Technology responsibility: Get it right

Measuring IT governance

While Australia would probably rate in the top five countries for corporate governance, Zarrella admits to being a harsh critic when measuring the nation's IT governance.

“I would put it about eight or even nine out of 10, with 10 being the bottom of the scale. I expect many people would disagree with me, but I don't think we are up there where we should be. My view is that we have done a lot of things (to improve matters) since IT has come in, but too many executives don't understand IT,” he says with some incredulity.

“I have met with too many boards, and too many executives, who have described their IT as a black hole. It worries me when executives are describing such an important part of their business as a black hole.”

“It suggests, and confirms the notion, that many senior executives are simply uneducated about IT, but I am a harsh critic.”

Zarrella dismisses the executive defence that their training or skillset hasn't included optimisation of technology as a paltry excuse.

“Every strategist in every environment must realise that things come into play in the main game, which absolutely demands appropriate attention,” he says. “Whatever you learned in your university days, or your school days, is irrelevant. IT is here to stay and has a major impact. You must know about it. The Wall St Journal has suggested that 47 percent of capital expenditure is spent on IT. Now, if you are spending that amount of money on IT, you cannot tell me that you don't know IT. To do so is irresponsible.

"You might be a 60 year old executive, or for that matter a 40 year old executive, but you must understand IT if you are going to maximise the advantages it delivers,” he says, underscoring the fact that challenges remain in achieving a suitable level of technology responsibility if senior executives simply delegate the role to a CIO.

“The issue with leaving that huge responsibility just with the CIO -- which (KPMG's recently released) governance survey revealed, and that covered off 200 of the world's largest organisations -- is that many of them struggle to communicate to their c-level colleagues about the real business issues of IT. I know a lot of boards can talk about marketing and sales and operational matters, with which they are comfortable, but when it gets to IT there are still many, many executives whose eyes glaze over. They will leave it to the tech heads to take over.

“In our firm, we see businesses struggling with effective IT management. We have many who are absolutely superb at it, but there are some who struggle. We don't have many individuals in corporate Australia, or indeed anywhere in the world, who have an equal understanding of the business and IT.
There are a lot of good people who understand marketing and business, sales and business, mergers and acquisitions and business, but not IT and business,” Zarrella says.