Assessing the Level of Information Technology (It) Processes Performance and Capability Maturity in the Philippine Food, Beverage, and Tobacco (Fbt) Industry Using the Cobit Framework

Article excerpt

ABSTRACT

A grounded literature on how information technology (IT) processes are being managed is imperative in an industry with an increasing reliance on IT for its strategic and operational undertakings. This study seeks to provide a comprehensive assessment of the level of IT processes performance and capability maturity in the Philippine food, beverage, and tobacco (FBT) industry by applying the theory of benchmarking and the CobiT framework on IT governance. After administering the 167-item survey instrument to 22 publicly-listed companies in the FBT industry, represented by respondents composed largely of IT managers and administrators and subjecting the results to statistical tests and IT experts' validation, it was found out that the FBT industry currently has a maturity score of 2.05. At this maturity level, IT processes have developed to the stage where similar procedures are followed by different people undertaking the same task but there is no formal training of communication of standard procedures. To be able to evolve to the next immediate level where IT processes are standardized, documented, and communicated through training, companies in the FBT industry should bank on their key strength in the Acquire and Implement (AI) domain and improve on their weakness in the Monitor and Evaluate (ME) domain.

Keywords: Benchmarking; Capability; Domain; Governance; Maturity.

INTRODUCTION

The advent of information technology has significantly influenced and changed how businesses are being managed and monitored today (Hunton, Bryant & Bagranoff, 2004). It has brought both positive and negative impacts to the business world. As such, a term double-edged sword is often used to describe it.

To ensure smooth management of the new business set-up, the concept of corporate governance was redesigned to include information technology as a maj or part of it. New governance and internal control frameworks came up just for this concern to be addressed. This resulted to an increased awareness that IT governance is a maj or ingrethent in achieving every organization' s goal of value creation.

In spite of the availability of new governance and internal control frameworks, many organizations still compromised their going concern because of poor enterprise-wide governance. The collapse of Enron in 2002 and the recent 2009 Satyam scandal in India are among the proofs of this predicament. Much more alarming is that in 2008, Satyam was the winner of the coveted Golden Peacock Award for Corporate Governance under Risk Management and Compliance Issues. Because of this, the awareness for both corporate and IT governance must be heightened and taken more seriously.

THE STATE OF THE FBT INDUSTRY

Over the last few years, the global food, beverage and tobacco (FBT) industry group has exhibited modest growth, with growth particularly low in the tobacco and beverage markets. The industry group generated total revenues of $4,140.3 billion in 2005, this representing a compound annual growth rate (CAGR) of 2.9% for the five-year period spanning 2001-2005 (Datamonitor, 2006).

The leading revenue source for the global FBT industry group is the sale of food products, which generated total revenues of $2,634.3 billion in 2005, equivalent to 63.6% of the overall industry value. In comparison, beverage sales accounted for $1,035.4 billion in 2005, which represents 25% of the industry value. However, the increasing global population will drive demand up, while rising income levels in many economies allow increased spending on added-value processed, packaged, and luxury items in this category. The global consumption volumes of tobacco are steadily falling, as the health risks become more widely understood, although in some countries, such as India, volume growth remains positive (Datamonitor, 2006).

But looking forward, the global FBT industry group is expected to accelerate from its current value growth position. …