IT Boardroom Membership Grounds to a Halt

Clarion Consulting survey reveals:

  • Just one third of organisations with IT boardroom membership, unchanged from 2009
  • Increasing perception of IT as a utility and not a strategic engine of business change
  • Only 5 percent of organisations measure IT return on investment and 3 percent measure IT innovation
  • More than half of all organisations have cut IT budgets in the past year

Dublin, Ireland, Friday, 3rd June 2011: Leading project management and IT consulting specialist, Clarion Consulting today released the results of its survey into the Evolving Role of the IT Function.  Now in its third iteration since 2007, the survey reveals that IT boardroom membership has firmly ground to a halt with one third of organisations confirming an IT presence at the highest levels of management, unchanged from 2009.

An increasing perception of IT as a utility service has also come to the fore with 44 percent of respondents believing that IT’s role is limited to simply supporting the business function.  57 percent cite it as strategically valuable, considerably down from the high of 72 percent recorded in 2009. In line with this, just 5 percent of organisations measure IT return on investment and 3 percent measure IT innovation.  More than half of all organisations have implemented some form of IT budget cut in the past year.

The survey was conducted online during the months of December 2010 and January 2011 and canvassed opinion from the public and private sectors across a wide range of industry verticals.

“It’s disappointing to see that IT boardroom membership has not increased since 2009,” says Pat Millar.  “We had seen some strong acceleration through 2007 and 2009 but this coupled with a significant drop in the number of respondents citing IT as strategically valuable to the organisation, is a negative development for the industry as a whole.  At a time, when many organisations are trying to re-assess and re-invent how they do business, they fail to understand that IT can serve as a dynamic driver of innovation and creativity.  We encourage IT professionals to be far more aggressive in communicating the message of IT as business enabler and one which deserves its place at the top table,” he adds.

IT Governance and Compliance

On the positive side, there have been some refreshing developments in the area of IT governance and compliance.  45 percent of organisations are now subjecting their IT strategy to independent review, up from just 20 percent in 2009.  There has been an overall increase of 8 percent in the number of organisations reporting the alignment of IT with business strategy as either “very tightly aligned” or “tightly aligned” up from 42 per cent in 2009 to 50 percent in 2011.  The number of organisations offering internal Service Level Agreements (SLAs) to its staff now stands at 79 percent, an increase of 11 percent on 2009.  There has also been an increase in the instance of organisations subjecting the IT function to formal performance metrics, up to 53 percent, representing an increase of 17 percent on the figure recorded in 2009.

“While we welcome these developments, there is clearly a failure by organisations to measure IT return on investment,” comments Millar.  “Significant financial investments are made without any attempt to actually measure if projects have delivered on objectives.  One has to wonder if future IT investment could be threatened by this lack of focus on what are basic operational metrics,” he adds.

IT Decision-Making

A more holistic and cross-departmental approach to project selection has emerged with 86 percent confirming that their decision-making forum includes representation from all business functions.  “It’s clear that projection selection processes have matured with a more collaborative and commercial approach being taken,” explains Millar.  “In the vast majority of cases, decision-making processes are based on consensus across all business functions, recognising the pervasive nature of IT and its ability to influence business operations.”

IT Budgets

More than half of all organisations confirm that IT budgets have been cut in the past year.  Looking forward this year, one quarter predict modest declines in IT budgets of up to 10 percent.  However, this is balanced by a similar number predicting modest increases.  Indeed, one in ten organisations see more aggressive budget increases of between 11 and 20 percent.  “Budgets are under pressure,” comments Millar.  “However, it is encouraging to see almost three-quarters of organisations add new IT services to their portfolio, despite obvious budgetary constraints.  This clearly demonstrates the need for the IT function to add value to the business and stay relevant in the current climate,” he adds.

IT Talent Management

One quarter of respondents are currently undergoing some form of training or accreditation within their respective organisations.  This could be interpreted as a low level of training given the ongoing investment required by IT professionals to keep abreast of changing developments.  However, on the positive side 89 percent of organisations are contributing either wholly or partially to the cost of that training.   Three quarters of training programs have business disciplines at their core.

“Training and education is an easy target for organisations implementing budget cuts,” says Millar.  “For companies with limited resources, our experience tells us that coaching programs are a cost-effective and practical approach to building skills.  They are far more targeted in nature and less expensive than formal training programs.  This lack of training also represents a shift of responsibility from the employer to the employee for their own career development.  We are not surprised by this finding and at a time when financial resources are limited and staff attrition is high,” he concludes.

Clarion Consulting has conducted an online webinar for end-users to discuss these results and their implications for Irish organisations.  To access the session together with copies of the report, “The Evolving Role of the IT Function”, please contact us at info@clarionconsulting.com.

Ends

 

To access a range of supporting materials including the full report, please click here.

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