The Impact of ICT Governance within Australian Companies

The Impact of ICT Governance within Australian Companies

Breanna O’Donohue (Deakin University, Australia), Graeme Pye (Deakin University, Australia) and Matthew J. Warren (Deakin University, Australia)
DOI: 10.4018/978-1-60566-008-0.ch008
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This chapter focuses upon the Australian Standard for the Corporate Governance of Information and Communication Technology (ICT) AS8015 (Standards Australia, 2005) and presents research findings that can be applied as recommendations to enhance the effective implementation of this Standard’s principles within an organization. These recommendations relating to the principles outlined within the Standard concern such factors as, identifying and addressing issues surrounding the implementation of this Standard and the actions that could be undertaken to improve the effectiveness of ICT governance by sharply focusing upon the governance aspects of ICT within business, as opposed to the management aspect of ICT.
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This research investigates and identifies the organizational issues that surround the implementation of organizational governance of ICT, both within the business and in support of business strategies and goals, however before proceeding it is important to note that the terms “ICT governance” and “IT governance” are used interchangeably throughout this chapter, depending on the source being cited. Nevertheless, before investigating the issues that impact on organizational ICT governance, we must establish its genesis in relation to corporate governance and development as an associated governance discipline that is coming under greater focus due to recent public failures that have brought into sharp focus the issues of organizational governance and accountability.

Corporate governance is defined by the Organisation for Economic Cooperation and Development (OECD) as an activity which “involves a set of relationships between a company’s management, its board, its shareholders and other stakeholders” (OECD, 2004), these recommendations were published in the OECD Principles of Corporate Governance (2004). These principles represent a common point of understanding between representative member countries and promote acceptable practices that assist business organizations to deliver transparent and informative reporting to shareholders and ensure boards of management are accountable for their actions (Witherell, 2004). The Australia Standard entitled Good Governance Principles AS8000 (2003) is heavily based on the OECD principles of corporate governance and reflects the Australian perspective of corporate governance as concerned with conduct and relationships between company stakeholders (Standards Australia, 2003).

In relation to corporate governance, IT governance is a subset defined as “specifying the decision rights and accountability framework to encourage desirable behaviour in using IT” (Weill & Ross, 2004) and therefore, IT governance focuses on the governance of IT use within the particular organization. Van Grembergen (2004) further links IT governance to corporate governance by indicating that today’s business and business strategies are now dependent to some extent on an underlaying IT infrastructure support. Therefore, corporate governance is responsible for setting high-level organizational strategies and controls, while IT governance provides the information and IT structure to facilitate strategic alignment and support of organizational goals. Furthermore, the linkage of IT governance and corporate governance is more apparent because of the increasing dependence upon and utilisation of IT to support business operations, which can potentially expose and impinge adversely upon the critical functionality of the IT infrastructure supporting the business. This suggests that poor application of IT governance can affect corporate governance through loss of business, harm to corporate reputation and a weakening of competitive position (CPA, 2005).

This premise is supported by KPMG (2002) who found that IT failures accounted for 60% of all business interruptions in Australia, resulting in downtime, reduced income and loss of customers. There have also been a number of other cases in Australia and around the world where a lack of IT governance has resulted in significant financial losses. A further example is the widely reported situation at the National Australia Bank (NAB), here it found that employees were able to request changes to the IT systems that enabled them to erase records of their transactions and resulted in notable financial losses for the bank (Mair, 2004). In response to this and other failures of IT governance, a new Australian Standard within the AS8000 series, namely the Corporate Governance of ICT AS8015 (Standards Australia, 2005) was developed and released in early 2005. This standard consists of six principles applicable to the governance of ICT within a business organization and forms the initial reference point of this research.

Complete Chapter List

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Table of Contents
Wim Van Grembergen
Aileen Cater-Steel
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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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