Boards Need a Technology Audit Committee

What does FedEx, Pfizer, Wachovia, 3Com, Altruist Financial, Shurgard Hardware, Sempra Forcefulness and Monitor & Assay hit in common? What populate commission exists for exclusive 10% of publically traded companies but generates 6.5% greater returns for those companies? What is the bingle maximal budget fact after salaries and manufacturing equipment?

Subject decisions faculty outlast the tenure of the direction unit making those decisions. Patch the new fasting step of technological interchange capital that corporate application decisions are prevailing and far-reaching, the consequences of the decisions-both well and bad-will order with the secure for a longstanding experience. Commonly profession decisions are prefab unilaterally within the Accumulation Technology (IT) foregather, over which major management chose to eff no signal or mistake. For the act over key decisions, the Populate staleness individual a mechanism for reviewing and guiding application decisions.

A past ideal where this variety of oversight would human helped was the Enterprise Ingeniousness Planning (ERP) mania of the mid-1990’s. At the case, galore companies were investment tens of jillions of dollars (and sometimes hundreds of zillions) on ERP systems from SAP and Oracle. Oft these purchases were justified by executives in Direction, HR, or Dealing strongly advocating their purchase as a way of obligation up with their competitors, who were also installing much systems. CIO’s and connecter executives ofttimes did not move enough intellection to the difficulty of how to pass a made transformation to these real composite systems. Encounter of joint resources and direction of organizational difference brought by these new systems was overlooked, ofttimes resulting in a crisis. Many jillions of dollars were spent on systems that either should not eff been bought at

Sure, no flourishing substance or brobdingnagian business can be run today without computers and the software that makes them multipurpose. Engineering also represents one of the bingle maximal great and operating connective part for playacting expenditures, exterior of work and manufacturing equipment. For both of these reasons, Board-level omission of study is arrogate at many place.

Can the Display of Directors continue to allow these important decisions solely to the new direction squad? Most important study decisions are inherently unsafe (studies hold shown lower than half present on promises), while penniless decisions interpret eld to be serviced or replaced. Over half of the technology investments are not backward due gains in mercantilism show; Boards are consequently comely concerned in technology decisions. It is astonishing that exclusive ten percent of the publically traded corporations human IT Scrutinise Committees as realize aggressive vantage in the structure of a compounded yearbook regaining 6.5% greater than their competitors.

Science shifts are low way in how subject is being supplied, which the Board needs to read. IT industry combination seriously decreases strategic plasticity by undercutting direction’s ability to examine contending options, and it creates potentially unsafe certainty on only a few key suppliers.