can it really impact shareholder value? a cio perspective

Version 2 Copyright Evans Munyuki

IMPACT SHAREHOLDER VALUE?

Ask some of your team-members or friends to describetheir latest IT project or IT initiative in business terms, andyou will find that some folks will have to think twice asthey attempt to define their IT projects in non-technical business terms which focus on businessbenefits - terms which could spark the interest of anon-technical venture capitalist, a financier, stock investor,or a corporate shareholder of a non-IT holding.

This white paper seeks to bridge this gap between IT andBusiness. It is written for IT rainmakers who want toelevate their conversation to C-Suite Executive clients.

This white paper will also provide value to CIOs who seekto enter the boardroom, it will provide value to CIOs whoseek to demonstrate greater ‘business’ contribution in theboardroom, and will provide value to other C-SuiteExecutives who seek points-of-view on this topic.

The Golden Question

Since the Year 2000 Information Technology (IT) dot combubble burst31, IT has transformed from being theprescriber of business investment, to become a business-censored enabler, even reaching the point where somehave questioned whether IT matters at all as adifferentiator of company competitiveness in themarketplace1.

Along with this historical backdrop comes the goldenquestion which many are trying to put their fingers on:

This white paper discusses a key question which has become increasingly important tocompanies as business seeks to decide whether or not IT has a seat in the boardroom.

Evans MunyukiChief Information Officer (CIO) - Business & Technology Strategist

Table of Contents

Making the link between IT and Shareholder valueExamples of business benefits which IT projects should seek to provideRisk and RewardExamples - IBMA random walk?Conclusion

Can IT as anenabler reallyimpactshareholdervalue in aquantifiableandconvincingmanner?

In order to answer that question,we must answer two relatedquestions which are:

What are the drivers ofshareholder value?

What role can IT play to positivelyinfluence these drivers?

In other words, what levers canCIOs use to positivelyinfluence the link between ITinvestment and derivedshareholder value?

Our conclusion is that IT canimpact shareholder value, andCIOs have a key role to play in theboardroom as they leverage IT tohelp drive business results.

CAN IT AS AN ENABLER REALLY

The golden questionThe challenges with IT projectsDefinitions of shareholder valueIBM’s approach to Shareholder Value

IT - a real enabler of value?

Can IT as an enabler really impact shareholder value?THE CHALLENGE WITH IT PROJECTSHistory is filled with stories of IT projects which companies haveembarked on, using in-house IT resources, using outside vendors,or both.

However, the challenge continues to be, thequantification of the business value delivered bysuch initiatives.

Gartner estimates that two-thirds of all majortechnology investments do not achieve theirintended result2.

How can this be? When projects are initiated, do somecompanies not have clear IT investment objectives whichclearly link back to shareholder value?

Do some companies not have clearly documented businesscases to guide IT investment decisions and successfulcompletion criteria to help assess attainment of intendedresults?

In an argument which triggered a variety of responses,Nicholas Carr3 went as far as questioning whether IT evenmattered.

A further problem which arises with the challenge ofquantifying the business value delivered by IT projects isthat it becomes much easier to justify and fundthose projects whose business case easily links upwith metrics.

But this may not always be the right thing to do - there areother IT projects which are key in enabling thecorporation’s Business Strategy but whose benefit can bedifficult to measure.

Projects whose IT contribution can be tough to measureinclude those which address such areas as improvedcustomer satisfaction, improved margin, improved quality,improved customer acquisition, and sometimes, evenincreased speed to market.

Another key challenge with IT projects is that sometimesIT organisations are forced to expend a largeportion of their energy towards projects andinvestments which only help to “keep the lights on.”Such projects include fire-fighting projects, projects whichaddress key areas of system instability, poor systemperformance, or technology-refresh projects.

To add fuel to the fire, these “keep-the-lights-on” projectsend up consuming up a majority of IT budgets, making itdifficult to find funding for those projects which providecompetitive differentiation - especially those projects whichare conceived in the current (fully booked) financial year.

All this is before one starts asking such questions as : Howdo we make it easy for customers to do business with us?

What are our key customer dissatisfiers, and what keyprojects should we initiate to address them?

How long is it taking for us toget our products to marketand how do we compare toour competition?

What key projects are weinitiating to help enableproduct innovation?

Unless CIOs take a verydeliberate approach towardsthe end results they want todemonstrate, they can getsucked into ‘survival’ projectswhich won’t help them get farbeyond keeping-the-lights-on,thus not demonstratingmaximum contributiontowards shareholder value (asjudged by fellow businessexecutives).

A further interestingobservation is the following:

IT executives are the leastsatisfied folks in theexecutive suite19.

This is according to a surveyby career and recruiting firmExecuNet, which covered2,100 executives.

By closely linking IT projects toshareholder value, ITexecutives can demonstratekey business insight which willgive them equal weight andground with their fellow-business-executives.

It will help demonstrate thatIT’s mindset is more than just“cost center.”

This business insight will alsohelp in CIOs’ ability to crossover into business roles.

In this paper, we take the viewthat executive directors, CIOs,and managers are all leaderswho get work done throughother people. For that reason,we will use these titlesinterchangeably.


DEFINITIONS OF SHAREHOLDER VALUEOur view is that the Chief SalesOfficer (CSO) and ChiefInformation Officer (CIO) mustbe tied to the hip on the valueIT can bring to salesexecution, service delivery,and product delivery.

A= Annual earnings should be

up 25% or more in each of thelast three years. Annual returnon equity should be 17% ormore.

N= A company should havea new product or servicethat's fueling earnings growth.

S= Supply and demand. Sharesoutstanding can be large orsmall, but trading volumeshould be big as the stock priceincreases.

L= Leader or laggard? Buy theleading stock in a leadingindustry. A stock's Relative PriceStrength Rating should be 80 orhigher.

I= Institutional sponsorshipshould be increasing. Invest instocks showing increasingownership by mutual funds inrecent quarters - in other wordsstrong interest from fundmanagers. IBD's Accumulation/ Distribution Rating gaugesmutual fund activity in a stock.

M= The market indexes, theDow, S&P 500 and Nasdaq,should be in a confirmed uptrend since three out of fourstocks follow the market'soverall trend.

Let us agree on the definitions of shareholder value andbusiness value.

Shareholder value is defined5 as the value of thecompany minus the future claims (debts).

Some calculate this value as the Net Present Value of allfuture cashflows plus the value of the non-operating assetsof the company.

The IBM Institute of Business Value references businessvalue as the resolution of those issues which have thegreatest impact to the business. As such, The IBM Institutefor Business Value provides strategic insights andrecommendations that address critical business challengesand help clients capitalize on new opportunities6.

