I attended the Butler Group IT Governance Master Class in Sydney today (9 March 2004) and was disappointed. It showed a real lack of innovation in IT Governance thinking.

The problem was that even though 'Business/IT Alignment' was cynically referred to as just as important and elusive as it always was – their entire analysis served to separate rather than align.

I think it starts with an often held assumption that the entire IT functional should be run as one big service. I know how popular and well intended this thinking is (it must 'serve' the business to it must be a 'service') but it simply isn't valid. Butler based much of their analyst on this assumption.

Business Transformation is a service. If that transformation is technology-enabled that is also a service. But once the IT is embedded in to the organisation it should be managed and costed as simply another part of the organisation's capabilities.

Take ERP. If an organisation requires an enterprise-level resource planning capability that capability should be managed and costed as such.

Just because an organisation's enterprise-level resource planning capability has been implemented in an ERP system doesn't mean that it should be considered an IT cost.
(I'm not defending ERP costs here by the way. In general, I think ERPs are evil.)

What is needed is a view of organisations which is capability based. With just as much attention paid to the IT features that make up the capability as there is to the non-IT resources that make up that capability.

Once this view of the organisation is established basic management principles can be applied. Those responsible for delivering true IT services (such as database, network, and file services) will have sufficient control over how those services are delivered to enable them to meet the business’s required service levels and costs (through appropriate use of leveraged services).

The Butler Master Class didn’t bring us any closer to that situation at all...

That said; the best comment was from a member of the audience: "We always say that the business should understand IT more. This isn't really true. We want the business to understand IT Management more."