Sound financial management is a fundamental element of good corporate governance. Put crudely, if an organization is not in control of its finances, it is significantly more likely to be spending more and/or receiving less income than necessary. Financial governance incorporates controls such as:

• High quality (complete, accurate, up-to-date) financial and other management information, implying good accounting systems and high quality data feeds from other systems;
• Managers competent at financial management, and with sufficient time and energy to do it well;
• Controlled processes for effective financial planning, monitoring and active financial management.

In the case of Information Technology, financial governance includes overall financial management of the IT department and its business partners (e.g. internal and external customers; service, software and hardware suppliers), as well as detailed financial management of IT development projects, operational systems and services, including information security management. 

IT governance is a vital part of corporate governance in today’s information economy. Since corporate governance is increasingly subject to legislative requirements such as Sarbanes-Oxley, there are often legal obligations to implement an effective IT governance framework (although it is curious that so few organization appreciate this). It seems to us that IT governance is more than simply a compliance issue: good governance supports the business objectives.

We can help you review your IT costs and benefits using a financial audit-type approach. We have particular expertise in the financial control of development projects. We have helped clients prepare or review cost-benefit cases and implement the associated financial control systems and processes to manage project finances proactively on an ongoing basis. We are convinced that the business case for a development should be a ‘living document’ - not just something that is knocked together to justify to management the initial capital investment but a tool to guide the organization at least up to the point of implementation. 

If the business case is periodically reviewed during the project, management have the opportunity to update the initial financial assumptions (costs and benefits) to reflect their ever-improving knowledge. At the point the system goes live, the updated business case should therefore include a ready-made set of management metrics describing how the business intends to recoup the development costs and improve the business going forward. With our approach, the organization is more likely to identify and deal quickly with a development project whose costs escalate, and to obtain additional value from the system over the full lifecycle. Our approach highlights the need to plan and manage the organizational changes associated with an IT system implementation.

Contact IsecT to find out how to measure and maximise the business benefits from your IT investments. 

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