For publicly traded companies, some of the measures ofshareholder value include share price, dividend payout, andeconomic profit.

What are the drivers of shareholder value, and what rolecan IT play to positively influence these drivers?We will begin by assessing shareholder value from theperspective of a potential investor in a company’s stock.

Investor’s Business Daily7 (IBD) is a national Americanbusiness and financial daily newspaper that serves over800,000 investors worldwide through a variety ofproprietary products and services, relevant news from theinvestor’s perspective, as well as innovative research,investment education, stock ratings and online graphs.

IBD has a checklist for investors which outlines the sevencommon characteristics all great performing stocks havebefore they make their biggest gains. IBD calls this checklist:CAN SLIM®.

Using CAN- SLIM®, IBD promises investors to significantlyreduce their risk and increase returns through theirInvestment Research Tool which is a fact-basedperformance checklist to easily evaluate a stock before theybuy.

Lets look at what each letter stands for in CAN SLIM®:

C= Current earnings per shareshould be up 25% or more and inmany cases accelerating in recentquarters.

Quarterly sales should also be up25% or more or accelerating overprior quarters.

DRIVERS OF SHAREHOLDER VALUE?


Professor Laurence Booth8 of the Rotman School of Management at theUniversity of Toronto asserts the following key points on the drivers ofShareholder value.

Quarterly earnings are a key driver of shareholder value – a.k.a. stock marketvalues.

Economic Value Add - the market values companies that increase theproductive use of their assets by increasing turnover ratios, increasing profitmargins, and as a result increasing profitability.

a the value of intangibleassets is getting muchgreater as a proportion ofthe total value of a firm,and

b reputational risk is a keyelement of strategic riskthat cannot be hedgedaway24.

Case studies show examples ofcompanies which have beenexposed to reputational riskevents, some of whichrecovered, and others whichexperienced significantnegative shareholder impact25.

In reviewing those companieswhich recovered well, keydifferentiators were thefollowing virtues in themanagement team:

Honesty, Transparency,Personal involvement of theCEO in the major risk event,and Communication withstakeholders.

These traits clearlydemonstrated that they have afinancial value.

What does this mean in thecontext of shareholder value?

DRIVERS OF SHAREHOLDER VALUE IN YOUR COMPANY?

IBM’S APPROACH TO SHAREHOLDER VALUEEconomic Value Add (EVA) is the key creator of shareholder value. Thisis according to IBM.

To create Economic Value Add, you must do four things: 1) GrowSales, 2) Control Costs, 3) Enhance Your Risks Management and 4)Manage Your Assets.1. Grow SalesConsistent with IBD and Professor Laurence Booth, IBM emphasizessales growth as a key contributor to Economic Value. You must growsales9 by investing in opportunities which will give you superiorreturns.

Embark on new contracts and new projects which will result in salesgrowth. Clearly, IT has a key enablement role to play here.

2. Control CostsTo control your costs, you must increase your employee’sproductivity10, outsource low value and non-core areas of yourbusiness which other companies can do better andcheaper than you (IT, Business Process, ApplicationDevelopment, etc.).

Reduce your operating expenses, and optimize yourselling, general, and administrative costs.

Some managers may look at a partial view of costs.Learn to look at the full total-cost-of-ownershipwhich evaluates the overall life-span of your assets inorder to arrive at a holistic view of your true costbase.

3. Enhance your risk managementNow more so than ever before, managers need to enhance themanagement of the risk profiles of their organizations because there isa link between risk and shareholder value. In assessing the impact ofcatastrophe on shareholder value24, it is clear that reputational lossescan be affected by management, and they have an impact onshareholder value which can be positive or negative. The link is tightbecause,

What role is IT playing in enabling your management team to impact shareholder value as defined in theCAN SLIM® checklist?Even more importantly, what role can IT play, but is currently not playing, to driveshareholder value in your company?


DRIVERS OF SHAREHOLDER VALUEConclusions:

a Risk management cannot be ignored as it is a driver of shareholdervalue.

b It is important for managers to manage operational risk. However,that is not enough - reputational risk is a key area that managersmust also address as these risk areas are drivers of shareholdervalue.

Tied with that conclusion is the topic of compliance. Managers mustbe compliant. With international case studies of companies like Enron(USA), Worldcom (USA), Parmalat (Europe), and LeisureNet (Africa), itis clear that good ethics, good governance, and compliance withresultant regulation is very important to boards of directors, and theCIO as a board member must demonstrate the contribution hisorganization can bring to the table.

An interesting topic which directors are now discussing is the cost ofnon-compliance. Ironically, even the topic on the cost of compliancehas also come up.

Without digressing on this topic, we will make one key point:“Compliance is a marathon run over changing terrain. Thosewho win know how to conserve effort, reduce cost andposition their companies over the long haul”18.

Companies must establish a rock solid controls posture. Make businesscontrols a non-negotiable matter as demonstrated by your supportingprocesses, IT systems, and your management systems.

Further in this article, we will explore this topic a little more.

Clearly, IT has a role to play in the enforcement of systems andprocesses which ensure separation of duties, and compliance withregulation.

4. Manage Your Assets

To manage your assets, you musti sell underperforming assets,ii utilize idle or underutilized assets,iii manage your accounts receivables,iv optimize your resources, andv manage your inventory.

You must watch how long it is taking you to pay your debts, versus how longit is taking you to collect cash - including any interest debt you may beexposed to in the process.

IBM uses tools and methodologies which help customers address these keydrivers of Economic Value Add. And the good news is that, EconomicValue Add is the ultimate contributor to shareholder value.


DRIVERS OF SHAREHOLDER VALUESustainability

Sustainability means “development that meets the needs of thepresent without compromising the ability of future generations to meettheir own needs.”29

This concept of “sustainability” is derived from the term “sustainabledevelopment” which was covered in the Report of the WorldCommission on Environment and Development, 1987 (The “BrundtlandReport.”29

Quoting the King II Report, “In a corporate context, ‘sustainability’means that each enterprise must balance the need for long-termviability and prosperity - of the enterprise itself and the societies andenvironment upon which it relies for its ability to generate economicvalue - with the requirement for short-term competitiveness andfinancial gain. Compromising longer-term prospects purely for short-term benefit is counter-productive. A balance must be struck andfailure to do so will prove potentially irreparable, and have far-reaching consequences, both for the enterprise and the societies andenvironment within which it operates. Social, ethical and environmentmanagement practices provide a strong indicator of any company’sintent in this respect.”

