IT voices drowned in corporate governance rush

Ignore techies at your peril

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 you 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." ®

Related stories

SAS 9 on intelligence-gathering mission
Michael Dell to relinquish CEO title, command of brain
Worldcom allowed once more to bid for Federal contracts
McNealy slams Sarbanes-Oxley

Sponsored: Today’s most dangerous security threats