A Review of three current publication on IT Governance

E. IrvingCHSB

30/8/13

Content• Information technology governance: an evaluation of the

theory-practice gap

• Information technology, an enabler in corporate governance

• Determinants of Effective Information Technology Governance

• Synthesis

• References

Information technology governance: an evaluation of the theory-practice gap - Ko & Fink

(2010)

• The purpose was to identify theoretical dimensions of IT governance; and to use them to examine IT governance practices

• Dimensions to IT governance; the structure-oriented view (emphasizes control and coordination); the process-oriented view (emphasized sustainable capability and continuity) and the people-oriented approach (issues leadership and impact on HR).

• The study used a qualitative approach - a multiple case design – of four universities to illustrate the practical approaches to IT governance.

Findings• Structure: A centralized approach to IT

governance was preferred

• Process: Externally developed guidelines were being utilized (e.g. ITIL, COBIT, ISO17799). The adaptation of performance measures (technical and or business) was needed.

• People: strong committed leadership and ‘buy in’ is necessary; also a better understanding of the role of IT management.

Information technology, an enabler in corporate governance - Elizabeth Abraham (2012)

• The purpose was to understand how information technology can be utilized as a driver of incentives in the decision-making process of corporate governance

• Weak CG, misplaced incentives, unethical behavior and greed are citied as causes of corporate scandals

• Agency – principal theory

• Shareholder theory

• Stakeholder theory

• A major criticism of stakeholder theory is the fiduciary responsibilities of mangers in exercising the right balance between the various stakeholders and those of the firm.

• The author advocates this approach notwithstanding the criticisms as a balance can be found.

• Executive incentives has been dominated by extrinsic rewards such as pay-performance and stock option. The rational is to align the interest of the agent with that of the principal but this is not always necessarily the case

• The normative approach of why people obey the law further supports the importance of intrinsic approach to motivation.

• The goal is to get people to obey the rules, regulations, laws.

• The author posits promoting an intrinsic value laden approach that taps into the intrinsic values of executives in promoting legitimacy.

“IT can empower executives to promote a participative and stakeholder welfare environment in the decision making of CG, where various stakeholders can be informed, participate to some level; and raise awareness of their best interests.”

Four major components to decision making:

• observation or the gathering of information;• memory or the storage of information;• computation or the manipulation of

information; • communication or the transmission of

information

Determinants of Effective Information Technology Governance Ferguson et al 2012

• IT has been considered an enabler of an organization's strategy,

• Now seen as integral part of a strategy in facilitating the exploitation of information-based competitive advantage to maximize benefits, capitalize on opportunities, and promote growth

• Agency theory

The Five determinants of effective IT governance

• IT steering committee

• Centralization of IT decision-making control

• Senior management involvement in IT

• Position of the IT function

• Corporate performance measurement system

Findings

• Survey of 80 (66 internal and 14 external auditors)

• The use of IT steering committees, the involvement of senior management in IT, and the use of corporate performance measurement systems can influence positively effective IT governance

• Empirical backing for the implementation of corporate performance measurements systems, such as balanced IT scorecards, as a mechanism for achieving higher levels of effective IT governance

Synthesis• different methods to gather and analyze data and

information collected

• theoretical and conceptual framework addressed was similar except that each focused on a specific theory

• Common threads: centralized IT governance, strategic use and alignment of IT/Business, CG theory, best practices

• It was interesting to note that research generally confirmed what the theory and literature concluded.

References

• Abraham, S. E. (2012). Information technology, an enabler in corporate governance. Corporate Governance, 12(3), 281-291.

• Ko, D., & Fink, D. (2010). Information technology

governance: an evaluation of the theory-practice gap. Corporate Governance, 10(5), 662-674.

• Ferguson, C., Green, P., Vaswani, R., & Wu, G. H.

(2012). Determinants of effective information technology governance. International Journal of Auditing. Vol.17 pages 75-99, March 2013