoming ‘Getting IT Right!’ seminar to be held at BDO Kendalls on 21 February 2007.  More information is available on the BDO website www.bdo.com.au.

Introduction

Stories of failing information technology (IT) projects, IT teams that just ‘don’t understand’, lost spreadsheets that contain critical business data, and critical applications that seem to crash for no apparent reason are all too common scenarios. Information technology promises a great deal to all businesses, but often fails to live up to expectations.

These problems cause frustration for all concerned. Unfortunately ‘getting IT right’ cannot be achieved with a simple wave of a magic wand. The current skills shortage shows no signs of abating, and it is important for a business to use its staff effectively. Good business support from information technology is one of the keys to unlocking this effectiveness. Four essential business tactics exist that can assist:

  1. Understand the business strategy
  2. Have the right people
  3. Use standard processes
  4. Use the right technology

These tactics will have a positive impact on the success of your business in the context of the support received from information technology.

Understand the business strategy

An understanding of the business strategy, and the involvement of business in IT decisions, is necessary to avoid an IT team working on the unnecessary projects.

This common problem usually stems from a lack of understanding of the goals and vision of the business when it is tempting to implement technologies that seem to be the correct decisions at the time. Sometimes these decisions are right; frequently, they are not.

A business’s main strategy can be focussed upon product innovation, customer relationships, or operating excellence. Identifying the predominant strategy removes trivial distractions for the IT team. There is little point to significant investment in a customer relationship system where the main focus of the business is upon delivering the best products at the best price. Conversely, for a business focussed upon customer relationships, the priority will be to deliver and operate a customer relationship system.

The business strategy must be clearly communicated to the IT team. A written statement of the business IT strategy is useful (vision, mission, and objectives, together with supporting initiatives and milestones. Even more useful is a cultural emphasis on the importance of the role of IT in achieving the
business vision. Such a cultural emphasis can be achieved through concrete actions (e.g. declining projects that do not support the business strategy) and regular adherence to and acknowledgement of the IT strategic plan.

Aligning information technology to the business strategy will reduce distractions that arise through not having a clear direction of the role and purpose of IT in supporting business goals.

Have the right people

A common problem facing IT teams is that the staffing ratio is all wrong. The wrong staff are doing the wrong jobs for the wrong reasons. For example, a business that employs four network administrators and only one help desk person will likely have a network that works very well at a technical level. Unfortunately, there will be many frustrated end users not receiving the desktop support they require. The result can be business chaos.

IT roles that do not directly support the business strategy should be considered for removal or outsourcing. IT teams regularly have ‘legacy’ roles from the past that are no longer needed or appropriate. A regular review of the roles in the IT area and their alignment to business strategy is a potentially valuable approach.

In addition, end users need the training and skills to use the technology that is provided. Frequently no training is received by IT teams, or end users in the software on their computers, and – especially in the case of upgrades – continue to use the software as it has always been used, without using new features. Adopting a formalised and documented approach to training can be beneficial, but even recognition of the need for training through ad hoc opportunities will bring benefits to the business.

Use standard processes

Often IT teams have only one person who can resolve a problem. Or worse, each team member will resolve the problem in their own way. When the staff member leaves, no-one else can fix the piece of equipment. The end result is chaos and delays for the valuable staff member.

If the same task must be done more than once, the potential for developing a standard process exists. No IT team should be without good help desk software, and ensuring a discipline around managing problems and documenting resolutions will pay dividends. There are free help desk management tools available (e.g. open source solutions) and new social networking tools (e.g. ‘wikis’) for documenting and storing processes and procedures that are inexpensive, simple to use, and easily maintained.

Reviewing the use of help desk management software, and writing procedures for standard tasks (starting with the most common tasks) will repay the business handsomely.

Have the right technology

Technology that is simply wrong for the task at hand, or obsolete, costs businesses a great deal. Excel spreadsheets will frequently be used for tasks that really require a database. Or many technologies will be used where a single technology product would suffice. It is crucial that the right technologies are used for the task at hand. This does not mean that the ‘latest and greatest’ gadgets and gizmos should be adopted, but for a business that is reliant upon IT, it is necessary to have all technology covered by parts replacement warranties.

Technologies that are still supported by the original developers or manufacturers are fundamental to ensuring that the IT team is effective. Limiting the number of technologies to support will also help. Approaches to ensure that the right technologies are used include a statement of the preferred technologies to be used (e.g. identifying a single preferred database technology such as Oracle compared to SQL Server), maintaining warranties on all important business technology equipment, and limiting the use of customised and in-house developed software.

