IT business balance survey 2009: Shaping the relationship between business and IT for the future

IT business balance survey 2009: Shaping the relationship between business and IT for the future

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Take a look at the relationship between IT and the Business. The difficult environment is providing an unprecedented opportunity for IT leaders to show their added value and significantly increase their impact at board level. This is one of the surprising findings of the third edition of Deloitte's IT-Business balance survey, published today.

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2009 Survey onIT-businessbalanceShaping therelationshipbetween businessand IT for thefuture
The content and layout of this report are the copyright of Deloitteor its contributors and are protected under copyright and otherrelevant intellectual property rights laws and regulations. Noreproduction in any form or through any medium is allowed withoutthe explicit consent of Deloitte.This report has been written in general terms and therefore cannotbe relied on to cover specific situations. Although Deloitte verifiesthe reliability of the information given, such information is generaland Deloitte may not be held responsible in any way for any possibleerror that might occur or for any use or interpretation that could bemade of this information without the assistance of Deloitte.The information contained in this report is based upon the law,regulations, cases, rulings, and other authority in effect at the timethis is drafted. Subsequent changes in or to the foregoing (for whichDeloitte shall have no responsibility to advice the reader) may resultin the information contained in this report being invalid.Application of the principles set out will depend upon the particularcircumstances involved and we recommend that you obtainprofessional advice before acting or refraining from acting on anyof the contents of this report. Deloitte would be pleased to advisereaders on how to apply the principles set out in this report to theirspecific circumstances. Deloitte accepts no duty of care or liability forany loss occasioned to any person acting or refraining from action asa result of any material in this report.
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Contents
3Foreword
5 Survey highlights
7 A word on the approach and the participants
12 Evolutions and trends
19 IT Governance
27 IT Management
39 IT Outsourcing
47 Security, privacy and fraud
Foreword
It is our pleasure to bring to you the third edition of the IT-Business Balance Surveyreport. As in the previous ones, it explores some of the key themes which shape therelationships between IT and the Business.Most companies are still fighting the impacts of the crisis. But in spite of the urgencyand the uncertainty which rule today, now is probably a good time to reflect on howIT and the Business can work further together to create value. The years to come willprobably see the advent of new relationship models, with the roles and responsibilitiesof IT and the Business being shifted and merged towards more integration, and amuch more intensified dialogue.In this context, looking outside of the company can be very valuable to get fresh ideason how to deal with Business-IT alignment. This is one of the goals of this report. Itonly gives a glimpse into key areas, but we hope it can be the starting point of fruitfulthinking.The 2009 edition took the IT-Business Balance Survey to another level of ambition, asthe number of participating countries has drastically increased this year. The survey can(almost) be called global, since companies from five continents joined in, representinga vast array of industries and corporate profiles. This expanded participation broughta wealth of additional insights, and further increases the value of the survey as asounding board for companies across the globe.
SincerelyChris VerdonckPartner, Deloitte Enterprise Risk ServicesEMEA ERS Practice Leader
Christian CombesPartner, Deloitte ConsultingCIO Services Leader Belgium
2009 Survey on IT-business balance Foreword3
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Survey highlights
The current economic context has given legitimacy to CIOs to act as leaders and intensify their dialogue with theBusiness. Hence the crisis gives an opportunity not to be missed to better anchor the role of the CIO as advisor andstrategist. In order to tackle the challenging role of IT and the CIO, organisations must build business skills within ITand ensure that the integration – and thus alignment – between Business and IT trickles down throughout the entireorganisation, at strategic, tactical and operational levels. Our survey shows some evolution in that direction, but alsoconfirms that there is still some way to go before true integration of IT and the Business is achieved.
