A Comparative Case Study of Three Korean Firms: Applying an IT Governance Framework

A Comparative Case Study of Three Korean Firms: Applying an IT Governance Framework

Junghoon Lee (Yonsei University, Korea), Jungwoo Lee (Yonsei University, Korea) and Ja Young Lee (Yonsei University, Korea)
DOI: 10.4018/978-1-60566-008-0.ch007
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Abstract

Research has recently begun to place greater emphasis on the strategic application of IT in seeking to integrate firms’ IT infrastructures and business processes, thus boosting companies’ business values. In this context, efforts have been made to formulate workable structures for companies’ IT governance (ITG); however, little practical research has considered the effect of different forms of ITG in a range of domestic and multinational companies. This study undertakes a comparative case study analysis of the ITG setups of three large service sector firms in Korea. This research work sought to identify the activities, types, and determinants of firms’ ITG decision making processes, and to suggest the basis on which forms of ITG may represent rational selections for given service companies. The study was based on in-depth interviews with representatives of three firms, analysis of in-house materials, and the application of multiple perspectives dealing with ITG domains. Case study analysis yielded a detailed picture of the characteristics of ITG related decision making within the firms, suggesting the validity of the proposed ITG framework. The proposed and partially validated ITG framework should be useful for further research and practice of ITG.
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Introduction

In an increasingly competitive global environment, information systems are becoming more and more critical, forcing firms to turn their attention to decision processes relating to information systems and information technologies (IS/IT). Further, as managers and stakeholders become aware of the potential uses of IT, an increasing number of companies are attempting to use IT as an important strategic tool in maximizing the value of firms’ resources and in delivering strategic goals (ACADYDA, 2002; ITGI, 2006; Patel, 2003). However, while firms have grasped the importance of IS/IT, many remain unsure which IT governance (ITG) structures and processes will enable them to get the most out of their considerable IT/IS expenditure (Posthumusa & Solms, 1995; Shleifer & Vishny, 1997; Van Grembergen, 2003). Companies face the challenge of having to proactively design structures and processes for the management of their information assets.

In this regard, ITG aims to strengthen firms’ control over their IT resources. ITG deals with risk management in IT investment, with the design of control and performance management systems, and with the strategic management of interactions between IS/IT and other business processes and functions (ITGI, 2000). ITG has emerged as a defined and urgent business problem concerning the demarcation of clear lines of responsibility and accountability in IS/IT management (Weill & Woodham, 2002).

Despite firms’ increasing awareness of ITG, however, very little academic literature addresses this emerging topic. Further, it is not simply possible to apply or cascade the characteristics of corporate governance onto ITG, as information resources have different features from other assets (Lee, Lee & Ahn, 2006). Studies found that, while acknowledging the importance of ITG, CIOs are still searching for a comprehensive and applicable ITG framework in which they can deliver ITG (Lim, Lee, Rah, Yoon & Lee, 2004). The framework would link ITG to other processes and specify appropriate channels for information, reporting, decision-making and control.

In characterizing ITG activities systematically, this chapter develops a comprehensive ITG framework through which it undertakes three case studies of service firms in Korea. In other words, this chapter offers a comparative case study applying a preliminarily identified ITG framework, exploring the following research questions:

  • 1.

    What are the major decision areas in ITG?

  • 2.

    What are the key mechanisms for ITG?

  • 3.

    How are ITG practices designed and implemented within firms?

The first two questions are partially answered by constructing an exploratory framework for ITG in Section 2 through a literature review and interviews with practitioners, and the third question is partially answered through a comparison of the three firms’ internal governance structures and processes related to IS/IT.

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Theoretical Background

As research and practice in the area of corporate governance precedes that in IS/IT, this section provides a brief overview of the literature on CG (Corporate Governance) and extends the review into IT governance topics.

