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Budgets 'impede` IT governance

By Iain Scott, ITWeb group consulting editor
Johannesburg, 11 Jul 2005

CIOs are being forced to continue to deliver more business-focused solutions with less funding, and this may affect the effectiveness of implementing proper IT governance.

This is the view of Maiendra Moodley, technical security advisor in the business systems and technology department of the South African Reserve Bank, who was speaking at the BMI-TechKnowledge African Banking Forum in Midrand last week.

Moodley says the challenges facing CIOs in the banking industry relate to quality of service, decreasing budgets, increasing complexity of IT, changing business requirements, globalisation and organisational challenges.

He adds that IT operates in one of four spheres: commodity (if it can be obtained more cheaply, it will be); utility (a basic service taken for granted); partnership (more money is spent on enhancements and upgrades); and leadership (which carries more risk, since as the business becomes more dependent on IT, it will not put all its eggs in one basket until it knows it can be relied upon).

"Budgets reveal a company`s view of IT," Moodley says. "Some say they want IT to be a leader, but they give a budget that is more in line with a commodity."

Moodley says IT governance is a key differentiator between successful IT departments that are able to move beyond a commodity/utility to a partner/leadership role.

"This will become the 'final frontier` for many IT departments," he adds.

In the banking environment, with the emphasis on the second Basel capital accord, CIOs will be under pressure to implement suitable measures to manage risk and to implement sound IT governance.

However, Moodley says, if IT cannot be effectively managed, monitored, reviewed and audited, it should not be deployed.

"Outsourcing IT won`t resolve these risks or the need to ensure suitable IT governance either."

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