The Relationship between Information Technology Governance and Information Technology Performance in Taiwanese Financial Enterprises

The Relationship between Information Technology Governance and Information Technology Performance in Taiwanese Financial Enterprises

Ruey-Shiang Shaw (Tamkang University, Taiwan), Che-Pin Cheng (Taipei Chengshih University of Science and Technology, Taiwan), Ta-Yu Fu (Tamkang University, Taiwan), Chia-Wen Tsai (Ming Chuan University, Taiwan) and Dong-Cheng Yen (Tamkang University, Taiwan)
DOI: 10.4018/978-1-5225-0196-1.ch089
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Abstract

More and more enterprises regard Information Technology (IT) as their most valuable property and make full use of IT to maximize the performance of their business operations. As a result, enterprises are attaching more importance to coordinating their IT strategy and enterprise strategy in order to get the most from their IT investment. For the sake of better IT performance and long-term development, firms must adopt a complete strategy for IT governance. In Taiwan, most financial enterprises have not considered IT governance to be a necessity, and those which are implementing IT governance have difficulty explaining, systemically, how it affects IT performance. Based on the five dimensions of IT governance, this study uses the balanced scorecard to measure IT performance and discusses the influence of effective governance on IT performance. The results show that the five dimensions of IT governance (strategic alignment, value delivery, risk management, resource management, and performance measurement) are all positively correlated with IT performance. The results of this study can help Taiwan's financial enterprises set the proper course for IT governance and more clearly understand how it serves to improve IT performance.
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Literature Review

Governance

Santioso (2001) held that the definition of governance emphasizes economic management. However, the United Nations Development Programme (UNDP) considers sustainable development to be the major premise of governance (Johnson, 1997). Prakash and Hart (1999) proposed that governance is an organizing collective action, the scope of which comprises issues of structure (observing the forming process of relative decisions), control (using power to make every decision suitable for the structure) and process (concrete procedures of control and regulation).

Corporate Governance

The Organization for Economic Co-operation and Development (OECD) (2004) defined corporate governance as the system by which companies are directed and controlled. The framework of corporate governance should drive the market to be transparent and effective, build consistent laws, and indicate clearly the division of responsibilities between the supervising, monitoring and implementation units.

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