Line-of-business executives are using digital transformation to take control of IT spending decisions. Ten per cent of CIOs report more than half of technology spending is now controlled outside IT, and that's almost double the 2013 rate, according to research from recruitment specialist Harvey Nash and consultant KPMG.
This decentralisation of IT investment leads some to question the role of the traditional technology department. And while the role of the IT organisation remains in a state of flux, some element of governance -- challenges, objectives and solutions -- will be crucial to successful technology implementation.
CIOs and their technology peers, therefore, will play a key role in helping line-of-business executives to make the most of their IT investments. ZDNet speaks to the experts and presents four best practice tips for establishing great IT governance in the digital age.
1. Focus on helping business peers to make the IT right decisions
Mark Ridley recently left his long-term position as director of technology at online recruitment firm reed.co.uk. He now taps into his knowledge and helps other organisations make the most of developments in digital technology.
During his time at reed.co.uk, the firm embraced the cloud and pushed as much technology ownership as possible to individual lines of business.
The decentralised approach means business heads at the firm are responsible for the technology they buy. Ridley says CIOs must be user-centric: they should listen to internal customers and help them implement the systems they demand.
"In the past, IT provided an expert resource and dealt with information security and data integrity," says Ridley. "Today, the need for a user-centric approach means IT should be more than a centre of rules and regulations. Instead, technology should be tendrils that run through the entire organisation and the business should make its own IT decisions."
Users, therefore, must be given more responsibility for IT change. But Ridley says governance still plays a crucial role in this decentralised structure. In fact, the creation of a wider ecosystem of external partners and services means process and management is more important than ever before.
"The business needs people who now how to interact with IT vendors and to make great procurement choices," he says. "It still needs people that understand where data lives, especially in an age of the cloud, where organisations are not necessarily storing their own data on site."
2. Lay the ground rules and make sure people follow them
Like Ridley, Poli Avramidis, CIO at the Bar Council, is a big advocate for the power of IT-led transformation. At the same time, however, he says governance is absolutely crucial and can provide a means to manage change.
"I like flexibility and I like to be able to adapt to the reality and pressures of the day," says Avramidis. "But you need some sort of structure in terms of organisational approach. Take an area like application ownership -- you have to have some controls and mechanisms in terms of change management."
Those filters, he says, must be applicable in a standardised way globally. Rather than isolated systems implementations, technology chiefs must look at IT as a governable structure with associated costs and benefits. "CIOs must consider key elements, such as the data schema or the information retention policy," he says.
"As an IT leader, you have to lay some ground rules and then make sure people across the organisation follow your procedures. Good governance can also help when you have to go through a data migration. It allows you to have a tight grip on the information you hold."
3. Accept that responsibility for project success is shared
Warwickshire County Council CIO Tonino Ciuffini says governance in the modern age has undoubtedly become more complicated. As his other peers identify, the interconnected nature of digital IT means CIOs must work with a range of partners across a series of different organisations. Ciuffini, for example, points to partnership work his organisation has undertaken with related public agencies.
"We're often not in control because other organisations are leading the initiative," he says, pointing to partner projects with police and health services. "We still, however, need to think about how we get involved in the governance of the project -- and that can present a challenge. You have to work out how to work with, and influence, your partners when you're not in full control."
Ciuffini enjoys the challenge and says finding new ways to work is a key part of the role for a modern CIO. "Let's accept the change, see what we can do and decide how we're going to work," he says. "In the public sector, there's often greater governance in place when funding is tighter. Every partner has to be clear that they're getting the maximum return on their investment."
The key, says Ciuffini, is to relate project aims back to core organisational objectives. "My leadership team ensures that activities are focused in the right areas," he says. "But responsibility for governance is now absolutely shared, both across public sector partners and third party organisations."
4. Revisit the original project aims time and again
Brad Dowden, CIO at recruitment specialist Airswift, is another IT leader who recognises the importance of a return on investment. He says CIOs who are looking to deliver great returns must pay careful attention to governance. IT chiefs should expend as much effort as possible on due diligence before getting a project off the ground.
"Too many executives take a quick and dirty analysis, where they simply look at the costs to get something done and supported, particularly when it comes to IT," says Dowden. "There isn't enough consideration of how a project matures and changes over time from development to go live and into operation."
Once the project is rolled out, Dowden says IT teams need to constantly look back to the original aims, such as considering whether the initiative is still being done for the right reasons and whether budgets are being hit. "By doing the legwork, you should have much more realistic figures, which supports your vision and makes your stakeholders feel confident. It's a constant cycle," he says.
"CIOs need to understand that all the systems bought by individual departments are straws that are bound together by rings of governance. Governance makes sure those systems are integrated and that the business' technology strategy is heading in one direction. You need to make sure that, when lines of business buy different systems, you can still get the data out and use it effectively."