Many companies are taking sustainability very seriously. For example,Wesbank (South Africa) publishes a sustainability report whichhighlights what the bank is doing around their focus areas inSustainability.

In addition to previous activity, in 2006, Standard Bank (South Africa)published a Sustainability and Black Economic Empowerment Report(sustainability report) which contains non-financial information as atboard approval date (6 March 2007) and financial information for theyear ended 31 December 2006.

A wide variety of companies have embraced sustainability andindeed publish sustainability reports together with their annualfinancial reports, or as separate documents - they include but are notlimited to the following: Santam (South Africa), Sanlam (South Africa),Eskom (South Africa), ABSA (South Africa), MTN (South Africa), IBM(USA), Microsoft (USA), Anglo American, Gold Fields (South Afrca), thelist goes on...

Sustainability is a key item on the Shareholder agenda, and IT has arole to play here.

In addition to several other sustainability initiatives, IBM has taken aleadership role in introducing tools that can help CIO’s contribution totheir organization’s sustainability. Examples: IBM’s server managementtools allow CIOs to reduce the power consumption of non-criticalservers at nights and on weekends. Another example is IBM’s greendata center initiative which will see high density computing systemsutilizing virtualization technology, along with IBM’s Cool Blue portfolioof energy efficient power and cooling technologies. These technologies,in conjunction with the energy efficient design and construction, willallow IBM to reduce its overall carbon footprint compared to standarddata centers, and lessen the impact to the environment30.


MAKING THE LINK BETWEENSHAREHOLDER VALUE AND IT

Can “well-run” IT projectsprovide CIOs theopportunity to controlcosts?

Yes - IT can indeed help youdrive down your cost basis.Emphasis must be placed onTotal Cost of Ownership, andthe role IT plays in helping thebusiness scale while keepingcosts in check.

Many companies have taken onprojects which have helpedthem automate processes andactivities resulting in reducedcost. These also include paper-eliminating projects,productivity-enhancing projects,and process-optimizing projects.

In addition, if you do notoptimize your IT environment,IT itself can become a holder ofcost reduction potential. Anexample is a situation where ITholds a farm of non-green,energy guzzling, inefficientservers. Optimization becomesnecessary because somecompanies have acquiredbusinesses with disparate ITsystems. Others may havedefined optimized IT strategiesonly later in the purchase cycle.Other companies may not havetaken the best approach tooptimize the environment anddrive out cost , which includeslooking at other parts of yourbusiness where cost-reductionbenefit may be had.

Now that we have identified the drivers of shareholdervalue, we need to understand the IT’s impact on thesedrivers.1. Does IT have a link to the drivers of shareholder value?

2. Can “well-run” IT projects empower CIOs with the abilityto impact growth of sales?

3. Can “well-run” IT projects provide CIOs the opportunityto control costs?

4. Can “well-run” IT projects empower CIOs with the abilityto better manage their assets?

Does IT have a link to the drivers of shareholdervalue?

Yes it does - IT has both a direct and an indirect impact onthe drivers of shareholder value .

We would like to even take thispoint of view further by stating thatIT can either have a disruptive or aconstructive impact on the driversof shareholder value.

Left in the hands of inexperiencedIT leaders, IT can indeed have adisruptive impact on the drivers of shareholder value. Allyou have to do is look at the number of projects whosedeployment did not go as planned, resulting in negativeproduct sales impact. As we all know, inhibition of sales isone of the paths to profit erosion.

Can “well-run” IT projects empower CIOs with theability to impact growth of sales?

The level of contribution which IT can make to yourcompany's top line will depend on which industry you arein, the level of dependence your company has on IT inorder to execute sales, supply, & demand processes andperform its core functions. It also depends on where yourcompany and industry are relative to the IT contributionmaturity curve.

We mostly use the word ‘IT’ tightly - in its real application, it isbroader: IT Resource domains, according to IBM, areInfrastructure, Applications, Data, Process, Organization(people & structure), Network, and Finance & Environment. Astrategic alignment and optimization of these domains iscritical because they make up the full equation of ITResources, and they can impact sales growth.

In March 2006, IBM released a report based on its worldwidecross-industry survey of more than 750 of the world's topCEOs and business leaders. Among the key findings of thissurvey, CEOs had moved their agenda from cost-cutting todriving profitable growth28.


In 2004, IBM released a report based on its worldwide cross-industry survey of 456 CEOs. Among the findings of thissurvey, 80 percent of CEOs surveyed believe revenue growthis now their top priority (though continued cost-containmentdiscipline remains important)27.

In the same report, CEOs rated competition and marketdynamics as very high and important external forces, while atthe same time placing immature and obsolete IT low on thelist of top 10 barriers to change. It is clear thatresponsiveness is a key issue for CEOs. For leadingcompanies, exploiting IT advances to detect critical businessevents earlier is a key initiative27.

When looking at costs, a key indicator to keep in mind is yourcompany’s IT-spend-as-a-percentage-of-revenue, comparedto your industry average. However caution must be exercisedas this comparison must be balanced with your company’spositioning in your industry (leader? Laggard?), your strategy(are you busy entering new markets, acquiring businesses,growing?)

It is also important to understand whether the majority ofyour IT spend funds expenditure which allows you “keep thelights on,” or whether it funds investment which drives newcapability and competitive differentiation of your company forthe marketplace.

Can well-run IT projects empower CIOs with theability to better manage their assets?

Yes - well-run IT projects can empower CIOs and their fellowdirectors with the ability to better manage their assets.

CIOs can do so with a variety of projects which enable thebusiness to better manage, better track, better utilize, andbetter optimize resources.

CIO’s management of assets also involves business continuityand resilience planning. Instead of accumulating disasterrecovery assets which lie idle with no productivity or utilizationvalue, CIOs can liquidate such assets and leverage sharedresource bases from suppliers in order to get a much betterreturn on assets.

However, the point made in the paragraph above should bevery closely tested with the type of business a CIO is in. Whatrecovery time objectives does such a business require? Doesit truly require shared or dedicated resources? Does it requirea hot managed service which would be ready to run in case ofan emergency? If a dedicated infrastructure is required, is itreally necessary for it to be a company owned asset or does itmake sense for this to be an asset which is provided by acompany that specializes in Business Continuity - a companywhich can procure the needed hardware at discounted cost?Do you require 100% dedicated infrastructure or are thereelements of the solution which can be shared? There is noone size solution which fits all companies - CIOs mustevaluate the needs of their business taking their risk profileinto account. CIOs have the opportunity to better managetheir assets resulting in increased shareholder value.

