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A characteristic theme of IT governance discussions is that the IT capability can no longer be a Black Box . The traditional handling of IT management by board-level executives is that due to limited technical experience and IT complexity, key decisions are deferred to IT professionals. IT governance implies a system in which all stakeholders, including the board, internal customers and related areas such as finance, have the necessary input into the decision making process. This prevents a single stakeholder, typically IT, being blamed for poor decisions. It also prevents users from later complaining that the system does not behave or perform as expected: A board needs to understand the overall architecture of its company's IT applications portfolio ... The board must ensure that management knows what information resources are out there, what condition they are in, and what role they play in generating revenue... DEFINITIONS There are narrower and broader definitions of IT governance. Weill and Ross focus on "Specifying the decision rights and accountability framework to encourage desirable behaviour in the use of IT."Weill, P. & Ross, J. W., 2004, ''IT Governance: How Top Performers Manage IT Decision Rights for Superior Results', Harvard Business School Press, Boston. In contrast, the IT Governance Institute expands the definition to include underpinning mechanisms: "... the leadership and organisational structures and processes that ensure that the organisation’s IT sustains and extends the organisation’s strategies and objectives.' IT Governance Institute 2003, "Board Briefing on IT Governance, 2nd Edition". Retrieved January 18, 2006 from http://www.isaca.org/Content/ContentGroups/ITGI3/Resources1/Board_Briefing_on_IT_Governance/26904_Board_Briefing_final.pdf While AS8015 , the Australian Standard for Corporate Governance of ICT, defines Corporate Governance of ICT as "The system by which the current and future use of ICT is directed and controlled. It involves evaluating and directing the plans for the use of ICT to support the organisation and monitoring this use to achieve plans. It includes the strategy and policies for using ICT within an organisation." BACKGROUND The discipline of information technology Governance derives from Corporate Governance and deals primarily with the connection between business focus and IT Management of an Organization . It highlights the importance of IT related matters in contemporary organizations and states that strategic IT decisions should be owned by the corporate board, rather than by the Chief Information Officer or other IT managers. The primary goals for information technology governance are to (1) assure that the Investments in IT generate Business Value , and (2) mitigate the risks that are associated with IT. This can be done by implementing an Organizational Structure with well-defined roles for the responsibility of Information , Business Process es, Applications , Infrastructure , etc. Decision rights are a key concern of IT governance, being the primary topic of the book by that name by Weill and Ross.Weill P., Ross J., ''IT Governance: How Top Performers Manage IT for Superior Results'', Harvard Business School Press, 2004, ISBN 1-59139-253-5 According to Weill and Ross, depending on the size, business scope, and IT Maturity of an organization, either centralized, decentralized or federated models of responsibility for dealing with strategic IT matters are suggested. In this view, the well defined control of IT is the key to success. After the widely reported collapse of Enron in 2000, and the alleged problems within Arthur Andersen and WorldCom , the duties and responsibilities of the boards of directors for public and privately held corporations were questioned. As a response to this, and to attempt to prevent similar problems from happening again, the US Sarbanes-Oxley Act was written to stress the importance of business control and auditing. Sarbanes-Oxley and Basel-II in Europe have been catalysts for the development of the discipline of information technology governance since the early 2000s. However, the concerns of Sarbanes Oxley (in particular Section 404) have less to do with IT decision rights as discussed by Weill and Ross, and more to do with operational control processes such as Change Management . Following Corporate Collapses in Australia around the same time, working groups were established to develop standards for Corporate Governance. A series of Australian Standards for Corporate Governance were published in 2003, these were:
In 2005, AS8015 Corporate Governance of ICT was published. PROBLEMS WITH IT GOVERNANCE Nicholas Carr has emerged as a prominent critic of the idea that information technology confers strategic advantage.Carr, N. G. (2004). ''Does IT matter? : information technology and the corrosion of competitive advantage.'' Boston, Harvard Business School Press. ISBN 1-59139-444-9 This line of criticism might imply that significant attention to IT governance is not a worthwhile pursuit for senior corporate leadership. However, Carr also indicates counterbalancing concern for effective IT risk management. The manifestation of IT governance objectives through detailed process controls (e.g. in the context of project management) is a frequently controversial matter in large scale IT management. See Agile Methods . The difficulties in achieving a balance between financial transparency and cost-effective data capture in IT financial management (i.e., to enable chargeback) is a continual topic of discussion in the professional literatureOffice of Government Commerce (2001). ''Service Delivery: Capacity Management, Availability Management, Service Level Management, IT Service Continuity, Financial Management for IT Services and Customer Relationship Management.'' OGC, ITIL© Managing IT Services (IT Infrastructure Library). London, The Stationery Office. ISBN 0-11-330017-4, Remenyi, D., A. H. Money, et al. (2000). ''The effective measurement and management of IT costs and benefits.'' Computer weekly professional series. Oxford ; Boston, Butterworth-Heinemann. ISBN 0-7506-4420-6 and can be seen as a practical limitation to IT governance. RELATIONSHIP TO OTHER IT DISCIPLINES IT governance is supported by disciplines such as
FRAMEWORKS There are quite a few supporting mechanisms developed to guide the implementation of information technology governance. Some of them are:
Others include: Non-IT specific frameworks of use include:
INLINE REFERENCES SEE ALSO
OTHER REFERENCES
See also the bibliography sections of IT Portfolio Management and IT Service Management
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