IT Highly Valued, But Still Not a Major Contributor to Innovation

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Rolling Meadows, Ill. —Jan. 22
Eighty-seven percent of senior executives believe information technology (IT) is important to their organizations, according to a global survey commissioned by the IT Governance Institute (ITGI).

However, more than half do not feel IT is an important contributor to innovation, underlining an opportunity for IT to increase its value as a strategic partner. Additionally, nearly half of all organizations do not measure the value they are achieving from IT.

More than 250 non-IT executives in 22 countries were interviewed by PricewaterhouseCoopers Belgium to determine their views on IT’s contribution to the business and how their enterprises are governing their IT. Full results of the survey are available in a report titled “An Executive View of IT Governance,” available as a free download at

The ITGI study revealed that 59 percent do not view IT’s contribution to innovation as important or very important, although a significant majority recognize IT as a major contributor in its traditional strongholds: efficiency and effectiveness. Only a third of enterprises rely on their IT departments to provide information about potential business opportunities enabled by new technologies, a key benefit of innovation.

“Executive management is generally convinced of the value of IT investments, but there is a significant lost opportunity that enterprises can close by measuring that value and paying more attention to IT’s potential contributions to innovation,” said John Thorp, member of ITGI’s IT Governance Committee.

“Given the current economic climate, enterprises should strengthen their governance of IT to ensure that their expenditures are delivering real value, reduce or curtail those that aren’t, and pursue innovative uses of IT that can sustain and increase value.”

Executives reported that the organization’s culture and a lack of the right skill base are among the top barriers to achieving value.

“Fortunately, these executives have the power to reduce both of these barriers,” said Robert Stroud, international vice president of ITGI and vice president of service management and governance at CA Inc. “In their position, they can ensure that training is provided to employees, and they can set the tone at the top to result in a culture change.”

ITGI, a nonprofit, independent research organization affiliated with the professional association ISACA, also found that executives do not believe IT managers are communicating new opportunities to the business. This finding was in contrast to a 2008 study of IT managers, who reported that they provide the business with frequent information. A solution, according to ITGI, is to include the chief information officer (CIO) on the executive team — 40 percent of respondents do not currently do this or do not have a CIO.

Based on the challenges that executives identified in the survey, ITGI offers the following advice:

  • Take ownership of IT governance and assume overall accountability over IT.
  • Make the CIO reporting line as direct as possible to the top executive decision body.
  • Use external advisers, when necessary, as a source of knowledge and guidance.
  • Pay more attention to the potential for innovation IT can offer.
  • Start measuring the value that IT brings, or does not bring, to the enterprise.
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