Tools & Methods

IBM has developedShareholder value tools whichare used to conduct enterpriselevel financial competitiveassessments and to translatemanagement actions to impactin shareholder value. Inaddition, IBM has purchasedlicences for a number ofshareholder value tools suchas Thomson ONE Banker, CBV,Bureau van Dijk and ReutersKnowledge11 which are usedby IBM Business Consultants inhelping clients based onfactual information.

Gartner has developed its 10Step guide to achieving theBusiness Value of IT12.

Gartner’s ten step guide13

includes acknowledging thatyou have a problem, gettingthe basics of IT measurementright (at the strategicalignment level, businessprocess impact level,architecture level, directpayback, and the business &technology risk level).Realizing that there are nomore IT projects - there arebusiness projects and as such,IT professionals must learnbusiness basics, and they mustuse language which isunderstood by C-levelexecutives. Building consistentframeworks of execution iskey, along with getting theright external helpers, askingthe right questions, having theright governance processes inplace, having clear decisioncheckpoints (knowing when tostop), and sticking with theprocess of continuousimprovement.


In order to drive a direct relationship and link between IT projects andbusiness results, one of the key concepts we expect see in themarketplace is concept of Risk/Reward partnerships.

This concept may very wellbreed a new approach to ITprovider selection focusing oncreation of greater value forclients.

ADVANTAGES OF RISK &REWARD PARTNERSHIPS

Client Perspective:1. Risk & Reward (R&R)Partnerships strengthen thelevel of relationship betweenIT consumer and IT provider.I.e. It becomes a truepartnership - not just boxdropping.

2. R & R Partnerships canEncourage an environmentof trust - a ‘we’re in thistogether’ attitude.

3. R & R Partnerships cansignificantly help clients toenjoy the benefits comingout of the recommendationsfrom consultants.

Look at the number ofbusinesses which pay top-dollarto consultants so the consultantscan give them businessrecommendations which theydon’t implement.

Why do some companies notuse the advice they so dearlypay for?

Is it really because somecompanies are lacking inexecution?

Or is it because customersactually need help implementingthe recommendations whichconsultants provide them with?

IT RISK AND REWARD PARTNERSHIPS

“A Risk-&-Reward partnership is a strategic partnership between avendor and a customer - where clients reduce or eliminate their capitalexpenditure for “qualifying” IT projects, and instead link their vendorpayment structures and the quantity of that payment reward to theactual business and technology benefits delivered by the successfulcompletion of such IT projects. This could be value gained at thecompletion of the project, or it could be ‘earned-value’ gained as theproject moves forward.”

Much has been said about the necessary migration from IT projectsto “Business” projects. We believe risk & reward partnerships areprobably the missing link in making this migration complete.

Some customers are starting to zone in to this area of opportunity inthe evolving courtship & marriage between business and IT.

While we don’t believe this approach will be appropriate for all ITprojects, we certainly believe that it will be applicable to high value,high risk projects.

Out of the capital expenditure which is approved by the board in theAGM (Annual General Meeting), many boards do not require theirexecutive directors to bring specific projects for approval atexecution time, however, IT is the exception.

Many boards require that sizeable IT investment projectscome for final approval before the contract is signed.

Why is this so? Because the board generally considers certain ITinvestments as risky, and they want to be convinced thatexpenditure is tied to business returns - returns which will impactshareholder value.

This is one of the reasons why we stronglybelieve the CIO must sit on the board - sothat she is directly linked with all businessimperatives, and is accountable to the boardfor the investments she signs off on.

With the above backdrop in mind, IT Risk &Reward projects are one of the key methodsthat CIOs are starting to use to link ITactivity with business results.

In the world of IT Service Providers, thisconcept will separate the wheat from thechaff. Under-capitalized, understaffed, andinexperienced IT Service Providers without a proven track record willfind it difficult to compete in this space.

A concept which is still relatively rare in the IT industry, yet one whichI would personally like to see more of, is the concept of IT Riskand Reward. The legal industry has used this concept for years.


and allow the provider torecover her scoping costs.

CONCLUSION ON IT RISK &REWARD PARTNERSHIPS

If IT Risk & RewardPartnerships are structuredproperly with a strategic viewin mind, we firmly believe thatthey can provide both clientand provider with anopportunity to win together.

To reach the finishing linesmiling together.

Thus enabling the CIO to goback into the boardroom withIT-influenced business resultswhich are welcomed by theboard of directors - resultswhich are welcomed by theshareholders - results whichwill enable the CIO to return tothe higher price delegationsand the point of authorizingnotable IT capital expenditurewithout always needing boardapproval.

Obviously, by leveraging ITRisk & Reward Partnerships,and by leveraging IT Financingsuch as that provided by IBMGlobal Financing, CIOs canavoid capital expenditurealtogether and turn ITinitiatives into anoperational expense.

IT RISK AND REWARD PARTNERSHIPSIs it possible that clients are so busy with day-to-day work activitiesthat they find it difficult to carve out resources, people, and time,which they can devote to the implementation of the consultant-recommended-ideas?

Risk reward partnerships can help bridge that gap. They canfacilitate an environment where companies can see the valuepromised by their IT visionaries.

4. R & R Partnerships facilitate the platform for the necessarycommitment to make the initiative a success.

5. R & R Partnerships directly align the interests of theshareholders (client), with those of the board, and with those of theIT Service Provider.

ADVANTAGES OF RISK & REWARD PARTNERSHIPS

Provider Perspective:1. With R & R Partnerships, top performance can mean toprevenue streams and repeat business.

2. R & R Partnerships directly align the interests of theshareholders (client), with those of the board (client), and with thoseof the IT Service Provider, thus helping the IT Service provider tovest his interests in a deeper understanding of what the client’sbusiness is all about, how the client makes money, and how he canplay a key role in bringing value as measured by Shareholder Value.

3. R & R Partnerships can help turn engagements with clients frombeing transactional to strategic enabling providers to gain valuefrom investment into a client’s business.

DISADVANTAGES OF RISK & REWARD PARTNERSHIPS:

Provider Perspective:1. Places heavier emphasis of sound business financials on serviceproviders (project capital expenditure), which could rule out feasibilityof engagement for emerging IT providers.

2. Can expose the provider to excessive financial risk with verylittle “skin in the game” from the client side. The client can prioritize“business-as-usual,” or prioritize “other projects” by devoting resources tothose, thus further increasing the risk of project failureand the financial impact which would primarily be bourneby the provider, and not the client.

