Taming Information Technology Risk
Information technology is redefining the competitive landscape for every major corporation. No matter what industry they are in, companies rely on IT for everything from squeezing costs to streamlining processes to leapfrogging competitors.
Unfortunately, rapid technological change has also created new risks — prompting many corporate directors to express concern over boards’ ability to provide adequate IT risk oversight.
An Oliver Wyman / National Association of Corporate Directors (NACD) survey of 204 corporate board members found that, while virtually all board members (99%) acknowledge that IT will have a significant business impact on the companies they govern over the next five years, more than half (51%) say they are not given enough information to perform their oversight duties effectively. Directors also cite insufficient IT expertise at the board level and the fast pace of technological change as stumbling blocks to effective IT governance.
There’s a lot at stake: The world's largest 500 companies lose more than $14 billion every year because of failed IT projects, according to an Oliver Wyman analysis. This report, Taming Information Technology Risk, introduces a framework for board members to use to help them evaluate four areas of IT-related risk:
- Competitive risk
- Portfolio risk
- Execution risk
- Service and security risk
Companies that receive valuable board direction and input on IT-related risk will have a significant competitive advantage over those that don’t. By using a common framework, board members will have a shared lens through which to assess their position and a solid platform from which to take actions that benefit the corporations and shareholders they serve.
About Oliver Wyman's Global Risk Center
The Global Risk Center is Oliver Wyman's research institute dedicated to analyzing increasingly complex risks that are reshaping industries, governments, and societies. Its mission is to assist decision makers to address these risks through research and insights that combines Oliver Wyman’s rigorous analytical approach to risk management with leading thinking from research partners.
About the National Association of Corporate Directors
With more than 10,000 members, the NACD is focused on creating more effective and efficient boards through director-led education and peer forums to share ideas and leading practices based on more than 30 years of primary research.
Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].
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Table of Contents
The IT Governance Dilemma
A New Framework
About Oliver Wyman