A More Perfect Union?

While Austin says that governance amounts to competent people making competent decisions, other factors also enter in. "A lot depends on the relationship between the CFO and the CIO, which often isn't what you'd call optimal," says Barbara Gomolski, a research director at Gartner. Adds Joshua Pickus, CEO of enterprise portfolio management software vendor Niku Corp.: "If I'm a CFO, then by definition I'm interested in cost control, and IT is going to hit me in the face because of the magnitude of the spend."

One way out, advises Gomolski, is to make sure that whatever form your company's IT-governance initiative takes, business units are included. As a CIO, she says she wouldn't want finance alone driving the IT portfolio. "All three entities — the CIO, the CFO, and the business units — need to be represented."

Fighting Fire with Fire
While it may sound like faulty logic, a growing number of software vendors say that one approach to IT governance is to buy more IT — namely, software designed to facilitate governance efforts. And they, along with their customers and market analysts, say the products work — if you're willing to do more than simply plug them in.

Kintana Inc. (newly acquired by Mercury Interactive Corp.) sells a suite of governance products for between $100,000 and $3 million, with an average implementation costing about $300,000. The software works in part by providing a variety of "IT dashboards" that allow different people to monitor IT projects. These views can be customized depending on job function, and the alerts — for example, timing or budget — can be adjusted to reflect what's most meaningful to the user.

Mike Carlson, director of business transformation and policy at Minneapolis-based Xcel Energy, says his company installed the software in the hope that "business-value assumptions [from IT projects] will [automatically] tie into the CFO's financial forecasts, enabling him to validate investment returns while also creating accountability back to the groups that built those assumptions."

Niku Corp. has sold governance software to some 180 companies, including Barclays Bank, Royal Caribbean Cruises, and Warner Bros. Prices vary depending on configuration, but a 100-user license starts at $90,000. "We're trying to provide one integrated system that will give the CIO — and, by extension, the CFO — insight and visibility into what's going on in IT," says CEO Joshua Pickus. "Where is this money being spent? Who's working on it? Where are various projects in their life cycle? And do these projects even matter anymore?"

But before you plunge in, remember that "the software can't succeed in and of itself," says Barbara Gomolski, a research director at Gartner. "These tools transform the way work gets done, so they work [only] if people are willing to invest the time in making the cultural and process changes to support them."

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