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How important is an IT governance approach to achieve business agility?
An IT governance approach is very important in achieving business agility. In the last couple of years, delivery models have changed very fast. There has been a revolution in the travel, retail, and banking verticals. Anything that is dependent on IT has seen a revolution. So, it is important that IT keeps pace with the requirements of business. In other words, there has to be IT agility supporting business agility. The question therefore is how do you achieve this IT agility and how do you achieve it through IT governance? Governance, as defined by ISACA, comprises three parameters – benefit realisation, risk optimization, and resource optimization. Governance has to consider these three aspects and come out with very clear directions for the management to follow, achieve the objectives, and secure the results. Essentially, governance entails understanding what is required by business, prioritizing these needs and setting the right direction. To me, there is no other alternative but to use IT governance in a very judicious and convincing manner to achieve agility and the end objective of benefit realisation.
But for a CIO, stability is also important? Can agility and stability coexist?
This is exactly what the balancing act is all about. If an enterprise technology decision maker expects stability while the business is expecting something else, he will be left behind. For instance, if a bank today says that, to maintain stability of operation, it wants to stick to its core banking operations without getting into mobile banking or internet banking, it is bound to be left behind. A CIO has to optimise risks. However, this does not mean that he goes headlong and takes all sorts of risk just to keep up with others. There needs to be a fine balance.
So what are some best practices that CIOs can follow while adopting IT governance to achieve business agility?
The first and foremost thing for a CIO is to have a solid framework. These are guidelines that have been done worldwide, and are tested and proven. An enterprise technology leader should, therefore, not reinvent the wheel or try to experiment with things that are untried or untested. One such excellent framework is COBIT which ISACAS has come out with. This is a business framework for governance and IT. The good part about this framework is that if there is any challenge that a CIO is facing (be it with respect to agility, security, or delivery), by using the best practices in this framework, he can know where he is lacking.
Are Indian CIOs aware of such frameworks? Are they adhering to them?
Indian CIOs are trying to catch up. They are trying to follow some models abroad. But one critical thing that they lack is having a full-fledged support from their top management. There are lots of CIOs who are very technical and can’t talk the business language. On the other hand, business people are also not familiar with the frameworks that a CIO should use. The result is that technology and business are not communicating in the same language. They are in two different camps. Unless they use the same language, there would always be some misunderstanding.
Which verticals are more agile than others?
The verticals which are ahead and progressing fast are BFSI, travel and tourism. Retail is picking up fast as we daily see a new site offering some e-purchase. I don’t see manufacturing too geared up. I am not sure if telecom is doing a lot except on the billing front. I expect lots of things to be done in the education space. Foreign universities are getting away from the classroom model and entering into the e-learning model. I don’t see the Indian universities doing that at all. That is a huge market across Indian and neighbouring countries that we are missing out on.
Is IT governance capable of fostering innovations, which can help in achieving business agility? How?
Absolutely. The new version, COBIT 5, has come out with a very detailed process of managing innovation. There are 5-6 management practices with detailed measurements, goals, and key indicators with respect to how key innovations are being adopted and deployed in an organization. If a CIO uses a good framework, it does not only tell him routine things but also futuristic things. We have seen how those companies that don’t innovate go down. Nokia is an example. Managing innovation is therefore important but in the day-to-day operations CIOs often overlook this aspect. In COBIT 5 there is a process clearly defined. So the CIO knows these are the processes that I am not clearly following and I will be hit somewhere.
What challenges do CIOs encounter as they adopt IT governance in their organizations? How should they ideally address these?
The first and biggest challenge is that a CIO understands business and business understands him. Another challenges for IT and the CIO is to be able to talk convincingly and sell those ideas to the right champions. Champions of IT are missed in the business world and are badly needed.
What is the yardstick to measure agility?
COBIT has a goals casket. The stakeholders’ expectations are very clearly articulated, and you know clearly what is to be achieved. From these you get the governance objectives from which, in turn, you derive enterprise goals. There are measures for enterprise goals – IT related goals and enabler goals. The beauty of the entire goals’ casket is that if you find that something required by stakeholders is not being achieved by the goals downstream, it will directly hits your stakeholders’ expectations. So, measurement is not only clearly measurable but it can be measured in different components and for each goals you have specific metrices showing how far you have reached the stakeholders’ expectations.
When it comes to adhering to such a governance framework, the banking sector is doing well. Stock exchanges are also doing well. One company that has been doing really well is surprisingly Meru Cabs. They have implemented innovative processes for optimized usage, measuring customer satisfaction, and changing routes. Drivers’ expectations are being achieved by deploying IT. Every aspect of governance is being met by them. I fail to understand how can one achieve business agility without having a business framework. You can have a services’ framework, security framework, architectural framework, project management framework but you need a comprehensive business framework too.
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