IT Governance

Some interesting facts about the value of information systems management

by

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)

Professor Wim Van Grembergen and IT Governance

by

The professor spoke today at the Gardens Theatre at Queensland University of Technology (great facility by the way) on the topic of IT governance. He focussed on the actual mechanisms for ensuring that IT and business are in alignment.

He focusses on structures, processes, and relational mechanisms.

He noted that relational mechanisms are often missed by consultants putting in a new IT Governance framework.

Structures and processes are fairly straightforward, but relational mechanisms are a little different. Relational mechanisms are mechanisms that ensure that the relationships that underpin the other two tools are effective. Examples include co-location of business and IT, aligned incentive programs, cross-functional business/IT training and job rotation.

The presentation was very interesting, and linked nicely to COBIT. He also noted balanced scorecard to measure corporate contribution, user orientation, operational excellence, and future orientation. A nice rule of thumb for operational measurement presented is that 33% of time should be spent on maintaining existing systems, 33% should be spent on enhancing existing systems, and 33% should be spent on building new systems.

Sherrena Buckby also presented on IT Governance. Sherrena is a PhD candidate at QUT and is writing her thesis on IT Governance. The topic of her presentation is ‘Why IT Governance is important for boards?’. Sherrena is doing significant research on IT governance on what are the tools that the board could use to cover off on iT Governance issues. Her presentaion was very interesting and holds some promise for a practical tool that may assist boards in addressing IT Governance.

A very worthwhile session today.

Information is Systems, Information is Technology, Information is Business

by

On Wednesday I had the privilege of co-chairing (with Maria Tyler) the IT Conference Day for CPA Australia. This is an annual event for CPA Australia, and I did it last year as well. This year the theme was very much around a maturation of business directing what it wants from ICT, rather than ICT being told to ‘just do it’.

As business matures, it can then start to understand what it needs, and source the inputs that it requires. And that is reflected in such things as IT Governance and project direction.

All speeches on the day were good, with topics relating to project management, IT Governance, demographical change’s impact on the workforce, and practical use of digital dashboards.

The photo below shows one of the breakout sessions:

IT Conference Breakout Session

Hopefully I’ll get a chance to attend next year too.

Information Technology Conference 2006

by

I am today co-chairing the annual CPA Australia Information Technology Conference 2006 at the Stamford Plaza.  This is the first of the conferences – the schedule is repeated in Melbourne on 19 July and Sydney on 25 July. 

The sessions are focussed on the business impact of information systems – as it should be – and the following key benefits are noted:

By attending this high profile industry event you will
learn key strategies to achieve increased value from
your IT decisions and gain insights into:

  • The changing environment of IT
  • Avoiding project failure
  • Measuring and tracking KPIs
  • Building your business on effective IT governance
  • Linking IT spend to the business strategy
  • Integrating financial systems with your business

All of which are themes that should resonate, and I’ll be interested in these topics from several perspectives – but not least of all because I am speaking on most of these topics myself at a later date!

ISACA

by

Although it stands for Information Systems Audit and Control Association, ISACA has grownwell  beyond that compliance-based beginning into a real professional association for information systems people, and in particular has a lot of relevance for business systems people.

I joined in about March and I haven’t regretted the subscription yet.  In particular it has a great deal of resources about best practice and IT governance that is very relevant to me as an information systems professional.

Their website is www.isaca.org, and I’m proud to be a card-carrying member.  Brisbane chapter is here.  Doesn’t mean I’ll ever stop being a CPA – I note this latest accountant tom-foolery to put some crazy sounds on your mobile – but ISACA is a professional association focussed on business outcomes.