IT literacy rides high in Australian boardrooms

Technology is taking centre stage at most companies, forcing board members to be far more IT literate then they were just a few years ago. While board members don't have to be engineers, a tech-savvy approach helps them make the right decisions. Computerworld polled readers about the current C-level landscape.

Most enterprises today face the tough task of untangling complicated legacy systems but this doesn't mean the IT team alone should shoulder the responsibility of making all these challenging decisions. When it comes to IT, a responsible board is educated, ensuring their companies aren't left behind.

IDC director of the IT management program, Catherin Bennett, says it is all about gaining a competitive advantage and the uneducated will be left behind.

"We're not saying the board has to be a bunch of engineers, but they need to be able to ask their CIO the right questions," she said.

Bennett, who said the bulk of CIOs in Australia report to the CEO, added that technology awareness is at an all-time high.

As reported last week, EDS managing director Chris Mitchell said boards need to recognize the benefit in "renovating" unproductive IT systems.

He said unwieldy computer systems have made businesses inflexible and the corporate challenge now is to unravel, what he calls, the IT hairball - the mix of computer systems tacked together as technology progressed.

Mark Harrington, Roberts Limited computer services manager, said there has been a huge change among board members when it comes to IT literacy, especially in the past two years.

"They're now the opposite to what they were a few years ago; they're now very interested in what we do," Harrington said.

"There's a legal obligation for board members to be IT literate and to understand things like disaster recovery; it is in their best interests."

Harrington enjoys a healthy interest in IT from his company's board, but he believes it could go even further.

"While I think our board has a good understanding of what technology we already have, they don't know what we could have," Harrington said. "There are a lot of options out there, and new technology; I don't think they fully appreciate the possibilities that are open to us."

AXA Australia information security manager Trevor Cardwell describes his board as tech-savvy, which he says has provided a boon for project funding.

"Certainly, management is aware of IT issues and I've not had a lot of trouble getting projects approved or getting money for a project," Cardwell said. "But I think a lot of boards expect that they already have people in the organization who take care of IT, and that dealing with issues like legacy systems is a bit too detailed for them."

Rheem Australia IT manager Stephen Foley says it is the switched on companies that use IT to innovate.

"We don't just use our budget to keep the lights on," Foley said, referring to claims 80 percent of IT budgets are used to maintain systems leaving as little as 3 percent for innovation.

"Although it isn't just about keeping the lights on, it isn't practical for me to just dream up an IT wishlist, although I always include a component in the annual budget for new technology.

"The goal is to value-add and you do need to get the board on side, but that means having a good business case."

Technology alone, he said, doesn't create competitive advantage; it is all about how it is used.

It is a question of give and take, Foley said, with IT streamlining internal processes in exchange for funds that can be used to innovate.

Getting on board the new tech dawn

While there are still plenty of companies struggling with IT-illiterate board members, Leightons CIO Brian Bowman said a "new era of thinking is dawning."

Change is happening, he said, but boards which do not recognize the importance of IT usually don't recognize the capability of their own IT teams.

"Often management sees IT as a cost centre, but there is a new [era] around the corner and executives will see IT as an enabler," Bowman said, adding that some organizations, confronted with disastrous projects, have used IT for a successful turnaround.

"For example, our company had fallen into a big deep hole and the management strategy was simple; it asked how to get out of it," he said. "We consulted a third-party, who advised better use of our IT.

"As a result, the last 15 years have seen us emerge as very innovative, but it took someone external to our company to get IT to where it should be," Bowman said, adding that mundane number-counting still overshadows IT to some degree.

Maria Gillam, IT manager at Southern Cross University, says an IT-savvy board equals an innovative company.

"The very nature of IT encompasses an element of innovation," Gillam said. IT has a role to play in educating senior executives so they can make informed decisions, she said.

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