Conclusion

Effective information technology requires that the IT team be provided with the skills and equipment necessary to deliver upon the business strategy. Likewise, the business needs to provide strategic direction and input into decision-making for business information technology.

There are many more tactics that can be adopted by businesses to ensure that IT can deliver upon its promises. This article has highlighted those tactics that are common to most businesses and will have the most positive results. Nevertheless, there are many other tactics that can be adopted that are unique to individual businesses, and must be considered in light of the specific circumstances of the business.

Some interesting facts about the value of information systems management

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I have been revamping the content on the BDO website that relates to the area of information systems consulting, and one of the interesting things this has required was the development/research of “did you know” facts for the services we provide. They’re too good to lose so, in case they don’t make it through the content review process, I am blogging the research for posterity:

Information Management Strategy

  • One industry study estimated the total cost to the US economy of data quality problems at over US$600 billion per annum (Eckerson, 2002).

  • According to Continental Research’s findings, 60% of employees spend on average 15 minutes per day searching for information; 15% spend around 30 minutes; and 7% an hour or more.

IT strategy, planning and architecture

  • Organisations that always use an IT strategic plan to guide IT investment reported that they receive 45% more business value from information technology than those that never use an IT strategic plan (Department of Communications, Information Technology and the Arts 2005)

  • That an IT strategy process must identify how information technology will support and enable the business to achieve its goals, and link to the business strategy in doing so.

IT governance, reporting and policy

  • In the United States poor IT Governance is a breach of Directors’ Duties and will result in a qualified audit report on the business, as it is the responsibility of the directors to ensure that an effective business reporting system exists

  • Companies subject to the ASX Principles of Corporate Governance should consider IT Governance issues in structuring the board and in recognising and managing risk from the business

Technology evaluation and procurement services

  • You should never select software on the basis of what it does and how it does it – rather, consider what you need to do and whether the software vendor will support you for the life of the software.

  • Selecting software on the basis of a product demonstration is not the recommended first step in selecting software.

Program and project management

  • The Standish Group shows that only 16% of software projects are completed on time and on budget. 31% of projects are cancelled before completion, and 53% of projects cost 189% of their original estimate (Standish Group)

  • That being ICT-aware, open to organisational transformation, and persistent in realising ICT benefits are the three leading factors in realising value from a business’ ICT investment

ICT business case & feasibility studies

  • Many businesses select new software based on “golf course” decision-making, and rely on fads, trends, and hearsay in selecting software, and then modify the business case to fit (CPA Australia IT Governance Guide 2005).

  • The business case should include the cost of decommissioning the technology and disposing of it at the end of its useful life.

Web services

  • For an inhouse software development project, maintenance costs of the software are about 55% of the cost to build the software in the first place

  • Sixty five percent of Australian organisations have admitted to losing revenue due to poor data quality, as a result of not having the time or resources to address this problem, according to the results of an international research study by QAS (2005)

Implementing your online collaboration strategy

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My speaker’s notes (not that they bear much resemblance to what was actually said) are to be found here as a downloadable pdf:  Implementing an online collaboration stategy.  This presentation was given at the Blogs, Wikis, and RSS conference in Sydney on August 29th 2006.

Implementing your online collaboration strategy

We work in a Web World for business outcomes

Introduction

Good morning, ladies and gentlemen.  My name is Micheal Axelsen, and this presentation focuses on providing a practical guide to the implementation of your online collaboration strategy, with some useful tips and thoughts on how to proceed with the implementation of collaboration technologies, including blogs and wikis, into the business.

This presentation is focussed upon:

  1. Business
  2. Collaboration technologies
  3. How to succeed with their implementation

At all times, though, this is intended to be a practical look at the application of these technologies, and addressing the practical concerns of business.

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Planning paramount for high growth companies

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Recently, BDO Kendalls published its quarterly business briefing.  An article I co-wrote (with Sharyn Richardson, an Associate at BDO Kendalls in Brisbane) discussed the issues of business growth and its impact on planning for capability within the business.

The article is reproduced in full below.

 

 

While the importance of planning is generally impressed upon companies that want to grow, companies growing exponentially in the current boom economy cannot undervalue the planning process to ensure their growth remains sustainable.  

Growth is generally seen as a positive for any business, but the consequences on businesses processes, systems and infrastructure is often overlooked, leaving many business owners struggling to keep up. Simply, quick growth may mean that some areas of your business will not work as well as they used to or they may not work at all.

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