HBR Article: IT & Board

The Harvard Business Review published a most interesting article in October 2005; a response to it led me to track down the original. By Richard Nolan and F. Warren McFarlan, it's entitled "Information Technology and the Board of Directors." (Paid access required.)

Interesting passage, quite in sync with what this blog has been saying for 2.5 years:

"A board needs to understand the overall architecture of its company's IT applications portfolio ... Physical IT assets ... are relatively easy to inventory; intangible assets are not. Despite the fact that intangible assets have largely been ignored by the accounting field, most companies are increasingly reliant on them. Companies have huge investments in applications software, ranging from customer and HR databases to integrated supply chains. The board must ensure that management knows what information resources are out there, what condition they are in, and what role they play in generating revenue... the IT organization [must sort] the wheat from the chaff by determining the number and location of aging and legacy programs, and then decide which should be upgraded or maintained."

Maybe if a couple of Harvard professors say it ...

However, another thing they say is more problematic: "To date, there have been no standards for IT governance."  As with issues raised last week, I have to again disagree: we do have ITIL and COBIT, which at least deserved a mention. The ISACA president Everett C. Johnson feels the same way, as his rebuttal to Norton and McFarlan was published in the February 2006 Harvard Business Review: "Norton and McFarlan should have mentioned that there is a widely accepted international framework for IT governance...COBIT."

Norton and McFarlan did not disagree.

-Charlie