How to Make the Case for Board Oversight
If your company's board does not currently attend to IT in a formal fashion and you think it should, DTE's Ellyn suggests you should state your case to your CEO. For example, Ellyn advises CIOs to talk up the benchmarking opportunities that often come from having a relationship with a board member who can tell you about his own organization and introduce you to people inside his company to share best practices.
Recently, Ellyn and some of her colleagues at DTE spent an entire day at a company where one of DTE's board members works. The purpose of the visit was for DTE executives to learn this company's process for implementing a consolidated financial system so that they could better manage a similar project, called DTE2, in their own company. "We really got an in-depth look at how they did what they did," says Ellyn. "It helped us understand what it took for them to be successful. We learned some of the rough areas that they had experienced and what they might have done differently, and we've incorporated those lessons learned into our own thinking about this project."
Ellyn also advises CIOs to emphasize the ways in which access to board members will help them think through their IT strategies for project deployments. She says advice she's received from her board about vendor partnerships and business buy-in has helped her keep financial consolidation on track. Specifically, her board recommended that DTE Energy maintain control of the project and not outsource it to an IT services firm to foster a sense of commitment to the project within the enterprise. Board oversight also helped Ellyn recruit a key business sponsor - the senior vice president of operations - to the executive team leading the project. "The members of the board knew that that was key to success," she says.
Another way to convince your CEO of the importance of establishing an oversight committee is to discuss the size of your company's IT spending budget and how those dollars directly support the business strategy and direction. Also, make sure your CEO understands the extent to which your company relies on technology both in day-to-day operations and as a competitive advantage, and how the board really needs to pay attention to IT in the context of corporate governance given the challenges associated with major IT projects and security risks (see "The Business Case").
Deloitte Consulting's Senn remembers a CIO at a manufacturing company who had embarked on a campaign to educate his board on the importance of IT. This CIO complained to Senn that the board paid more attention to his company's investment in its new corporate office than it did to IT - even though IT spending at his company had topped $US1 billion and the new office building cost a fraction of that. Over the course of several board meetings, the CIO had made an extra effort to explain where IT was spending its money, what it was spending on, why it was spending that money and the value the business was getting from it. As a result, his board is now paying more attention to IT as a way to add genuine value to the business and no longer views it simply as a cost centre.
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