The contemporary business environment is totally reliant on its IT systems. Technological developments have not only made many forms of business activity more effective and efficient, they have created new forms of business. This applies to rational as well as ‘new' markets. The birth and growth of the information economy has radically changed the way we run our lives. No sector has benefited from technology as much as the financial sector. Financial services are now inconceivable without the pervasive support of IT and communications. Local and global activities in near real-time, essential for oiling the wheels of all business activity, rely completely on the success of IT systems.
It is no surprise, then, to find that the link between business interest and IT development is strong. This link is key to shaping the vital interface between business aspiration and IT reality, it defines the scope and central place of the concept of IT governance. Historically there has been a gap, or time lag between the breathless opportunities pushed by rapid technological development and the slower, earthbound needs of business in general. This has led to a difference in culture, where IT systems have been grudgingly admitted as being necessary, but seen as a cost to the business, a cost which is detrimental and which should be reduced. Meanwhile the IT culture, carried by the wave of falling procurement costs, more realisable solutions and a growing complexity in business life and supply chains has pushed hard for budget. The lack of synergy between the IT and business functions has led to ‘siloed' solutions, closed areas of discussion and inefficiencies in the way systems have been deployed.
IT governance is, in part, a response to this cultural divide. It recognises the central importance of IT and insists that it is driven by business and for business interests. It places responsibility for the critical infrastructure of an organisation where it belongs - at board level. Governance bodies talk of IT as ‘essential to manage transactions, information and knowledge necessary to initiate and sustain economic and social activities. IT is fundamental to support, sustain and grow the business.'
No-one would argue with this now. What were once competitive benefits have translated into essential requirements for survival. As a consequence, the most successful organisations are those that have moved on to consolidating these benefits and preserving them while minimising any disadvantages. This is also part of the IT governance remit. Understanding and dealing with the risks stemming from implementing new technologies is a strong indicator of organisational maturity. IT governance widens this to include other challenges.
It recognises the convergence of IT and business management.
It points up ways of aligning IT strategies with business strategies.
It indicates levels of responsibility throughout the organisation.
It responds to the complexity of organisations by insisting on a systematic approach and looks to framework solutions rather than piecemeal fixes.
Because business is accountable and success is represented in figures and other measurable parameters, it recommends that IT performance is also subject to measurement. Ultimately, this bringing together of operational and technical interests for the good of the business is the responsibility of those who hold the future of the organisation in their hands.
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Note: This article was sent to us by: Jennifer Hawley at 01162010
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