Evolution and trends: IT is expected to go beyondautomation and efficiency to deliver businessvalueThe decisive external factors influencing IT decision-making are evolving, but with significant regionaldifferences. In EMEA, cost reduction has, in many cases,become the most influencing factor for IT decision. Inthe Americas, fluctuating technology prices and businesstransformations are the key drivers, while in Asia-Pacificnew technologies play a much larger role than any otherfactor.When looking to the future, IT is expected to bring morebusiness value than the traditional “more automation atless cost”. In EMEA, more emphasis is put on “turnovergrowth” and “profit growth”, while in the Americas andAsia-Pacific, respectively “go-to-market” advantage and“higher customer satisfaction” are expected to be themain outcomes of IT. These can be read as signs of thechanging role of IT in business value creation.IT Governance: IT is still not heard enough at thetop, which impairs alignmentGetting IT’s voice heard at the top is still difficult: abouthalf of the responding companies rarely or never discussIT matters at board level, and 3 out of 5 respondents(both IT and Business) note that IT management isnever or rarely engaged in board meetings. IT steeringcommittees are expected to foster the discussion of ITissues at board level, but they do not always get all theattention they deserve from the top.The alignment between the IT and company strategiesmust go beyond budgeting – aligning IT and Businessstrategies is too often a one-off exercise. One out of 5respondents report that their IT strategy is rarely or evennever aligned with the company strategy, and for themajority it is still a yearly exercise tied to the budget.Globally, organisations must further focus their attentionon the compatibility of the IT directions with the overallstrategic orientations.
IT Management: IT is still not the driving force itshould be but is getting closer to the business fordecision makingThe results of the survey show that as a whole, IT is stillnot perceived as the main driving force behind businessprojects: with only 41.5% of respondents seeing itas “often” to “always” the driving force, and 58.5%answering “never” to “sometimes”. IT governancecan help IT management get to full speed: our surveyconfirms that the more IT is considered at the highestlevels of governance, the more it can act as a drivingforce.More and more companies are institutionalising therelationship between the business and IT: finding the“just right” point is the challenge. The use of KPIs andthe alignment of IT performance with business value areprogressing. The current context has led to extensiveand drastic reprioritisation of IT investment portfolios.This resulted in an intensified dialogue between ITand the business, with over 45% of the respondentsindicating that the IT projects and investments are acollective decision of all the business departments withIT. Institutionalising this level of dialogue beyond thecrisis should be on the CIO’s mind.Our survey shows that a formalised and structureddemand management allows IT to listen to the Businessneeds – it proves to be a means to get Business and ITaligned. Demonstrating the value of IT to the Businessstarts with a clear view on IT financials throughformalised costing and chargeback.IT (out)sourcing: still an option – with cautionThe survey shows no sign of less comfort withoutsourcing in the current economic climate: it isperceived by both IT and the Business as a viable optionto deliver IT services, albeit with a prudent stance, 60%of respondents stating “ derately comfortable”a moattitude towards outsourcing. On-site sourcing modelsremain the most common types of sourcing, but thereare significant differences between regions.
2009 Survey on IT-business balance Survey highlights5
IT (out)sourcing is a joint Business affair: 69.9% ofrespondents indicate that the decision for IT (out)sourcing is made either jointly or with the businessinput. However IT overestimates its role in the decisionmaking process for outsourcing – survey responsesdemonstrate the value Business attaches to servicedefinition.
IT Security, privacy and fraud: still not enoughawarenessBusiness respondents to the survey expect a relativelyhigher share of budget to be dedicated to security anddata privacy than their IT counterparts.
Overall, over 50% of both business and IT respondentsbelieve that IT is highly committed to combating internalfraud – but EMEA respondents are more sceptical thanin other regions.
There is still a lack of awareness regarding the numberand severity of actual incidents. Hence the valueof appropriate security and privacy managementcapabilities remains underappreciated, and it is difficultto justify required investments.
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A word on the approach and the participants
MethodologyIT / Business split of respondentsThis year’s survey explores the same topics as in previousyears: Evolutions and trends shaping IT decision making,IT governance, IT management, IT outsourcing andEMEAsecurity, privacy and fraud.Both IT and non-IT professionals were approached forthis survey, via mailings and direct contact.Asia - PacificIn order to allow for comparisons and to preserve theconsistency of the analysis over time, we have kept thequestions used in the previous editions. Our team has,Americas (excl. USA)however, added a few questions, to refine the study andensure the survey evolves with the context.0% 10% 20% 30% 40% 50% 60% 70% 80%A total of 30 questions were asked to participants, whoThe IT departmentresponded either electronically or on paper. An onlineThe businessversion of the survey was released on the DeloitteInvision Internet survey platform. The data collectionprocess was supported by Deloitte’s internationalnetwork of member firms.It should be pointed out that the survey’s objectivewas to identify general trends across industries andcountries, not to provide a scientifically representativeanalysis of a given segment. As such, it aimed atgathering as many answers as possible to ensure broadcoverage, but not to constitute a representative sampleon all dimensions.Survey participants’ facts and figuresNumber and profile of participantsInternationally, 1,868 respondents participated in this2009 IT-Business Balance Survey. Incomplete, duplicateor inconsistent responses have been excluded from thefinal data set, resulting in a final statistical population of549 valid responses.Overall, there were more IT respondents to the surveythan business respondents – only in Asia-Pacific is thesplit roughly equivalent. In the Americas and EMEA, ITis usually more represented. This does not impair theanalysis as the numbers are sufficiently high for both,but it could be in itself a first finding: could it be that ITprofessionals are more concerned about the “balanceissue” than their business counterparts?
