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News flash: company boards are starting to ‘get’ IT

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Updated: Techies know how important IT is to a company’s success — what IT pro would ever say that IT doesn’t matter? But new research indicates that the boards of directors that are supposed to guide corporate strategies, are starting to get that message as well.

A survey of 175 board members by Gartner(s it) and Forbes found that improving IT was rated as important as boosting sales in terms of overall priorities.

This is particularly interesting since directors are not a particularly tech-savvy bunch — only 16 percent of directors have any background in IT, according to Gartner VP and Distinguished Analyst Jorge Lopez.

The takeaway for IT professionals is that they must paint the IT investments they want to make in business terms that the board understands, for example showing how these improvements can cut costs, streamline the supply chain and/or improve the product mix. (In related news, The Technology Business Management Counsil released a publication Monday that talks up the need for CIOs to run IT as a business.)

In a statement, Gartner’s Lopez said:

Board directors clearly have a top priority to invest in IT and leverage IT for competitive advantage … These forward-looking and proactive attitudes are being made although more than half of the survey respondents replied that they are preparing for a market recession. It underlines the fact that the investments they plan to make are essential to growth and even survival, and that they are willing to throw the investment gauntlet down now, rather than later.

According to the second annual Gartner-Forbes 2012 Board of Directors Survey, a whopping 86 percent of respondents — surveyed in March and April — believe that IT’s strategic contribution to the business will increase by 2014.

Sales and IT Investment in dead heat, Gartner says

Update: The top investment priorities this year are in IT and sales, with  64 percent of respondents predicting budget increases in both areas this year, compared to last. Just over a quarter of respondents (26 percent) said they expect investment in both areas to remain the same and 10 percent said they expected budgets in those areas to decrease this year.

On a macro level, after months of reports on lax board oversight, it may be heartening that directors are at least paying lip service to being actively involved in the ongoing health of companies. Time will tell if this is a long-lasting trend or a knee-jerk reaction.

Photo courtesy of Shutterbox user hxdbzxy

6 Responses to “News flash: company boards are starting to ‘get’ IT”

  1. Chris Haddad

    Would have been helpful to see survey answers describing whether the Board actually knows how to run IT as a business. Simply asking for the business contribution of an IT investment does not necessarily mean the Board understands how to run IT in an efficient, productive, and business manner. For example, does the Board review the application portfolio management strategy? does the Board understand IT’s software development efficiency score? does the Board receive dashboard reviews on the portfolio compliant percentage with SOA, Cloud, and mobile? can the Board quantify the value of the business social and information strategy? How many Boards demand a published IT strategy with yearly performance improvement targets?

    • michaelsimborg

      @Chris – great points! Also, can the board re-think their metrics and “track” IT in “new” or more valid and reliable ways (i.e. not traditional ways that apply to different functions, markets and economies)?

  2. “News flash: company boards are starting to ‘get’ IT”

    No, they realise how important it is, but don’t necessarily “get it”. They probably rely on TV ads for their insight into IT options.