IT Governance

IT Governance

Laurence Lock Lee (University of Sydney, Australia)
DOI: 10.4018/978-1-60566-084-4.ch002
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Abstract

In this chapter a selective review of current IT Governance practice is provided. The intent is to provide a context for future chapters rather than to act as a comprehensive review. Hence the review only covers the major developments. It starts by looking at the empirical research on IT Governance with the focus being on Weill and Ross (2004), who in research terms have written “the book” on IT Governance. This is followed be a review of the two most dominant public IT Governance guidelines and frameworks in COBIT and ITIL.
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Current State Of The Art

A good place to start in understanding IT Governance is with some definitions. As well as providing an assessment of the level of maturity in the area by the level of commonality found, it can also provide some insight into the context in which the author views this area.IT Governance is considered a subset of corporate governance. A basic definition of IT Governance is:

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 IT1

Weill & Ross, (2004, p8) offer:

Specifying the decision rights and accountability framework to encourage desirable behaviour in the use of IT

which provides more of a focus on the decision makers and their accountability to some pre-defined objectives.

A more detailed definition is provided by the IT Governance Institute through the public organisation ISACA, established over 40 years ago to support IT Governance professionals:

IT Governance is the responsibility of the board of directors and executive management. It is an integral part of enterprise governance and consists of leadership and organisational structures and processes that ensure that the organisation’s IT sustains and extends the organisation’s strategies and objectives.2

This more detailed definition extends beyond the “what” of IT Governance and begins to detail some of the “hows”. The definition reflects the auditing heritage of ISACA (Information Systems Audit and Control Association) and is consistent with the current views on corporate governance, especially in light of the Enron, Arthur Andersen and Worldcom collapses, that led to the establishment of a new compliance regime around the Sarbanes-Oxley Act in the USA.

The latter definitions infer a compliance approach with the establishment of defined processes, organisational structures and procedures as being the way to achieve effective IT Governance. How successful are such approaches? Do they guarantee business success if applied diligently? In the next section a review of empirical research linking IT Governance practices to business performance is provided.

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Best Practice Research

The book on IT Governance by Weill and Ross (2004) was the culmination of extensive research on linking IT Governance practices to business performance at the MIT Sloan School of Management Center for Information Systems Research (CISR). Their research involved over 300 enterprises in over 20 countries during the period of 1999-2003. It represents the most extensive research conducted to date on IT Governance and its effects on business performance.

In conducting their research Weill & Ross developed a number of frameworks to support their search for best practice IT Governance. The lack of a standard way of describing an IT Governance arrangement no doubt contributed to their finding that fewer than 50% of senior executives could accurately explain their IT Governance approach. To fill this gap, they developed a Governance Arrangement Matrix with the key IT decisions/activities (IT Principles, IT Architecture, IT Infrastructure Strategies, Business Application Needs, IT Investment) on one axis and typical arrangement archetypes that they had observed (Business Monarchy, IT Monarchy, Feudal, Federal, Duopoly, Anarchy) on the other. Using this framework they were able to classify the governance patterns of the different organisations they studied, and then draw inferences about which governance patterns were most associated with good business performance.

Complete Chapter List

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Table of Contents
Foreword
Leslie Willcocks
Acknowledgment
Chapter 1
Introduction  (pages 1-12)
Laurence Lock Lee
The information technology (IT) industry has a relatively short history in global markets but can put claim to a disproportionate number of... Sample PDF
Introduction
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Chapter 2
IT Governance  (pages 13-33)
Laurence Lock Lee
In this chapter a selective review of current IT Governance practice is provided. The intent is to provide a context for future chapters rather than... Sample PDF
IT Governance
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Chapter 3
Multisourcing Networks  (pages 34-53)
Laurence Lock Lee
So how did multisourcing networks come about? It is worth taking some time to trace the evolution in business that has brought us to this point of... Sample PDF
Multisourcing Networks
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Chapter 4
Laurence Lock Lee
J.B. Quinn’s influential book on The Intelligent Enterprise was published in 1992 and joined a small cadre of scholars and practitioners reacting to... Sample PDF
The Intelligent Enterprise
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Chapter 5
Laurence Lock Lee
This chapter is concerned with building up the concept of Corporate Social Capital (SC) as a critical firm resource in terms the governance of... Sample PDF
Corporate Social Capital and the Intelligent Enterprise
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Chapter 6
Laurence Lock Lee
Traditionally the competency of an IT worker has been largely measured in technical terms. The ability to understand and deploy complex technology... Sample PDF
Personal Network Competencies
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Chapter 7
Laurence Lock Lee
The growing interest in internal networks within organisations has been spawned by the apparent ineffectiveness of the traditional hierarchical... Sample PDF
Intra-Organizational Networks
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Chapter 8
Laurence Lock Lee
In this chapter a brief review of the IT industry networks is conducted followed by sections on a suite of novel research techniques that are... Sample PDF
Research Linking Corporate Social Capital and Performance in the IT Global Marketplace
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Chapter 9
ITIL and Value Networks  (pages 210-237)
Laurence Lock Lee
In this chapter a management framework designed by and for the IT function will be reviewed from a network’s perspective. ITIL (Information... Sample PDF
ITIL and Value Networks
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Chapter 10
Laurence Lock Lee
This chapter will initially take a closer look at the extent of networking in the global IT markets. Novel market research techniques are used to... Sample PDF
The Global IT Outsourcing Market: A Network Perspective
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Chapter 11
Laurence Lock Lee
In this chapter the impact of the technology trends implied by web 2.0 and beyond, on IT Governance and sourcing will be addressed. The remainder of... Sample PDF
Technology, Web 2.0 and Beyond
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Chapter 12
Laurence Lock Lee
It is argued that the intangible elements are growing in importance as the world’s economies become increasingly interdependent. Therefore the time... Sample PDF
Guidelines for IT Governance and Multisourcing in the Networked Economy
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Chapter 13
Research Methology  (pages 315-348)
Laurence Lock Lee
This appendix provides a detailed description of the methods, analytical techniques and data sources used to address the two research questions, and... Sample PDF
Research Methology
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About the Author