You're Talking, Not Walking
from March/April 2007
The Big Conundrum
The huge majority of the more than 400 directors surveyed recognize that IT is either very important or important to success in various areas of the company's business. For example,
69% say implementing the right IT strategy is "very important" in compliance,
66% in learning about and retaining customers,
57% in managing risk, and
50% in competitive positioning.
So how come only
14% say they are "completely and actively involved" in IT strategy?
Source:
Corporate Board Member
/Deloitte Consulting
Directors aren't pushing to get Information Technology onto board-meeting agendas either.
66% say IT should be discussed at the board level...
...yet just 11% have that discussion at every meeting.
49% of the respondents discuss I "as needed"
41% wait for a formal presentation, and
10% say it's something they leave to a committee.
Source:
Corporate Board Member
/Deloitte Consulting
Who Leads the Discussion When IT Does Come Up Before a Board?
The CEO 44%
The CIO 34%
The CFO 29%
The CTO 20%
The definitions vary, but usually the chief information officer is responsible for IT throughout a company, handling internal systems, for example, while the chief technology officer reaches outside the company, to customers and suppliers, among others. Respondents could pick more than one answer to this question.
Source:
Corporate Board Member
/Deloitte Consulting
How Well Briefed are Directors About IT?
43% say they get enough IT-strategy information to prepare for a board meeting,
25% say the information is good but they don't get enough of it,
18% say the information is plentiful but not always useful, and
14% find the information insufficient in either quantity or utility.
Source:
Corporate Board Member
/Deloitte Consulting
What IT Costs
How well does your company monitor and measure the value of IT?
Very well 13%
Room for improvement 43%
Source:
Corporate Board Member
/Deloitte Consulting
Are the measures of IT value discussed at board meetings?
No 55%
Source:
Corporate Board Member
/Deloitte Consulting
Which of the following best describes the justification presented to the board for a major IT investment?
Appropriate throughout 56%
Appropriate at the beginning, but we don't get updates 29%
We don't get appropriate justification at the beginning or updates during the project 15%
Source:
Corporate Board Member
/Deloitte Consulting
Bummer
Even though 22% of the respondents blame various aspects of IT strategy for a significant failure to achieve particular goals, 52% say their board will be spending no more time on IT over the next three years than it does now.
What were those shortcomings, by the way? The respondents pin them on more than one cause, including:
The IT strategy itself 28%
Lack of alignment between the strategy and the business 44%
Missed deadlines in putting the strategy into effect 43%
Source:
Corporate Board Member
/Deloitte Consulting
Eureka department
Cross-tabulated responses to other questions in the survey disclose that:
Companies that haven't experienced a failure attributable to their IT strategy perform better financially than those that have.
Companies whose boards monitor IT strategy perform better financially than those whose boards don't.
Source:
Corporate Board Member
/Deloitte Consulting
Reading Between the Lines
On the face of it, the extent to which so many directors seem disengaged from their company's information-technology strategy is alarming. Are they negligent? Scared? Or lazy? It surely isn't ignorance. As the findings on these pages make clear, most of the 455 respondents to the
Corporate Board Member
/Deloitte Consulting survey acknowledge that IT is a key to their company's success. (The complete survey results are available at
boardmember.com/PDFs/ITStrategies.pdf
.)
Kenneth Porrello, Deloitte Consulting's senior strategy principal, interviewed 35 directors and senior executives and found evidence of this gap. But Porrello also discovered a number of individuals and organizations that are leading the way to a more integrated view of technology and business - something he calls "a collective awakening among directors that information technology is critical to their companies."
Why don't more directors play a stronger role in determining IT strategy? Why don't they insist that IT be discussed more often in boardrooms and measure what are usually gigantic investments against results more often and more thoroughly? A common obstacle to doing all this, Porrello found, was that old nemesis, time. Directors and CEOs he interviewed said they just didn't have enough of it to go around - and that keeping pace with, and on top of, all the governance reforms of the past five years has made time management that much more challenging.
IT neglect, in this respect, is another victim of Sarbanes-Oxley. But that's an excuse that has run its course.