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Table of Contents
Foreword
Wim Van Grembergen
Preface
Aileen Cater-Steel
Acknowledgment
Aileen Cater-Steel
Chapter 1
Sherrena Buckby, Peter Best, Jenny Stewart
This chapter introduces current and prior IT governance literature across five key focus areas being strategic alignment of business and IT systems... Sample PDF
The Current State of Information Technology Governance Literature
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Chapter 2
Junghoon Lee, Changjin Lee
Domestic and global companies are increasingly using information and communication technologies as a means of delivering their strategic visions and... Sample PDF
IT Governance-Based IT Strategy and Management: Literature Review and Future Research Directions
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Chapter 3
David Musson
This chapter reviews the IT governance literature. It proposes that there are three different concepts that are grouped together as IT governance.... Sample PDF
IT Governance: A Critical Review of the Literature
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Chapter 4
Jyotirmoyee Bhattacharjya, Vanessa Chang
This chapter introduces key IT governance concepts and industry standards and explores their adoption and implementation in the higher education... Sample PDF
Adoption and Implementation of IT Governance: Cases from Australian Higher Education
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Chapter 5
Lynne Gerke, Gail Ridley
This chapter examines the potential to use an audit program based on the Control Objectives for Information and related Technologies (CobiT)... Sample PDF
Tailoring CobiT for Public Sector IT Audit: An Australian Case Study
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Chapter 6
Tony C. Shan, Winnie W. Hua
This chapter defines a methodical approach, named Comprehensive Architecture Rationalization and Engineering (CARE), to effectively manage the... Sample PDF
Comprehensive Architecture Rationalization and Engineering
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Chapter 7
Junghoon Lee, Jungwoo Lee, Ja Young Lee
Research has recently begun to place greater emphasis on the strategic application of IT in seeking to integrate firms’ IT infrastructures and... Sample PDF
A Comparative Case Study of Three Korean Firms: Applying an IT Governance Framework
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Chapter 8
Breanna O’Donohue, Graeme Pye, Matthew J. Warren
This chapter focuses upon the Australian Standard for the Corporate Governance of Information and Communication Technology (ICT) AS8015 (Standards... Sample PDF
The Impact of ICT Governance within Australian Companies
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Chapter 9
Mark Toleman, Aileen Cater-Steel, Brian Kissell, Rob Chown, Michael Thompson
Acting upon the recommendations of a review of information and communications technology (ICT) governance and services at USQ, a major restructure... Sample PDF
Improving ICT Governance: A Radical Restructure Using CobiT and ITIL
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Chapter 10
Brian Cusack
Security is a subprocess that affects all processes within an organization structure. The control frameworks of CobiT and ITIL provide a mapping of... Sample PDF
Managing IT Security Relationships within Enterprise Control Frameworks
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Chapter 11
Michael A. Borth, Randy V. Bradley
This chapter discusses the overall importance of both corporate and IT governance, and demonstrates that IT governance is a very important... Sample PDF
Unexplored Linkages between Corporate Governance and IT Governance: An Evaluation and Call to Research
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Chapter 12
Alea Fairchild, Martin Smits, Piet Ribbers, Erik van Geel, Geert Snijder
This document summarizes the initial findings of the I-Fit research project that started in August 2006 as a joint activity of a regional ICT... Sample PDF
I-Fit: Optimizing the Fit between Business and IT
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Chapter 13
Tobias Kollmann, Matthias Häsel
This chapter articulates the knowledge and skills required by IT professionals in young Internet-based firms. Building on the general IT governance... Sample PDF
Competence of Information Technology Professionals in Internet-Based Ventures
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Chapter 14
G. Philip Rogers
This chapter assesses what role maturity models can play in enterprise IT governance. Frameworks that are well known in the IT industry, such as the... Sample PDF
The Role of Maturity Models in IT Governance: A Comparison of the Major Models and Their Potential Benefits to the Enterprise
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Chapter 15
Yael Dubinsky, Avi Yaeli, Yishai Feldman, Emmanuel Zarpas, Gil Nechushtai
Governance is the exercise of control and direction over a subject such as a society, an organization, processes, or artifacts, by using laws and... Sample PDF
Governance of Software Development: The Transition to Agile Scenario
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Chapter 16
Anne C. Rouse
This chapter considers the governance issues raised by the increasing use of external parties to supply IT resources (including packaged enterprise... Sample PDF
The Governance Implications When it is Outsourced
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Chapter 17
Muralidharan Ramakrishnan
This chapter is intended primarily for managers who are preparing to implement portfolio management concepts in an organization and students of IT... Sample PDF
IT Portfolio Management: A Pragmatic Approach to Implement IT Governance
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Chapter 18
Andrew Dowse, Edward Lewis
With the cost, complexity and risk associated with IT systems, the approach to IT governance and service management in many organizations is to... Sample PDF
Applying Organizational Theories to Realize Adaptive IT Governance and Service Management
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Chapter 19
Jon Iden
This chapter presents and analyzes a real life ITIL project, and it is based on a longitudinal case study. The purpose is to illustrate how the ITIL... Sample PDF
Implementing IT Service Management: Lessons Learned from a University IT Department
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Chapter 20
Neil McBride
This chapter describes a suggested model for developing a service strategy within IT services. It considers the context, the organization of IT... Sample PDF
A Model for IT Service Strategy
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Chapter 21
Manuel Mora, Ovsei Gelman, Rory O’Connor, Francisco Alvarez, Jorge Macías-Luévano
This chapter develops a descriptive-conceptual overview of the main models and standards of processes formulated in the systems engineering (SE)... Sample PDF
An Overview of Models and Standards of Processes in the SE, SwE, and IS Disciplines
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Chapter 22
Claus-Peter Praeg, Dieter Spath
This chapter introduces an IT-Service management framework for the use of quality management concepts in the context of the life cycle phases of... Sample PDF
Perspectives of IT-Service Quality Management: A Concept for Life Cycle Based Quality Management of IT-Services
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Chapter 23
Chee Ing Tiong, Aileen Cater-Steel, Wui-Gee Tan
This study reviews literature related to financial metrics that organizations could use in measuring the return on investment from their adoption of... Sample PDF
Measuring Return on Investment from Implementing ITIL: A Review of the Literature
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Chapter 24
Dirk Malzahn
This chapter describes how models for software development and service delivery can be integrated into a common approach to reach an integrated... Sample PDF
Integrated Product Life Cycle Management for Software: CMMI1, SPICE, and ISO/IEC 20000
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