On February 9th, the Australian Institute of Company Directors combined with The Churchill Club to present a discussion forum entitled “How to build a killer board”. The discussion was moderated by Stephen Mayne, famous for founding Crikey.com.au, and infamous as Australia’s most unsuccessful board candidate. Forum members were Dr Katherine Woodthorpe, Mr Mark Lelliot, Mr Bill Lang and Dr Terry Cutler.
During their discussions, and responding to numerous questions from the floor, the panel lamented the continuing tendency of boards to not include technology in their skills mix. It was said that only 6% of organisations globally have a director with experience in technology matters. This contrasts with the startling statistic that 50% of capital expenditure globally is on technology, and that the proportion is rising at about 3% per year.
How can organisations, their boards, regulators and investors continue to ignore the appalling failure rates in IT initiatives, and the impact of operational IT failures on organisations? Research reports produced by numerous credible organisations show quite clearly that there are fundamental flaws in the approach to governing the use of ICT, and that these lead to billions of dollars of shareholder and public funds being wasted every year.
But governing IT is not rocket-science, and it is not beyond the capability of the average competent company director or senior executive. The Australian Standard for Corporate Governance of ICT (AS8015) gives clear guidance, at a level appropriate to directors. During 2006, we expect that a companion standard, AS8016: Corporate Governance of ICT Projects will become a reality. Also during 2006, we anticipate handbooks to be delivered that will provide further insight regarding AS8015 and AS8016.
But there is no need for organisations to wait for all these to be delivered. Infonomics suggests, strongly, that the time for organisations to start asking questions is right now – and for that reason we’ve included in this IT Governance Letter a 30 point checklist of questions you should ask about your organisation’s IT.
If you’re like most organisations, the honest answers to these questions should make you feel uncomfortable. You might try to give yourself extra credit, but it wont work – because the latitude you gave yourself will mean that, somewhere, you have a risk that things may go out of control. In this questionnaire, you need to score at least 120 out of a possible 180 points – otherwise your governance control of ICT is barely adequate. You should not be patting yourself on the back until you can legitimately say that you score 150. And having scored yourself, why not test some of your colleagues, and see whether you all have the same view. The results may be quite surprising.
Those of you who have seen previous editions will be familiar with our surveys taken at briefing events. Now we want to go the next step – after you’ve completed your questionnaire, please send it to us and we will model up the results for a report in next month’s IT Governance Letter. Can you imagine what that story will look like?
And in the meantime, if you found that your answers to the questions were not absolutely comforting, why not consider having Infonomics help you identify where, when and how to improve your IT Governance? Take a look at the people we can deploy to help your organisation become highly effective in its governance of ICT, and through that ensure that its use of ICT is effective, efficient and acceptable?
Mark Toomey
11 February 2006
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