3. Up-front agreement on the problem statement,boundaries, payment structures, and reward systems arecritical. As such, poorly scoped projects can posethreats of failure. Comprehensive upfront scopingbecomes a key activity which may very well have to be a“paid engagement” with contractual terms thatinclude exit clauses which allow the client to chooseto pursue the project at zero-scoping-cost,


OTHER RISKS WHICH THE CORPORATION MUST MANAGELinking information technology to shareholder valueThere are other risks which managers must manage. These includefinancial risk, legal risk, and overall project risk. In today’s world of tightcorporate governance, managers must assess their business as a wholeand leverage IT, process, and organization to ensure they have the rightbusiness controls posture in place to demonstrate an adequate level ofresponsibility to shareholders.

To this end, we will take a moment to explain a few of the keycompliance requirements which shareholders expect directors togovern, and for managers to manage. The key point is that, dependingon which industry a company is in, these are key regulatoryrequirements. As such, the IT organisation has a key role to playin enabling these regulatory requirements which are key onthe Shareholder’s Agenda.

Compliance is barely something to ignore. CIOs report that 8 to 10percent of their budgets are spent on compliance efforts18.

King II & King III

King II is the abbreviated name for the King Report on CorporateGovernance for South Africa published in 2002 in South Africa. Itfollowed a 1994 report commonly known as King I15. (At the time of thewriting of this white paper, a draft version of King III was about to besubmitted for Public Comment).

Companies listed on South Africa's JSE Securities Exchange have tocomply with King II which itself requires compliance with GlobalReporting Initiative guidelines. King II uses a comply-or-explainapproach whereas SOX uses a comply-or-else approach.

King II outlines requirements on corporate Governance covering thebroad spectrum of : Directors and their responsibilities, RiskManagement, Internal Audit, Integrated Sustainability Reporting,Accounting and Auditing, and Compliance & Enforcement16.

In the area of Risk Management, King II states that Risk assessmentshould address the company’s exposure to the following:

physical and operational risks; human resource risks; technicalrisks; business continuity and disaster recovery; credit andmarket risks; compliance risks.

UPDATE: King III was since released. King III uses an ‘apply-or-explainapproach. King III has taken a very strong stance on the Board’sresponsibility for the Governance of Information Technology, theintegration of IT Strategy with Business Strategy, appointment of an ITSteering Committee, appointment of a CIO by the CEO, Qualifications ofa CIO, monitoring and approvals of significant IT Investments,protection of intellectual capital contained in IT systems, compliance,the fact that IT should form an integral part of the company’s RiskManagement Committee, and the role of the Risk and Audit committeesin assisting IT carry out its responsibilities.

IT Relevance:

CIOs have a key role to play inhelping companies becomecompliant with various elements ofKing II. Of key note are the areas ofbusiness continuity and disasterrecovery, technical risk, andcompliance risk.

CIOs can help demonstrate anintegrated approach to goodgovernance in the interests of thewide range of companystakeholders.

King III is clear in its recognition ofIT as an integral part of businesstoday. Risk management andcompany strategy are areas nowaffected more than just financials.That means the profile compositionof company Boards of Directors (intheir mandate to drive companystrategy) can no longer just beAccountants. It now extends toroles which affect shareholder valuesuch as IT, Marketing, Sales, andRisk.


OTHER RISKS WHICH THE CORPORATION MUST MANAGELinking information technology to shareholder valueBasel II

Basel II17 is the second of the Basel Accords, which arerecommendations on banking laws and regulations issued by the BaselCommittee on Banking Supervision.

The purpose of Basel II is to create an international standardthat banking regulators can use when creating regulationsabout how much capital banks need to put aside to guardagainst the types of financial and operational risks banks face.

Such an international standard can help protect the internationalfinancial system from the types of problems that might arise should amajor bank or a series of banks collapse.

In practice, Basel II attempts to accomplish this by setting up rigorousrisk and capital management requirements designed to ensure that abank holds capital reserves appropriate to the risk the bank exposesitself to through its lending and investment practices.

Generally speaking, these rules mean that the greater risk to which thebank is exposed, the greater the amount of capital the bank needs tohold to safeguard its solvency and overall economic stability.

The final version (Basel II) aims at:

Ensuring that capital allocation is more risk sensitive;

Separating operational risk from credit risk, and quantifyingboth;

Attempting to align economic and regulatory capital moreclosely to reduce the scope for regulatory arbitrage.

While the final accord has largely addressed the regulatory arbitrageissue, there are still areas where regulatory capital requirements willdiverge from the economic.

Basel II has largely left unchanged the question of how to actuallydefine bank capital, which diverges from accounting equity in importantrespects. The Basel I definition, as modified up to the present, remainsin place.

IT Relevance

CIOs have a role to play in helping companies become compliant withBasel II. This is both from an systems compliance perspective, and alsoin establishing contingencies which help demonstrate significant (andreal) reduction in risk, which in turn reduces capital reservesrequirements, thus freeing up the capital for engagement in businessactivities which produce higher returns.


OTHER RISKS WHICH THE CORPORATION MUST MANAGELinking information technology to shareholder valueSarbanes Oxley

The Sarbanes-Oxley Act of 2002 (SOX) was designed principally to bolster pubicconfidence in corporate governance and financial reporting of public companies byrebuilding public trust in corporations and capital markets.34

Sarbanes Oxley largely affects American headquartered companies, companies whichdo business in the USA, or subsidiaries of such.

Impact of SOX on the corporate IT department32

The SEC identifies the COSO framework by name as a methodology for achievingcompliance. The COSO framework defines five areas, which when implemented, canhelp support the requirements as set forth in the Sarbanes-Oxley legislation. Thesefive areas and their impacts for the IT Department are as follows:

Risk Assessment. Before the necessary controls are implemented, IT managementmust assess and understand the areas of risk affecting the completeness and validityof the financial reports. They must examine how the company's systems are beingused and the current level and accuracy of existing documentation. The areas of riskdrive the definition of the other four components of the COSO framework.

Control Environment. An environment in which the employees take ownership forthe success of their projects will encourage them to escalate issues and concerns, andfeel that their time and efforts contribute to the success of the organization. This isthe foundation on which the IT organization will thrive. Employees should cross trainwith design, implementation, quality assurance and deployment teams to betterunderstand the entire technology lifecycle.

Control Activities. Design, implementation and quality assurance testing teamsshould be independent. ERP and CRM systems that collect data, but feed into manualspreadsheets are prone to human error. The organization will need to documentusage rules and create an audit trail for each system that contributes financialinformation. Further, written policies should define the specifications, businessrequirements and other documentation expected for each project.

Monitoring. Auditing processes and schedules should be developed to address thehigh-risk areas within the IT organization. IT personnel should perform frequentinternal audits. In addition, personnel from outside the IT organization shouldperform audits on a schedule that is appropriate to the level of risk. Managementshould clearly understand and be held responsible for the outcome of these audits.

