Business and IT need to share common ground to achieve growth, Deloitte survey revealsDOWNLOAD
24 February 2011: The current economic environment creates an opportunity for IT managers, communities and universities to better manage the value of IT in organisations, according to a report by professional services firm, Deloitte.
The ‘2011 Survey on IT-Business Balance: Finding common ground’ explores some of the key themes that are vital for setting the direction in IT and business alignment, and includes responses from Australian participants.
Kurt Proctor-Parker, Deloitte Consulting Partner in Australia, said the 2011 survey results clearly indicate that with the GFC behind us, IT and business alignment is progressively improving towards fully supporting corporate performance.
“Survey respondents indicated that the greater the role of IT in the definition of the business strategy and the more IT and business strategies are aligned, the better an organisation will perform compared to its competitors,” Mr Proctor-Parker said.
The questions asked of 800 CIOs from 37 countries, including Australia, related to IT management, evolutions and trends, outsourcing and security, policy and fraud challenges. The following are the key themes and results of the survey:
Bonding at the top
The closer to the top CIOs are, the better. Personality matters too, along with business knowledge and internal and external relationships. The presence of IT experience at management level is another key alignment factor. The high-level dialogue needs to trickle down through the entire IT organisation and create links at all levels.
Mr Proctor-Parker said just over a third (37.5%) of Australian CIOs indicated their business had a flat governance with the CIO being seen as a peer or reporting to the CFO, a similar percentage noted in the global figure.
“Just under half (48%) of the Australian CIOs either did not have a strong opinion regarding the shared vision of IT and the business while a slightly lower percentage (43%) agreed that there was a shared vision. This also aligned with the global results,” said Mr Proctor-Parker.
“Australian CIOs however held a stronger view about how IT contributing to the business strategy is linked to better corporate performance with over half (54%) believing this is true “to some extent” compared to 39% recorded for the global response.”
Looking for benefits
CIOs can help shape the business. For example, business cases are open windows to challenge business models. CIOs can show how IT investments create value, but they should also help in tracking the benefits. IT can assist the business in being selective: structured, value-based portfolio management yields more benefits.
Mr Proctor-Parker said that just over half (54%) of the Australian CIO participants believe IT plays a role in the definition of business strategy “to some extent”, compared to the global response of 39%.
He also pointed out that just over half (55%) of Australian CIOs state that the benefits of technology projects are rarely measured, only by exemption and on limited elements in an ad hoc way after a project is completed. The global figure was 38%.
“Half of the Australian CIOs indicated that projects are always selected through a formalised process, continuously managed through a portfolio management approach,” Mr Proctor Parker added.
CIOs must get their shops in order by professionalising IT, delivering the goods to the business and demonstrating achievements. They need to open the doors of the IT area to business, should measure performance in business terms, and use these indicators to engage with the business.
“Half the Australian CIOs largely agreed that the organisations they worked for fostered a clear business ownership for IT projects. Almost two-thirds (64%) indicated that the business key users participated in the design and development of new IT systems. Over half (57%) charged IT investments to the business through projects, while IT costs are covered by an annual budget,” Mr Proctor-Parker said.
CIOs should structure IT demand management to help the business manage its demand, while IT focuses on the supply side. Connecting IT with business must be taken seriously: fostering a dedicated ‘relationship function’ with appropriate means will help. CIOs should tap into the IT potential of business resources. For the business, it is an opportunity to gain control, build technology skills and share insights.
Approximately two-thirds (64%) of Australian CIOs identified that the business key users participate in the design and development of the IT systems, compared to 55% in the overall global response.
Managing security and privacy
Growing cyber security awareness is moving the Chief information Security Officer (CISO) away from the IT department. This displacement allows the business to feel more involved in security and privacy matters. Organisations without security information functions rarely implement privacy functions. Neither IT nor business is aware of the number and severity of actual incidents, making it hard to justify investments in security and privacy management.
The need for more information security and privacy effort and resource within the organisation was consistent between Australia (71%) and globally (69%). In particular, information security was most in need.
Reaching out to sourcing partners
IT outsourcing reflects a search for talent. IT and business should discuss Service Level Agreements (SLAs) together in order to align them with business requirements. This will result in more satisfying outsourcing deals.
“The experience for just under half of the Australian CIOs (43%) was that the external SLAs are negotiated by IT and communicated to the business. Half of the Australian CIOs advised they were generally satisfied with the primary outsourcing agreement, a result which was also reflected in the global figure,” Mr Proctor-Parker said.