IT voices drowned in corporate governance rush
By Lucy Sherriff
Published Thursday 22nd April 2004 09:21 GMT
Companies are ignoring IT personnel in project planning, despite the
swathe of corporate governance regulations driving a huge investment
in IT.
Gartner estimates that European businesses will spend $2bn on IT
projects supporting compliance with Basel II requirements. Ask
yourself this: would spend that kind of money without speaking to an
expert?
According to Economist Intelligence Unit research, this is exactly
what is happening. An EIU survey shows that only 27 per cent of
senior executives ask for input from their IT departments when
planning major deployments.
This may be an age-old problem, but the consequences are more
significant than ever. Failure to meet new regulatory requirements
could result in jail time for chief financial officers, so why are
they so reluctant to speak to the techies?
According to Ayman Gabarin, European VP at process management firm
Changepoint, the communications gap between IT and the board means
that IT is seen as a tactical, as opposed to strategic, department.
He argues that a cultural shift in the IT department is required: if
IT can start thinking about itself like a business, it will be able
to speak in the language of the board and will have more influence.
The EIU research, based on an online survey of 116 senior executives,
found a mismatch between the expectations of the board and the
reality of implementation. While more than 60 per cent of respondants
felt confident they were on track to meet compliance deadlines for
regulations such as Basel II, IFRS and Sarbanes Oxley, similar
numbers said that it was difficult to find out exactly what they were
being told to comply with.
"You have to view these results with a certain amount of scepticism,"
said the EIU's Gareth Lofthouse. He argues that the barriers to
compliance the executives have identified suggest that their
confidence is misplaced.
Peter Redshaw, an analyst at Gartner, explains: "The situation is
paradoxical: companies could approach compliance as a series of
separate IT projects, but they would find themselves repeating and
even undoing a lot of their work. Identifying all the common elements
in the various regulations is a big task and the IT function is
certainly feeling the strain," he said. Failure to consult IT on the
best approach could mean a lot of wasted effort.
"IT is the bedrock and the foundation on which companies will build
their compliance. But capturing IT best practice is difficult because
people working on successful projects rarely have time to stop and
record what worked. And if they are only just starting, they are in
real trouble." ®
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