Information and Communication. Without timely, accurate information, it will bedifficult for IT management to proactively identify and address areas of risk. They willbe unable to react to issues as they occur. IT management must demonstrate tocompany management an understanding of what needs to be done to comply withSarbanes-Oxley and how to get there.


IBM LINKS TO SHAREHOLDER VALUEIBM provides data driven

services that help youprioritize your critical dataand ensure the ongoingavailability of yourinfrastructure. These include

IBM high availabilityservices, and IBM datacontinuity services.

High availability services helpyou avoid downtime andrecovery costs by planning,creating and running aninfrastructure that supportscontinuous access tobusiness processes, ITenvironments and networks.

Data continuity services helpyou prioritize critical data inlight of regulatoryrequirements and businessneeds and implement aretention and retrieval planfor virtually anywhere,anytime information access

Enclosed below are the value proposition in some ofIBM’s offerings which help CIOs demonstrate greatercontribution to shareholder value in the boardroom.Through its key businesses, IBM provides a continuum of

value proposition enablers spanning the full range of IT: i.e.Software, Hardware, Services, and Financing. Thiscontinuum of value becomes clear as we explore some ofIBM’s offerings, and their links to shareholder value:

Risk Management - Business Continuity & ResilienceServices (BCRS)23

In today's interconnected world, virtually every aspect of acompany's operations is vulnerable to disruption. Socontinuity has become a concern that extends far beyond IT.And with the number of threats to business increasing, theworst-case scenario "insurance policy" approach to businesscontinuity has become woefully inadequate23.

But how do you determine the continuity and recoveryrequirements of your business? How do you identify andintegrate critical business and IT priorities into acomprehensive continuity program? How do you identify thegaps between what you have and what you need? Where doyou start?

IBM business continuity and resiliency services can help, fromplanning and design through implementation andmanagement.

IBM provides business driven services that help youdevelop a business continuity plan aligned to your risktolerance and geared toward your business needs. Theseinclude IBM business continuity services and IBM regulatorycompliance services.

Business continuity services help you identify and fill gaps inyour current continuity strategy with a robust continuityprogram aligned to business needs, budgets and bestpractices

Regulatory compliance services enable you to obtainobjective, industry-specific guidance about your compliancerisks while anticipating and responding to the changingregulatory landscape.

We have made significant investment into Disaster Recovery &Business continuity facilities which include data centerspace, work area recovery space, call center recovery space,dealer room space, and a host of redundant infrastructure.We understand regulatory compliance and the ways ourclients can leverage process, IT, people, data, applications,and business models in order to maximize compliance atcost levels which the business can tolerate.


IBM LINKS TO SHAREHOLDER VALUE

To complete the Risk Management picture from aninfrastructure perspective, IBM provides Event DrivenServices that help you address common gaps in yourdisaster plans so you can ensure that employees, processesand systems recover quickly.

These services are: IBM disaster recovery services, and IBMcrisis management services.

Disaster recovery services help clients address common gapsin disaster planning, with the goal of responding moreeffectively to a disruptive event and minimizing the costsand time associated with recovery.

Crisis management services help clients minimize the impactof unforeseen events, from the minor to the catastrophic,with crisis management services to support your employees,communications and infrastructure.

Business Continuity and ResilienceServices have an indirect link with the drivers of shareholdervalue. They help CIOs enhance their risk management andhelps them plan for business interruptions, which ifunmanaged could result in lost sales, lost revenue, andcould even strip a company of its key competitive assets.


IBM LINKS TO SHAREHOLDER VALUEBusiness TransformationOutsourcingWhereas Infrastructureoutsourcing focuses on ITsystems, BusinessTransformation Outsourcingfocuses on business processes.

According to IBM’s integratedoffering suite, these processesinclude:

1 Finance and Administration(F&A),

2 Customer RelationshipManagement (CRM)

3 Supply Chain Management(SCM) and Procurement

4 Human Resources (HR)

Within each process area, IBMoffers the following 3 BusinessProcess services:

Business ProcessOutsourcing (BPO) isprimarily an offshore ornearshore model with a highlabor arbitrage component. Itis effectively a lift-and-shiftapproach with minimal processtransformation with gains tobe had from a shared servicemodel, or leveraging IBM’smature methods - even if theservices are provided onsite22.

The business benefits of thismodel are: reducing a client'scosts and investment inbusiness processes whileimproving efficiency andcustomer satisfaction.

Some of IBM’s offerings, and how they link to shareholder

valueInfrastructure Outsourcing & Hosting Services20

Infrastructure outsourcing & hosting is the management ofyour applications and IT systems. IBM's outsourcingofferings scope includes desktop outsourcing, applicationsoutsourcing, data center outsourcing, managed hosting,managed storage, network outsourcing, outputmanagement, and workforce mobility services. Youstrategically partner with IBM to manage and operate yourapplications and IT systems, under an agreement whichbenefits both the client and IBM. The outsourcingagreement may include the transfer of IT employees and ITassets to IBM. IBM provides service level assurances tomake sure the client sees quality of service and can measureit20. IBM can imbed innovation and business transformationinto outsourcing deals, enabling customers to derive greatbenefit and value from engagements.

Infrastructure outsourcingServices have a direct link with the drivers of shareholdervalue. They help CIOs reduce IT costs, and helps thembetter manage their assets. Through access to greater poolsof skilled resources, CIOs can improve IT’s responsivenessto business request, and support faster speed to market fornew products and services. Often, for the same or lowercosts, customers can enjoy better services levels. Manyfirms are also outsourcing services to focus on their corebusiness and be more competitive which helps driveshareholder value.

Selective Managed ServicesUnlike traditional full-scope outsourcing deals, selectivemanaged services target specific IT services formanagement by an external provider, usually elements ofnon-core business functions. They are perfect forcompanies looking to outsource on a smaller scale21. Thesesmaller scope deals are perceived as less risky than thetraditional full-scope, mega deals. Companies don't have tohand over all their IT services to a single provider, and theycan retain control of those services they want to.

Managed Services have a directlink with the drivers of shareholder value. They help CIOsreduce IT costs, and helps them better manage their assets.Through access to greater pools of skilled resources, CIOscan improve IT’s responsiveness to business request,and support faster speed to market for new products andservices. For the same or lower costs, clients can enjoybetter services levels.


IBM LINKS TO SHAREHOLDER VALUE4. IBM Human Resources

outsourcing provides cost-effective, outsourced end-to-end human resourceadministrative services andemployee service delivery.

