Study points to "IT governance" best practice
Staff -- Manufacturing Business Technology, 10/1/2003 6:00:00 AM
According to a recent study, a majority of market-leader manufacturers have adopted a collaborative approach to IT governance. The IT Effectiveness Survey, conducted by consulting firm PRTM and research firm InterUnityGroup, found that individual business units worked with the IT departments to strictly control project selection at 83 percent of companies considered market leaders based on profitability, revenue growth, and other factors.
"At most companies, there is an ongoing battle between the business units and the IT department over which projects will get funded," says PRTM Director Jeff Kaplan. "But at market-leader companies, IT and business units sit down together and work out what the budget should be and what projects should be undertaken."
At nonmarket-leader companies, the business units have mostly abdicated their decision-making rights to the IT department, which tends to set the budget and conduct project selection in more of a vacuum. This tends to result in a lot of tactical projects that improve efficiency, but don't usually have a meaningful impact on strategic corporate goals, according to PRTM.
"You really need to sit in the middle with business setting the requirements and IT coming up with the solutions," says Kaplan.
Kaplan adds that the degree of cooperation should go beyond the head of IT sending out a memo to the line managers asking for opinions on which projects to undertake. "We counsel our clients to pursue some kind of joint governance team made up of senior business and IT managers," he says. "These teams can decide what projects to do based on their impact on the company's strategic goals."
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