"Boards of directors have a lot of committees: compensation committees, audit committees, M&A committees, among others. But what about IT? Are there committees that focus squarely on the acquisition, deployment, and support of IT? Most companies do not segment IT as a unique activity. Perhaps this means that they see technology as more tactical than strategic. Perhaps they don't have enough expertise to actually staff a technology committee," says Cutter Consortium Senior Consultant Steve Andriole.
Andriole suggests seven questions to think about, given the amount of money that companies spend on IT each year:
- How would you characterize the (nontechnology) senior management team's awareness of technology issues and challenges?
- Is technology considered "tactical" or "strategic" at your company?
- Is your company's board of directors routinely informed about the state of technology at your company?
- Has the board of directors been recruited in any way because of the desire for technology experience?
- Does the CIO (or technology executive) present to the board?
- Does the CIO communicate to the board between board meetings on technology matters?
- Do technology vendors present to the board?
Andriole continues, "The key is the extent to which board members are kept apprised of technology issues, challenges, and major projects, and the extent to which technology executives develop relationships with board members much like COOs, CFOs, and CMOs have before, during, and after board meetings.
"So is the board essentially unaware of technology at your company? Or is there a mechanism to keep the board informed about -- and involved in -- technology? If the truth be told, companies that regard technology as a necessary expense to be managed probably see little need to keep their boards informed about technology -- except perhaps to announce further reductions in technology spending (about which the CFO is extremely proud). But companies that invest in technology for strategic purposes should keep their boards very informed about how technology investments will help generate revenue and profit."
Andriole concludes, "Is there risk in communication with boards about technology? Some, since boards tend to be relatively weak in technology strategy, and project updates can be misinterpreted. In other words, effective communication will often require education, or boards may become anxious about, say, a US -million ERP project that's behind schedule and over budget. Education assumes a commitment of time and resources and perhaps even a planned technology discussion at every board meeting. But all this assumes a desire to keep the board informed so that board expertise can be leveraged for technology acquisition, deployment, and support decisions, especially to the extent that such decisions are strategic." |