IBM can facilitate thetransformation for youremployee-to-companyexperience throughtechnology, such as the role-based portal and enhancedcall center, and processesincluding learning, payrolland benefits. Improvedemployee satisfaction andreduced turnover whilereducing service deliverycost in an integrated,intuitive delivery process isthe objective

Business Process Services (BPS) is the outsourcing andoptimization of specific solutions such as accounts receivableor mortgage processing. Highly automated process deliveryleads to standardized scale driven plays22.

Where a client can get maximum value is in the area ofBusiness Transformation Outsourcing (BTO). BTOdelivers improved business results through continuousstrategic change and the operation and transformation of theclient's business processes, applications and infrastructure –measured against business outcomes22.

Let us take a closer look at each of the four process areas:

1 - IBM Finance and Administration Outsourcingprovides enhanced decision support and processes, along withtransactional processing that uses our local and/or globaldelivery capability. Finance and Administration aretransformed using the collective innovation, world-class skills,and cost savings necessary to provide a flexible and scalablenetwork of people, applications and infrastructure to supportthe varying needs of organizations22.

2 - IBM Customer Relationship Management (CRM)Response rates. Cycle times. Order tracking. Integratedcustomer experiences. Customer care is increasingly a point ofdifferentiation for many organizations. While fundamentalindustry change is pressuring organizations to reduce costs,customers continue to expect responsive service and uniqueexperiences22.

Taking a holistic customer view, IBM Customer RelationshipManagement outsourcing focuses on more efficient businessoperations from providing design for the multi-channelcustomer contact process to improving agent productivity,from systems and data improvement to enabling the sales andmarketing organization. The resulting differentiated customercare can reduce costs through increased self-service whileincreasing revenue opportunities with improved cross-sell,up-sell, and customer retention. Our industry specific solutionsaddress specific customer care needs22.

3 - IBM Procurement outsourcing offers organizations avariety of outsourcing solutions, from customized "start fromscratch" solutions to multiple levels of Leveraged ProcurementServices - solutions that leverage intellectual capital andresult-driven experiences. This solution helps eliminate thepaperwork shuffle and enables streamlined processes todeliver efficient operations, savings and end-user satisfaction.For some organizations procurement spend can be as much as50% of annual revenue, having a significant impact on thebottom line. IBM can analyze procurement spend and leverageour global supplier relationships to improve strategic sourcing,reduce off-contract or maverick purchasing to leveragereduced prices at lower cost per order22.


IBM LINKS TO SHAREHOLDER VALUEIT is more than just a cost reduction target - it can bea revenue growth enabler, a risk mitigation enabler, aproductivity enabler, and a speed-to-market enabler.IBM understands IT, and with its IBM Global Financingoffering offers fresh ideas for financial solutions. The IBMGlobal Financing offering helps customers make smarterfinancial decisions: We can help you conserve cash, lower yourtotal cost of ownership, and support your overall financialobjectives33. While at this, we can provide solutionscustomized to your needs, while taking advantage of the factthat we have created a simpler financing experience fromacquisition through disposition.

Financing is more than just agreat way to acquire IT without a big upfront investment.As part of your overall IT management strategy, financingcan also help keep your technologies current, reduce costs,minimize risk, and preserve your ability to make flexibleequipment decisions throughout the entire technology lifecycle.

IBM offers a comprehensive solution - i.e design, build, runand finance the entire solution.


A RANDOM WALK DOWN WALL STREET?Is the walk down Wall Street a random walk? How shouldmanagers behave given the various market dynamicsimpacting the behaviour and results we see on the stockmarket?

In his modern classic on stock market investing, ‘A RandomWalk down Wall Street,’ Burton Malkiel14 contends that, thoughhistory has shown various examples where ‘the madness ofcrowds’ led to company over-valuation on the stock market, themarkets are efficient, and when we see inefficiencies occur incompany valuation, the market does make its duecorrections in due time resulting in proper recognitionof manager’s performance as custodians forshareholders.

We make this point to highlight one key point: Managers shouldstay true to their effort of leveraging IT as an enabler capable ofimpacting shareholder value.

Company share price will be exposed to various marketdynamics, some of which will be out of manager’s control andinfluence, however IT leaders must remain diligent attheir effort to demonstrate IT’s value in the boardroom,and their contribution to shareholder value.


KNOW YOUR BUSINESS - KNOW YOUR INDUSTRY!

In order to gain and keep their status as business executives(not just IT-focused-leaders), CIOs must become businessadvisors who understand how to leverage IT to bring businessvalue.

In order to gain a convincing executive presence and trust fromtheir business leading executive peers, CIOs must demonstratea strong understanding of their business’ industry, thecompetitive forces pressuring the business, customer demands,and the areas of inefficiencies in the business.

A good place to begin is the IBM CEO Study of 2008, and theIBM study which outlines the CIO implications from the CEOstudy.

We have compiled a list of questions which the CIO (and ITLeadership) should ask and know.

1 What sector is my business in?2 What industry is my business in?3 What business are we in?4 Who is our end customer?5 What are customers saying about our business?6 How do those comments compare with what our

competitors provide?7 If in the banking industry, do we have a single view of

the customer?8 If in a financial services group, is it easy for our banking

customers to buy insurance from us?9 If in the Fast Moving Consumer Goods industry, do we

have an optimized, efficient, cost controlled supply chain?10 Who are my internal-customers as CIO?11 Who are my external-customers?12 Who are my stakeholders - people who I normally don’t

interact with but stand to gain or lose from the servicesI provide?

13 What are all these people saying about the service whichmy organisation provides?

14 What matters to my customers?15 What is keeping my customer awake at night and what

can I do to make this pain go away?16 What is our positioning in the industry? Are we a leader

or a laggard?17 What is our business strategy?18 What is my CEO saying about our market positioning?19 What is my CEO saying about entrance into new markets?20 What are the industry trends and how will we respond

21 Do my executivepeers perceive me as “IT-only”or do they view me as abusiness peer who has theadvantage of understandingIT’s value proposition to ourbusiness?

22 What business driversdo I need to be aware of andwhat proposals am I makingto leverage IT in enabling thebusiness to respond to thesebusiness drivers?

23 What compliancepressures is my organisationexposed to?

24 What is the implicationof these compliance pressuresto my business?

25 What (if anything) dothe following mean to me?:Sarbanes Oxley, King II,Bassel II, PFMS, IFRS,National Credit Act, etc.

26 What risks have wegiven thought to, and whatare our plans to mitigate andrespond to those risks events?

27 What is our BusinessContinuity Managementposture?

28 In the event of abusiness interruption, do wehave clear plans to recover ourData Centers, clear plans torecover our Work Area andCall Centers at alternate,available, accessible sites?


