Fujitsu provides leadership in development of International initiative on Governance of IT Investments

During April 2006, the IT Governance Institute (a part of The Information Systems Audit Control Association - ISACA) released the first documents of their Val IT™ (achieving the Value from IT) initiative. This global initiative is intended to respond to the need for organisations to optimise the realisation of value from IT investments and addresses key management practices for three processes:

The initiative has drawn on the collective experience of a team of practitioners and academics, existing and emerging practices and methodologies, and research to develop the Val IT framework. Fujitsu, whose generous sharing of its many years of experience with enterprise value management, contributed significantly to the development of the Val IT framework and management practices. John Thorp was a major participant, continuing the leading global role Fujitsu has played in the area of value management which started with the publication of The Information Paradox.

The Business Need for Val IT

Organisations continue to make significant IT-enabled business investments: investments in sustaining, growing or transforming the business that have a critical IT component. Experience and an increasing volume of empirical research demonstrate that such investments, when managed well within an effective governance framework, provide organisations with significant opportunities to create value.

Many organisations have created value through selection of the right investments and effective management of the investments from concept through implementation to realisation of the expected value.

However, without effective governance and good management, these investments provide an equally significant opportunity to erode or destroy value. Indeed, according to a 2002 Gartner publication, 20 percent of all expenditure on IT is wasted, representing, on a global basis, annual value destruction of US $600 billion.

A key lesson is that IT investment is no longer only about implementing IT solutions. It is increasingly about implementing IT-enabled change. This implies greater complexity and greater risk than historically has been the case. The management practices that have traditionally been applied are no longer sufficient. The message is clear: IT-enabled business investments can bring huge rewards, but only with the right governance and management processes and full commitment and engagement from all management levels. Up until now, however, management has not had a clear way to consider investments in IT or how to report on, or monitor, the potential success or failure of such investments.

Val IT extends and complements COBIT® (Control Objectives for Information and related Technology, also from IT Governance Institute), which provides a comprehensive control framework for IT governance. Specifically, Val IT focuses on the investment decision (are we doing the right things?) and the realisation of benefits (are we getting the benefits?), while COBIT focuses on the execution (are we doing them the right way, and are we getting them done well?).

Effective governance starts with leadership, commitment and support from the top. However, such leadership, whilst critical, is not enough. Val IT supports the leadership by providing a comprehensive framework, with a full complement of supporting processes and other guidance materials, developed to assist the board and executive management in understanding and carrying out their roles related to IT-enabled business investments.

Val IT provides a one-stop, credible and codified source to support the creation of real business value from IT-enabled investments. Val IT has relevance to all management levels across both the business and IT, from the CEO and the C-suite to those directly involved in the selection, procurement, development, implementation, deployment and benefits realisation processes. Val IT contains essential guidance for all.

And what is the value of Val IT?

The value of Val IT to organisations is the significant contribution to the achievement of real business value from today’s investments in IT-enabled change by:

Like to know more about Val IT?

The Val IT documents (covering the framework, the business case; and a case study) are available from the web site www.isaca.org/

Peter Harrison, who heads the Australian Fujitsu Consulting Enterprise Value Management practice, has worked with John Thorp over the last year on the Val IT initiative, and is currently the Australian representative of the IT Governance Institute Val IT Advisors Team for the global roll-out. Peter has over eight years of value management experience within Fujitsu Australia and New Zealand, having worked with most of our leading enterprise value management clients such as WA Police, Qld Health, RailCorp, Auckland City Council and Suncorp.

Peter will be speaking at the IQPC IT Governance Summit 2006 on May 23 in Sydney on the subject of Val IT.

Information about Val IT in this article is based on the IT Governance Institute publication “Enterprise Value: Governance of IT Investments – The Val IT Framework”.

Peter Harrison

E-mail:peter.harrison@au.fujitsu.com