Stock market analysts take an interest in IT spending
IT departments seeking influence and support at board level now
have a new group of allies in stock market analysts, who are
increasingly interested in companies' IT spending.
About 55% of analysts want IT people to be involved in company
briefings, according to UK research by Hewlett-Packard, which was
presented at a recent conference of the BCS Project Management
Specialist Group and the Programme Management Special Interest
Group.
In addition, 54% of analysts said they would support IT spending if
it were designed to improve efficiency, even if shareholders wanted
cost savings.
More than 46% said companies should be obliged to give more
information on IT spending and system performance, although they
are against any formal regulation.
All the analysts agreed that IT has a role in enhancing shareholder
value and company performance, with 69% agreeing strongly.
IT certainly needs such support, Hugh Barton, a director of
Hewlett-Packard's services arm, told the BCS conference. "Top
executives now understand the value of IT, but things have worked
against us recently," he said.
"A lot of senior executives feel betrayed by the y2K issue,
enterprise resource planning, the dotcom boom and bust and now
customer relationship management. These have all undermined trust,
confidence and the relationship with the business.
"A disturbing result is that many IT directors are reporting to the
finance director. This raises concerns about IT being viewed as a
cost centre, judged by what it takes out of the business, not by
the value it provides."
IT was being "pushed down the pecking order," said Barton.
Increasing demands from users and budget constraints meant that
"performance had to be coaxed from complex, inadequate legacy
systems, creating an inflexible operating environment".
He said the City's view of the importance of IT to share value
meant IT needed more stringent governance.
"Shareholder value is very different to what we usually talk about
in IT project delivery," he said. "Investors now become part of the
constituent group, as well as the employees, and they need to know
what is driving IT investments and that sound business judgements
are being made."
This should not mean obsession with the lowest cost, Barton said.
"IT governance should never risk undermining entrepreneurialism,
creativity or judicious risk taking. If you risk nothing you get
nothing in return."
IT governance should mean building or rebuilding trust and
relationships with the business and ensuring IT provides business
value.
This would allow IT to move from "the blue collar with the oily rag
making the infrastructure work" to being involved in discussions
about developing the infrastructure.
Barton reported there was "a huge amount of interest in IT
governance, but in pockets. There is a need to create a critical
mass".
He said the City's growing interest in IT spending and impact, as
shown in Hewlett-Packard's research, would get business executives
involved.
"If applied appropriately, IT governance gets IT back at the top
table," Barton said.
Inside the BCS
The BCS Information Systems Examinations Board has launched a
combined certificate module in its Business Systems Development
diplomas scheme in change management, configuration management and
release management.
The new certificate is the 22nd module and is available to those
taking the diplomas in systems analysis and design, the SSADM4+
development method or rapid application development. The 18-hour
course ends with a one-hour exam with a multiple-choice section and
a case study.
The Business Systems Development diploma scheme also offers
diplomas in business analysis and data management with five
certificate modules - each a valuable qualification.
www.bcs.org/iseb