5. Decide Which Projects to Invest In
"That gets to a very important and key component that often is not very well evolved in most organisations, which is: How do you determine which projects to invest in?" Gardner says. "How do you determine which businesses get what levels of capital spend?"
In most cases those decisions have been made on a demand basis: whoever puts up their hand and demands capital investment gets consideration. Now a lot of companies are moving towards a more supply-driven approach, where a strategic decision is first made about how much the company will spend on technology, before businesses put their case for a share of that investment, based on where they fit in the portfolio and the benefits they expect to get from that spend. In some cases, there are advantages in forcing businesses to "bid" against each other for that capital allocation.
That is an approach that Gardner says he has seen work very effectively in some organisations. "And in a lot of cases what we see here, particularly when you have a problem or when you have excesses, a lot of companies centrally will say: 'Okay, we are now going to drop 65 per cent of all projects and we're going to go to a much more supply-driven approach about how we allocate out capital for investment.'"
6. Nominate a Clear Business Champion
Numerous IT projects fail because they don't have a clear business champion and business owner, but Gardner says the real issue is accountability. Sometimes halfway through the project the original champion moves on, a replacement is appointed and then both get involved in pointing the finger of blame at the other when things go wrong.
"So the accountability process is a very important part of this, part of the performance management process around IT," he says. "You've got to make sure that you can identify where responsibility should lie, so that you can hold business, in addition to technology, accountable for projects; that's part of the governance.
"And you then need to link that to reward systems as well: 'Not only are we going to ensure that your business delivers, we're going to insure that your large projects deliver as well.'"
7. Assess the IT-Business Relationship Management Process
Another important aspect of transparency involves the IT-business relationship management process, and relates to the organisation itself and the type of group IT is within the company.
IT departments these days normally charge business units according to time spent by programmers or the workload of the data centre (see "Chargeback for Good or Evil", April CIO). Now BearingPoint is encouraging clients to transition from that stance to a position where IT becomes a product and services organisation.
"If you think about it, the IT organisation is basically delivering on capabilities and on projects and products and services," Gardner says. "So rather than charging out on time, what they do is they agree on a requirement: a capability or an IT asset that needs to be developed and built, and they charge the business then for the development of that IT asset. And so the business now contracts them essentially to develop a capability or an IT product or service for them, and then they pay them for that result rather than the input, so it's much more of an output-driven model."
Gardner says numbers of financial services companies in Australia are looking to achieve better transparency and accountability, by profiling where they are in terms of their spend and their IT-management capabilities, and in some cases his organisation is helping them to evolve to a new model.
"It's a whole area that has received a lot more visibility at the CFO-level and also at the board level," he says.
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