KNOW YOUR BUSINESS - KNOW YOUR INDUSTRY!

29 Does every employee in the organisation know what todo in the event of a business interruption?

30 What kind of investments are we making into theprovision of Business Continuity Management ?

31 What kinds of returns are we getting for thoseinvestments?

32 Is that the best use of our shareholder’s monies or arethere smarter and less expensive ways to achieve thesame end result?

33 Who are my IT strategic partners - companies andindividuals who are committed to help me solve myproblems?

34 Do they have skin in the game?35 Have I taken the time to solicit the value proposition

from my IT vendors in order to form objective points-of-view on who my Strategic Partners are?

36 Are my IT vendor choices congruent and in alignmentwith my strategic partnership proclamations?

37 Have I taken the time to sit my strategic partners in oneroom to explain my company’s strategy?

38 Have I taken the time to make sure my strategicpartners understand what my mandates are?

39 Who (as demonstrated by their behavior, input, andresults) is losing sleep with me? Who has made it theirpersonal mission to make sure I am successful? To makesure my company gains competitive edge which will setus apart in our industry?

40 What is my contribution to my company’s ShareholderValue?

41 What am I doing to help grow sales?42 What am I doing to help better manage my

organisation’s assets?43 What am I doing to reduce total cost of ownership for

my corporations IT assets?44 When my managers prioritize projects, do they have

Shareholder Value in mind?45 When my managers prioritize projects, do they have a

clear view of what our customers are saying? What myCEO is saying? What my business executive peers aresaying?

46 Has my companybeen clear on what it doesbest and am I clear to myorganisation on our mandateto go and make this happen?

47 Do customers perceivemy company as being easy todo business with, and whatrole is my IT organisationplaying to better enable this?

48 Has my companysimplified its offerings, and amI playing a key role in reducingthe speed to market forbringing new offerings tomarket?

49 Am I close enough tothe voice of the customer?

50 What is my IT maturityand contribution to thebusiness relative to othercompanies in my industry?

51 What contribution amI making in helping simplifythe business? Simplifying ourprocesses, our applications,our architecture, ourinfrastructure, ourorganisational constructs, ourordering processes, our supplychain, our customerinterfaces?

52 What objectiveanalysis do we do at whatintervals in order to gain anobjective insight on thequestion above?


About the author:At the time of the initial writing of this white paper (2007), Evans Munyuki was the Go-to-market Executive forIBM’s Integrated Technology Services Business in South Africa. He was with IBM in South Africa and the USA forover 15 years.

(2010 Update) Evans Munyuki is the Group Chief Information Officer (CIO) at the Kelly Group, a Services Groupof companies with 11 Companies and 23,000+ employees. Evans is a Non-Exec Director on the IoD Board of Directorsin South Africa. He is a member of the Institute of Directors (IoD), and has held several business & managementcertifications including certification as an IoD Certified Director, an IBM Certified Executive Project Manager, andan IBM Certified ACT Consultant. Evans holds 3 degrees in Electronics Engineering, Project Management, BusinessAdministration, and a minor in Computer Information Systems. You can contact Evans at [email protected] or+27 (0) 83 288 4391.

CONCLUSION

We began this paper by asking “Can IT as an enabler reallyimpact shareholder value?”

Yes, IT can impact shareholder value. It is very importantfor business and technology leaders to understand and leverageIT as a lever to influence the drivers of shareholder value.

It is also important for IT leaders to know the types ofrisks that business is trying to manage, and for them tounderstand their role in the same.

A focus on affecting business results is how CIOs will be able todemonstrate that they deserve a seat in the boardroom, and forCIOs who already have it, this is how they will be able todemonstrate that they are true business executives, not justglorified techno geeks. :-)


1 http://www.nicholasgcarr.com/doesitmatter.html

2 http://www.gartner.com/press_releases/pr17feb2003a.html

3 http://www.nicholasgcarr.com/doesitmatter.html

4 http://www-128.ibm.com/developerworks/rational/library/2083.html

5 http://www.valuebasedmanagement.net/faq_shareholder_value.html

6 http://www-935.ibm.com/services/us/gbs/bus/html/solvingbusinessissues.html

7 http://www.investors.com/presscenter/pc10.asp

8 http://www.exinfm.com/pdffiles/value.pdf

9 Kees Klokman, Michael Zwiefler, IBM Global Technology Services EMEA

10 Kees Klokman, Michael Zwiefler, IBM Global Technology Services EMEA

11 http://w3-03.ibm.com/services/bcs/competency/client/value/tools.html



14 Reference a Random Walk Down Wallstreet

15 http://en.wikipedia.org/wiki/King_II

16 www. c l i f f e d e k k e r. c o m

17 http://en.wikipedia.org/wiki/Basel_ii

18 “10 Things you need to know about compliance.” An IBM Whitepaper; July 2007; Julie Gable

19 http://www.cio.com/article/123515/MIS_IT_Executives_Top_List_of_Managers_Dissatisfied_with_Their_Jobs

20 http://www-935.ibm.com/services/us/index.wss/itservice/so/a1000414?cm_re=masthead-_-itservices-_-outsourcing

21 http://w3-03.ibm.com/services/so/news/2005/20050912_package.html

22 http://w3-03.ibm.com/services/mbps/bto_main.html

23 http://www-935.ibm.com/services/us/index.wss/itservice/bcrs/a1000411?cm_re=masthead-_-itservices-_-buscont

24 "The Impact of Catastrophes on Shareholder Value." Fory F. Knight & Deborah J. Pretty. The Oxford Executive ResearchBriefings. www.templeton.ox.ac.uk

25 Reputation & Value, Dr Deborah J Pretty, Oxford Metrica, June 2001

26 Dr Deborah J Pretty, Oxford Metrica

27 http://www.gartner.com/DisplayDocument?doc_cd=119809

28 http://www-03.ibm.com/press/us/en/pressrelease/19289.wss

29 King Report on Corporate Governance for South Africa - 2002, Institute of Directors Publication

30 http://www.environmentalleader.com/2007/06/22/ibm-building-86-million-green-data-center/

31 http://en.wikipedia.org/wiki/Dot-com_bubble

32 http://en.wikipedia.org/wiki/Sarbanes_oxley#Impact_of_SOX_on_the_corporate_IT_department

33 www-03.ibm.com/financing/us/about/benefits/

34 http://www.foley.com/files/tbl_s31Publications/FileUpload137/2751/NDI_SOXPrivateCompanies_FINAL.pdf

can it really impact shareholder value? a cio perspective

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business case

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