Deloitte IT-Business Balance Survey: Business performance is tightly linked to the CIOs role within companies
DELOITTE CONSULTANTA S.R.L. - 1 February 2011
The voice of IT within businesses is notably getting louder among Romanian companies, as managers are increasingly aware of how significant the IT department is for the business structure, according to Deloitte's latest IT-Business Balance Survey - 'Finding common ground'.
This conclusion stands out from the high number of Romanian participants to this global survey, with 50% stating that the CIOs attend board management meetings (always or on a regular basis); also, 74% admit that the IT component of the firm is a significant component of the business strategy. Given such increased awareness, more than a third of Romanian participants confirm that their companies had no information security or privacy incidents over the past year (see chart 6.7).
As in past years, this Deloitte global survey explores some of the key themes that are vital for setting the direction in IT and Business alignment. Now in its fifth edition, the survey represents the opinion of more than 800 participants from 37 countries. A total of 55 questions were asked and companies from several industries took part, representing a variety of corporate profiles and functions.
Romania joined the project for the first time, with some 50 participants from the IT and business departments of companies representing major industries in the country (Financial Services, Technology, Media and Telecommunications, Consumer Business, Manufacturing, Energy & Resources).
'We joined this project because we wanted to see how the IT role is being perceived within the local business environment,' said Andrei Ionescu, ERS Director, Deloitte Romania. 'We were pleasantly surprised with the high interest generated by this initiative, as we managed to achieve considerably more of our participation target. This performance ranked Romania fifth amongst 37 countries, in terms of participation.'
He continued: 'Almost three quarters of Romanian respondents represented the IT department, and what they had to say was to some extent confirmed by the business-representatives involved in the survey. Answers show that the IT - Business alignment is progressively improving towards fully supporting corporate performance. The greater the role of IT in the definition of the Business strategy and the more IT and Business strategies are aligned, the better the organisation will perform compared to its peers.'
This year's edition roughly explores the same topics as in previous surveys, but from a slightly different angle. Questions were based on six themes: bonding at the top, looking for benefits, serving professionally, engaging respectfully, managing security & privacy, and reaching out to sourcing partners.
Highlights of the 2011 Survey on IT-Business Balance
Bonding at the top. The closer to the top CIOs are, the better. Personality matters too, along with business knowledge and internal and external relationships. The presence of IT experience at management level is another key alignment factor. The high-level dialogue needs to trickle down through the entire IT organisation and create links at all levels.
Romania: According to the survey's findings, security information roles and responsibilities are being defined more clearly, and specialized positions created within the company, in this respect. Only a few companies are still left without a CIO, compared to previous years. Also, the head of IT is an active participant to board and management meetings. 74% of people surveyed agree that the IT has a role within the overall business strategy. Also, 62% of people interviewed admit that their company has and Information Security Officer (CISO) or a similar function. (See charts 1.1 to 1.5 and 6.1).
Looking for benefits. CIOs can help shape the Business. For example, business cases are open windows to challenge business models. CIOs can show how IT investments create value, but they should also help in tracking the benefits. IT can assist the Business in being selective: structured, value-based portfolio management yields more benefits.
Romania: An equal percentage of respondents (32%) agree that their companies either have an IT strategy incorporated within the Business strategy, or that the IT strategy is translated from the business one (see chart 1.6). However, companies are not completely aware of the benefits generated exclusively by the IT, as they continue to analyze them through a business and operational perspective (chart 2.3).
Serving professionally. CIOs must get their shops in order by professionalising IT, 'delivering the goods' to the Business and demonstrating achievements. They need to open the doors of the IT organisation to business people, should measure performance in business terms, and use these indicators to engage with the Business.
Romania: 60% of respondents agree or strongly agree that the price / quality ratio for IT projects and services is very good (see chart 3.2). There is an obvious trend to focus in IT services quality, especially in view of recent economic development that has put a strong emphasis on costs and maximum performance. However, half of the respondents admit that they have no information as to what are the IT costs compared to total costs, nor total revenue (see charts 8.9 and 8.10).
Engaging respectfully. CIOs should structure IT demand management to help the Business manage its demand, while IT focuses on the supply side. Connecting IT with Business must be taken seriously: fostering a dedicated 'relationship function' with appropriate means will help. CIOs should tap into the IT potential of business resources. For the Business, it is an opportunity to gain control, build technology skills and share insights.
Romania: For most companies, the demand management process is formalized and rigorously applied. Also, communication between the IT department and the business is improving (see charts 4.1; 4.3 – 4.5).
Managing security & privacy. Growing cyber security awareness is moving the Chief Information Security Officer (CISO) away from the IT department. This displacement allows the Business to feel more involved in security and privacy matters. Organisations without security information functions rarely implement privacy functions. Neither IT nor Business is aware of the number and severity of actual incidents, making it hard to justify investments in security and privacy management.
Romania: Almost half of the respondents admit that their company has no privacy officer or a similar function in place (see charts 6.1, 6.2, 6.3). However, 68% agree that information security and privacy are business critical or very important (chart 6.4). Also, companies are aware of the significance to have rigorous implementation and monitoring procedures. Based on Deloitte experience, there is increased interest in this area especially in big, multinational companies where this function is required by the group's policy.
Reaching out to sourcing partners. IT outsourcing reflects a search for talent. IT and Business should discuss Service Level Agreements together in order to align them with business requirements. This will result in more satisfying outsourcing deals.
Romania: Companies value specific IT skills, the benefits of cost reduction and the efficiency of outsourced services. However, most companies are carefully monitoring such partnerships, usually through a business – IT combined team (see charts 5.1, 5.3).
The IT-Business Balance Survey is aimed at highlighting the key points on the topic of alignment between Business and IT, and is developed by a multidisciplinary team of specialists at Deloitte in cooperation with Deloitte Enterprise Risk Services and Deloitte Consulting. The questions are based on academic research carried out by Deloitte in conjunction with the Vlerick Leuven Gent Management School. They cover topics at the heart of Business-IT alignment, and are related to IT governance, IT management, IT sourcing and IT security and privacy.
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