2009 Survey on IT-business balance A word on the approach and the participants7
Americas (excl. USA) Asia - Pacific EMEA TotalBusiness respondents051 28% 31 54%075 24% 157 29%IT respondents 134 72% 26 46% 232 76% 392 71%Total number ofrespondents 185 57 307 549Geographic scopeWhereas in 2007 only Belgium participated in the Business Balance Survey, in 2008 the survey was expanded to 6EMEA countries and South Africa. This year, participants from 28 countries from all over the world were surveyed.The map below shows the variety of respondents in terms of country of origin.The share of answers of each country is indicated as a percentage of the total number. It should be noted that somecountries are somewhat over-represented – for instance Colombia in South America, and Belgium in Europe. On amore global scale, EMEA has clearly gathered a larger share, especially compared to Asia-Pacific. These differenceshave been taken into account when preparing the report, and comparisons should always be made cautiously.
IT Business balance survey 2009 map
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Europe 52,4%Belgium 14,2%Italy 8,7%Turkey 8,2%Canada 3,7%CGreoramtiaany64,,64%%Hungary 3,1%France 2,7%Bosnia and Herzegovina 2,4%Middle EastMexico andRomania 0,5%Central America 10,2%Serbia 0,7%Mexico 4,4% Luxembourg 0,5%Costa Rica 2,4% The Netherlands 0,4%Panama 1,4%Nicaragua 0,8%Cuba 0,2%AfricaSouth AfricaSouth America 19,8%Colombia 13,6%Argentina 5,6%Bolivia 0,2%Ecuador 0,2%Venezuela 0,2%
3,5%3,5%
Asia Pacific 10,4%Malasyia 5,5%Thailand 3,1%Singapore 1,8%
10%
24%
Size of organisationsParticipating companies per sizeThe pool of respondents reflects a good sample ofsmall, medium, large and very large organisations. The12%following chart shows the distribution of organisationsizes, expressed as the number of people who use the ITfacilities. Organisations from all sizes were represented7%in the survey.As expected, there is a clear relationship betweenthe size of the organisation and the size of its ITdepartment, as illustrated in the table below. As lastyear, some marginal “oddities” appear: some large or20%very large organisations with comparatively small ITdepartments and in one case an IT department as largeas the organisation as a whole. We believe these to bepossible errors.16%Small 0 - 50Small 51 - 100Medium 101 - 500Medium 501 - 1.000Large 1.001 5.000-Large 5.001 - 10.000Very large > 10.000
11%
Organisation sizeSmall Medium Large Very large1 -50 51 - 100 101 - 500 501 - 1000 1001 - 5000 5001 - 10000 >10000Small 1 -536% 28% 32% 4% 0% 0% 0% 100%6 - 109% 5% 36% 26% 21% 2% 1% 100%Medium 11 - 507% 4% 40% 27% 21% 1% 0% 100%51 - 1000% 13% 9% 15% 47% 13% 3% 100%Large 101 - 5000% 0% 8% 3% 32% 29% 28% 100%501 - 10000% 0% 0% 29% 21% 14% 36% 100%Very large > 10000% 0% 0% 3% 0% 0% 97% 100%
9Su200onrveysuniTIb-abalsesencwoAordthnpaeaorpahctdnheparticipants9
IndustriesResponses from a wide variety of industries were collected. The chart below shows thedistribution of industries participating in the survey. Industries surveyed included moreparticipants from the financial industry, manufacturing and consumer trade industries,with a combined total of 54.5% of the total number of participants. Again, this shouldbe considered when interpreting the overall results of the survey.
Participating companies per industry
Financial IndustryManufacturingConsumer tradeTechnologyLife Sciences / HealthcarePublic sectorTransportTelephonyEnergyOtherAutomotiveNot specifiedMediaReal EstateAviation
10
0%
5%
10%
15%
20%
25%
2009 Survey on IT-business balance
 A word on the approach and the participants
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