John Thorp, management consultant, author and leader of the "Val IT Initiative," has been saying it for 45 years: When it comes to IT governance, progress hinges on getting the right people to have the right conversation.

This paradigm is the basic objective of Val IT, an IT governance framework in book form released in April 2006 by the IT Governance Institute (ITGI). The manual details generally accepted principles for the definition, management, evaluation and selection of IT-enabled business investments, including benefit realization and delivery of value from those investments.

"Get them in the room -- the IT people and other stakeholders -- and make sure they don't leave the room until there is absolute clarity on what outcomes you want to achieve, what is the full scope of effort required to achieve the outcomes, who's accountable, what the metrics are to tell you are going in the right direction and how you're going to manage the process to realizing the outcome," Thorp said. "Val IT is intended to facilitate that conversation process."

The problem Thorp and others from the ITGI have found is that in many organizations, there is a chasm between IT investment and IT value. On average, 20 percent of IT expenditure is wasted each year, with annual losses of $600 billion worldwide, according to a 2002 Gartner publication. Without effective IT governance, organizations are finding their IT investments fail to create business value, and in some cases erode or destroy value.  

The problem lies in governance, Thorp said. Many organizations adopt what Thorp calls the "Star Trek school of management," where senior executives, like Star Trek's Capt. Jean-Luc Picard, give orders instead of using careful planning tactics.

"Executives say, 'Make it so' without themselves understanding what it is," Thorp said. "So everyone runs off and gets busy, so there's not clarity on what the outcome is."

But with successful IT governance, an organization can become a leader in its respective field, according to the ITGI, citing IBM's savings of more than $12 billion in two years by linking disparate pieces of its supply chain.  


COBIT Complement
Val IT was designed to complement the framework Control Objectives for Information and related Technology (COBIT), which provides managers, auditors and IT users with proven measures, indicators and best practices that help maximize the benefits of IT and develop appropriate IT governance. Indeed, Val IT focuses on investment decisions and the realization of benefits, while COBIT primarily concentrates on IT execution. Combined, these frameworks provide a wealth of information related to IT governance.

Val IT engages an organization's board, executives and other parts of the business, in partnership with IT, to ask four key questions: Are we doing the right things (alignment)? Are we doing them the right way (architecture)? Are we getting them done well (delivery)? Are we getting the benefits (value)? These questions, Thorp said, should form the foundation of a comprehensive governance framework that manages IT investments through their full economic life cycle.

"The bottom line is that we no longer invest in IT; we invest in business change investments that are enabled by IT," said Peter Harrison, consulting director at Fujitsu Consulting in Australia and a member of the Val IT Advisors Team. "So decisions are business decisions, not IT decisions."  

Harrison, who worked with Thorp on the Val IT initiative, outlines three main components of it:

• value governance: establishing the right structures, processes and leadership;
• investment management: managing investments as programs of business change and focusing on achieving business benefits; and
• portfolio management: picking the most successful candidates based on value.

Any organization can implement Val IT practices, Harrison said, because Val IT processes can be