As regular readers of my blog will know, I’ve been talking about moving beyond alignment for a number of years now. The fact is, too many CIOs have been able to get by on the basis of managing the technology black box — and CEOs and CFOs have been complicit in allowing these same CIOs the freedom to do what they want within tightly controlled budgets, not wanting to sully their hands with “all that technology stuff.” But those days are rapidly coming to an end. The technology genie is out of the bottle; today’s business-unit leaders are more dependent on technology than ever before, and they are also much more tech-savvy. CIOs can no longer hide behind the technology black box — it’s time to change the IT game forever. It’s time for IT to drive business results and connect all technology investments to business outcomes.
Today’s new CEOs are looking to CIOs and IT to make a direct impact on business goals from investments in technology. While every business must make technology investments to sustain operations, IT must move beyond simply keeping the lights on and connect the dots between effective growth strategies and new technology investments. This requires a different set of technology and business skills: different people, process, and technology in the IT organization. In fact, the organization is so different we now call it the business technology organization, or BT. The distinction between IT and BT is subtle but important. BT represents the fusion of the IT organization into the rest of the business. In a BT organization, the lines between IT and business units are blurred. What is important is a focus on the roles needed for effective business technology strategy execution. What’s not important are reporting lines.
This is the conclusion of a recent research project on the future of IT governance. I am writing this summary of facts and findings hoping to get your feedback.
Here is what we did in the project: We started from the recently released COBIT 5 framework to set a baseline for what good IT governance is. We then assessed 15 case studies and selected nine that displayed characteristics of good IT governance. We also interviewed 25 technology management experts, asking them "whether and how IT governance will need to change when organizations adopt smart technologies such as a mobile, social, analytics business process management (BPM), and cloud."
What is the conclusion? The more your organization invests in smart technologies for business innovation, differentiation, and productivity improvements, the more you will need good IT governance for managing these investments. And because developing good IT governance is a learning experience filled with trial and error, the earlier you start applying good IT governance as a continuous improvement process, the faster you will benefit from it and your investments.
But what does this mean in practical terms? We identified five directions for change. They nicely fit with the COBIT principles:
1) Make technology development an integral part of business strategy.
2) Focus on cross-functional business alignment.
3) Engage employees at all levels of the organization.
4) Maintain an integrated IT governance framework and single ownership.
5) Develop separate responsibilities for IT governance and IT management.