TABLE OF CONTENTS There is one more issue that I must get out of the way before I set out the value-adding CSFs. That issue can be summed up in the word governance . Just as effective transfer charging is an essential prerequisite to the success of a number of value-adding and cost-efficiency improvement practices, so they will not succeed without effective IT governance.
IT governance is a vogue and much bandied-about term with no clearly agreed definition or boundaries. I have heard it used in a wide variety of ways ranging from what I would call project direction and control, through financial direction and control to IT business management as a whole. For my purposes I am saying that it is about the relationship between the IT function and the business and how, specifically, the business manages and controls all its IT investments. Essentially I am saying that it is about establishing mechanisms to agree between the business and the IT function:
the IT function s funding levels in the context of business profitability and market/competitor trends;
the IT function s budgets for operating plan projects, discretionary projects (not identified in the operating plan), infrastructure projects/upgrades, enhancements (including work to develop feasibility studies), R&D/continuous performance improvement, and zero-based legacy infrastructure and systems support and maintenance;
the IT function s policies, strategic role (e.g. cost/investment/service/profit centre) and operating principles (consistent with fulfilling its agreed strategic role);
the IT function s competency development requirements (and/or strategic alliances to redress competency shortfalls);
