The changing face of risk management - includes related article on information sources for internal auditors and information technology planning

Internal Auditor,  Oct, 1998  

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CFOS also recognize the need to diversify their experiences. Only nine percent of CFOS responding to a Grist survey consider experience in accounting or controllership as key to promotion.

Internal auditors who are heavily involved in auditing operational aspects of the organization instead of focusing only on financial reviews may be a step ahead of the competition. In fact, in many organizations the General Auditor's position is a stepping stone to bigger and better titles - and paychecks.

IT Projects Delivered Late and Over Budget

The average company completes only 37 percent of large information technology (IT) projects on time and only 42 percent on budget, according to a recent study from The Hackett Group, a U.S. benchmarking firm. Even for short projects - defined as less than 30 days' duration - the on-time/on-budget performance rate is only about 80 percent.

"The substandard performance of IT has held back the rest of the corporate house," says Greg Hackett, president of the firm. "IT must have better project managers; establish clear leadership; deliver higher levels of customer service; professionally manage suppliers; and, perhaps most importantly, have simplified and standardized operations."

According to Hackett, IT has been plagued by chronic inefficiencies related to a lack of profit-driven productivity and poor time management. "Little more than half of application software development investment is directed toward supporting revenue-generating functions. Instead, as much as a third of current IT investment goes toward rebuilding administrative and support functions."

Other conclusions from the study include:

* IT staff spend the equivalent of more than three days a week - almost 70 percent of their time - administering day-to-day operations. Only eight percent of IT staff are focused on decision support or strategic planning for future use of technology.

* IT is an expensive function. The provision of ongoing IT services costs a company an average of $9,218 per end-user. This figure does not include one-time investments in new software and infrastructure development.

* There are two main drivers of IT cost: the extent to which technology is embedded in the delivery of goods and services to the company's customers, and the way in which an IT organization structures itself to provide technology.

* Key elements of a world-class IT organization include uniformity in operating systems and programming languages and the utilization of data standards.

* Executive leadership of information technology is increasingly recognized as key to realizing the function's strategic value and managing its cost growth. Some 87 percent of companies participating in the study have a CIO, and 75 percent of the time the CIO reports to the CFO.

"As we march toward the millennium and beyond, the success of IT as a critical strategic player within the organization will be imperative," Hackett said. "Without that success, significant improvement and advancement at virtually every other functional level could be compromised. That's a heavy burden to bear, but that's the mandate facing IT managers in business today."