What comes first? The IT implementation disaster or the IT governance failure? Time's up—the IT governance failure comes first. But not everyone appreciates this or even knows what IT governance is. That's about to change but unfortunately it's only because of the HealthCare.gov implementation disaster. But first, a quick definition. My favorite IT governance framework is the King III Report on Corporate Governance out of South Africa which added an IT governance provision in 2009 that says:
IT Implementation Failures Are The Norm
For those who are new to the IT governance and implementation conversation, according to some relatively recent research published in HBR one in six IT implementation projects is a colossal disaster. That is, the IT implementation project goes over financial budget by 200% and scheduled budget by 70%. This compares to an average project cost overrun of "only" 27%.
Another analysis by the NACD and Oliver Wyman (disclosure: I'm on the NACD SoCal Board) indicates that the world's top 500 companies lose more than $14 billion dollars because of failed IT projects–a year. This same research indicates that nearly half (47%) of the corporate board members surveyed are dissatisfied with their boards ability to provide IT risk oversight.
So the situation can be summarized as follows: IT projects usually underperform and are cataclysmic disasters almost 20% of the time. Moreover, over half of corporate board members don't think their boards can adequately govern IT risk. I haven't even mentioned the compounding IT and user complexity issues surrounding today's social technology, business model risks, complex security issues, mobile device and date complications, the recent SEC ruling allowing financial disclosure on social networking sites, big data implications, etc. etc.
All of which means that the IT governance challenge isn't getting easier. In summary, the status quo sounds like a recipe for ongoing IT disasters to me. Given this track record, I'm not actually surprised by what we've seen with HealthCare.gov. Fortunately, things may be getting better.
FT Agenda To The Rescue!
The Financial Times Agenda just released the results of a comprehensive project to identify the top 50 IT board candidates who can fix the IT governance shortcoming in the corporate boardroom and beyond with their report "Agenda Digital 50 - Board Candidates With Skills In New Technologies."
This list of 50 executives/board members and candidates represents the fifty leading IT governance professionals capable of helping govern the current and evolving risks and opportunities around information technology for companies and organizations everywhere. I'm very proud to have been selected to the list.
Here's a recent blog post and a link to a conversation on the current IT governance challenge from my role as Senior Fellow, Governance Center at The Conference Board. I've been blogging about corporate governance and the implications around today's social technology innovations for several years and I've spent the last 25 years on a wide range of IT projects including fixing some of these types of implementation failures. And I'm not alone in my desire to help corporations and organizations everywhere get better at IT.
The solution to the systemic IT implementation issue is easy—the fix is better IT governance. Fortunately, the way to fix the IT governance problem is also an easy one. Get qualified people into the boardroom who understand these issues. Fix the IT governance problem and lower risk and lower cost IT implementations will follow.
There are skilled board level IT professionals standing by who are, can and want to serve in the boardroom to reduce the risk of future IT problems and disasters. Thank you to the FT Agenda for their leadership on this issue and for a big step forward in closing this critical boardroom skills gap.