While there are already proven approaches available to address the challenge of realizing business value from IT investments, adoption of these approaches continues to be limited. IT governance is increasingly seen as a panacea, but this is today a false hope. The focus of IT governance continues to be on the more operational IT issues with little appetite for tackling the business aspects of planning and managing how the business uses IT to create and sustain value. Research undertaken by Cranfield University’s School of Management over the last ten years has indicated that very few organisations have a structured approach to realising benefits from their investments in IT and so many boards are left uncertain of the value IT is adding to their enterprises. In a 2006 study , they found that less than 30 percent of the largest UK companies actually have a formal benefits management process. Anecdotal evidence suggests that similar figures are to be found among European and US companies as well. My own experience would certainly support this and suggest that this would also be the case on a global basis. The reality is that accountability for business value does not lie with the IT function, but with the business, including the board and executive management. Yet, while much is said on this topic, there is limited or no understanding of the problem, and even less appetite to do anything about it. As Geoff Codd suggests in The Drowning Director, the way forward includes “The introduction of an IT management and governance framework that explicitly stimulates and facilitates collaboration and knowledge exchange across the business/IT divide from the Board downwards.”
So, why aren’t we moving forward, or if we are doing so, why are we doing so at a “snails pace”? Whilst governance is not seen as an exciting topic (I was once asked to talk about it but call it something else!) – it is not easy to change governance in an organisation. Governance is about what decisions need to be made, who gets to make them, how they are made and the supporting processes, structures, information and tools – governance is essentially about the power structure of an organisation. As such, improving governance in an enterprise is usually itself a major change program – one that will take time to plan and implement, and even longer in many cases for the benefits to be achieved. This does not play well in today’s environment of short term thinking, driven by “analyst” expectations in the public sector and by political realities in both the private and public sectors. Often, the benefits will not be realized, or generally visible, during the average tenure of the responsible/accountable executive which raises the question “What’s in it for me?”. Such a program can certainly be seen as “all pain and no gain!”
A further complication is that implementing changes to governance is not simply a case of the board and executives directing others in the enterprise to change – it certainly involves doing so but is also about the board and executives themselves changing how they think and act. Many executives have got where they are by understanding and working within the current governance system – they know how to “play the game” and often, as a result, have a strong vested interest in the status quo.
If we are indeed to move beyond words, we must place an emphasis on action—on engagement and involvement at every level of the enterprise. In their book, The Knowing-Doing Gap, Jeffrey Pfeffer and Robert I. Sutton argue that “knowledge is much more likely to be acquired from ‘learning by doing’ than from ‘learning by reading’ or ‘learning by listening’. This strongly suggests that an iterative step journey toward value management will yield, for each individual, a discrete set of opportunities for learning that, taken together across an organisation of people, form the stepping stones toward cultural transformation and the achievement of real and sustainable change”.
As Sun Tzu says in The Art of War, “Every journey starts with the first step.” I urge you to move beyond words and take that first step – I can’t promise that the journey will be easy, but without it, value from IT investments will remain elusive, and we will all be the losers.