Management of Information Systems

- Session 9
Agenda

• Define IT Governance

• Role of IT Governance

• Discussion of Articles

• Concluding Thoughts
What is Governance?

• Effective governance addresses three questions:

• What decisions must be made?

• Who should make these decisions?

• How we will make and monitor these decisions?

What is IT Governance?

• Governance in the context of business enterprises is all about

making decisions that define expectations, grant authority, or
ensure performance.

• IT governance focuses on how decision rights can be

distributed differently to facilitate centralized, decentralized,
or hybrid modes of decision making.
What is IT Governance?

Specifying the decision rights and accountability framework

to encourage desirable behavior in the use of IT.

• What key decisions need to be made

• Who is responsible for making them
• How they are made
• The process and supporting structures for making them,
including monitoring adherence to the process and the
effectiveness of decisions
Some Facts

• Enterprises that actively design their top-level IT governance

arrangements make and implement better IT-related decisions.
Gartner

• Firms with focused strategies and above-average IT governance had

more than 20 percent higher profits than other firms following the
same strategies.
Peter Weill and Jeanne W. Ross, IT Governance

• Only 38 percent of executives/senior management can describe

their enterprise’s IT governance process. In most cases, IT
governance has not been designed; it has just developed
‘piecemeal’ in response to specific issues.

Peter Weill and Jeanne W. Ross, IT Governance

Key Governance Questions
Continually asking..

Are we Are we
Business doing getting
Governance the right the
of IT things? benefits?

IT Are we Are we
Governance doing them getting
of IT the right them done
way? well?

Source: The Information Paradox

How to Prepare Yourself Asking the Right Questions?
The IT Strategic Impact Grid

Source: “Information Technology and the Board of Directors,” by Nolan and McFarlan, Harvard Business Review, 2005
Six IT Decisions Your IT People Shouldn’t Make

Jeanne W. Ross and Peter Weill

 Strategy Decisions

How much should we Define IT’s role in the company

spend on IT? Decide how IT fits the company strategy
Determine the funding needed to achieve objective

Which business
Make clear decisions about what initiatives receive
processes should funds
receive our IT dollars? Prevents overloading the IT department

Which IT capabilities need

Determine which functions should be centralized
to be companywide?
Balance centralization and flexibility of business units
 Execution Decisions

How good do our IT Which features are needed based on costs and
services really need to be? Benefits
Prioritize service options

What security and Examine the trade-offs between security/privacy and

privacy risks will we convenience
accept? Find balance

Whom do we blame if an Assign an executive to be accountable for every IT

IT initiative fails? project
Monitor metrics to realize value of business systems
Major Categories of IT Decisions

• IT Principles

• IT Architecture

• IT Infrastructure Strategies

• Business Application Needs

• IT Investment and Prioritization

Concluding Thought

• Delivering the IT capability is not enough

• Value comes from how the business manages and uses IT
• This increasingly requires significant attention of top management
• Business engagement and accountability are essential
• Business/IT partnership
• Building effective IT governance in the organization
Making IT Decisions at Educational Institute

Clients
Students, Staff, Alumni, Prospective Students, Research Collaborators, Partners, Community,
Industry, Vendors/Suppliers

User Interface

Applications Face-to-Face Mobile

Portal Websites Publications Correspondence
Devices

Business Services

Security and Identity Management

Teaching Student Payroll
Research & Information
Support Support

Governance
Development Learning Staff Facilities Service
Support Management Management
Planning
Marketing &
Communication Public Financial Relationship
Procurement ICT Support
Relations Management Management

Data and Integration Layer

Client
Student Research Identity Learning Facilities
Relationship
Information Information Information Information Information
Information

Marketing Finance Staff Scholarly Procurement ICT Support

Information Information Information Information Information Information