WUCISA 2011 Presentation

ON IT GOVERNANCE STRUCTURES AND THEIR EFFECTIVENESS IN

COLLABORATIVE ORGANIZATIONAL STRUCTURES

Presented by: Jon Heales

Authors

Acklesh Prasad, Peter Green, and Jon Heales

WUCISA 2011 Presentation

Presentation Outline

Motivation

Research Objective

Theoretical Basis

Hypothesis

Research Design

Results

Contributions

Directions for Future Research

Limitations

Conclusion

WUCISA 2011 Presentation

Motivation

Key to business success today – bring disparate resources together and leverage the synergy between these resources

Organizations are forming new alliances using a shared IT-based platform

The result - Collaborative Organizations Structures (COS)

COS - alliances developed with IT resources as their backbone

The proliferation of web 2.0 tools – Enterprise 2.0

WUCISA 2011 Presentation

Motivation

IT governance for COS is important to sustain the collaborative alliance

IT Governance for COS – a move away from within-organization structures to across-organizations structures

Are current suggested IT governance structures suitable for COS?

Need for a different set of IT governance structures

IT governance structures of COS must be effective to ensure its sustainability

WUCISA 2011 Presentation

Research Question

“What type of IT governance structures are important for management of IT resources in COS and how do we ascertain the effectiveness of these IT governance structures?”

WUCISA 2011 Presentation

Our Conceptualization

IT Governance Structures for

Collaborative Alliance

Sustainable IT-Related Capabilities

Firm-Level Performance

Process Level Performance

WUCISA 2011 Presentation

Theoretical Basis

The dynamic capabilities approach

Understanding the synergy between IT governance capabilities in organizations

The resultant Dynamic IT governance structures

Dynamic structures – able to fit and respond to changing business environment – common for IT-backed collaborative structures like COS

Understanding the synergy between dynamic IT governance capabilities between COS alliance partners.

Result – IT governance structures for COS- a shared approach

WUCISA 2011 Presentation

Our Approach with Theory

Theory informs on the nature of the COS IT governance structures

But we need to understand on the makeup of these IT governance structures.

WUCISA 2011 Presentation

Research Design - Part 1

An interpretive approach to obtaining a deeper understanding of the makeup of IT governance structures for COS

Sourcing information from the key stakeholders of successful COS or related alliance structures

16 semi-structured interviews

Interpretation of interview transcripts

Result - key themes of IT governance structures for COS

WUCISA 2011 Presentation

Key Conceptualizations and Themes

Broad Conceptions Key Themes

Co-Created IT Steering Committee

Shared IT Governance, Shared Resource Ownership, Lateral Decision Making, Broader Adaptation of the IT Resource

Inter-Organizational Lateral Communication System

Extensive Partner Communication, Alliance-Based Communication, Leveraging the Web 2.0 Communication and Collaboration Tools,

Inter-Organizational Performance Management System

Broader Metrics for Evaluating Performance, Shared Alliance Responsibilities, IT-Based Alliance Evaluation

Co-Created Operational Systems Committee

Operational Coordination, Operational Alignment, Operational Consistency

WUCISA 2011 Presentation

Subsequent Research Model

Co-Created IT Steering Committee

Co-Created Operational Systems

Committee

Inter-Organizational Performance Measurement

Systems

Inter-Organizational Lateral

Communication System

Sustainable Top Management Commitment

Firm-Level Performance

Internal Process Performance

IT Governance Structures for COS

Sustainable Flexible IT Infrastructure

Sustainable Shared Organizational

Knowledge

H5

H4bH2

Customer Service

Improvement

WUCISA 2011 Presentation

Research Design – Stage 2

Survey Approach

Instrument Development and Testing

Online and Paper based survey

Contacts – parties to COS, retailer, logistics, payment facilitation

118 valid responses

Diagnostics showed no issues with data

WUCISA 2011 Presentation

Results – Measurement Properties

AVE CRA COR COSC CTSC UST FRMP ILCS IOPS1 PROP SFLX SSOK STMC

COSC0.646 0.757 0.845 0.804                  

CTSC0.808 0.882 0.926 0.626 0.899                

CUST0.755 0.839 0.902 0.519 0.595 0.869              

FRMP0.898 0.943 0.964 0.453 0.437 0.448 0.948            

ILCS0.697 0.784 0.874 0.121 0.100 0.149 0.241 0.835          

IOPS0.842 0.903 0.941 0.634 0.460 0.494 0.624 0.173 0.917        

PROP0.745 0.829 0.897 0.445 0.431 0.486 0.586 0.099 0.686 0.863      

SFLX0.727 0.811 0.888 0.404 0.368 0.392 0.359 0.288 0.377 0.548 0.853    

SSOK0.734 0.819 0.892 0.473 0.284 0.341 0.377 0.117 0.538 0.660 0.427 0.857  

STMC0.691 0.774 0.870 0.509 0.332 0.397 0.437 0.140 0.561 0.697 0.505 0.694 0.831

COSC – Co-Created IT Steering Committee, ILCS – Inter-organizational Lateral Communication Systems, IOPS – Inter-Organizational Performance Systems, COSC – Co-Created Operational Systems Committee, SSOK, Sustained Shared Organizational Knowledge, SFLX – Sustained Flexible IT Infrastructure, STMC –Sustained Top Management Commitment, CUST – Customer Service, PROP – Internal Process-Level Performance, FRMP – Firm-Level Performance, AVE – Average Variance Extracted, CRA – Cronbach’s Alpha, COR – Composite Reliability

WUCISA 2011 Presentation

Results – Structural Properties

Co-Created IT Steering

Committee

Co-Created Operational

Systems Committee

Inter-Organizational Performance Measurement

Systems

Inter-Organizational

Lateral Communication

System

Sustainable Top Management CommitmentR2 = 0.263

Firm-Level PerformanceR2 = 0.378

Internal Process

PerformanceR2 = 0.549

Sustainable Flexible IT

Infrastructure R2 = 0.208

Sustainable Shared

Organizational KnowledgeR2 = 0.216

0.221*0.465***

Customer Service

ImprovementR2 = 0.237

Co-Created IT

Governance R2 = 0.978

*p<0.05, **p<0.01, ***p<0.001

WUCISA 2011 Presentation

Discussion

IT-based alliances like COS require different IT governance structures

The decisions on IT has impact to all parties of the alliance

The suggested governance structures for COS are effective

They contribute to alliances key IT-related competencies, sustains their IT-related capabilities

This subsequently contributes to business value at the process and the firm level.

WUCISA 2011 Presentation

Contributions

Provides a way to govern IT resources that build the collaborate alliances

The governance effectiveness assessment approach will ensure sustainability of COS because there is a mechanism to evaluate the alliances IT-related decisions and efforts.

Effective IT governance structures are important for the today’s dynamic alliances

Motivates practice to take a holistic approach towards their IT-related decision making

WUCISA 2011 Presentation

Directions for future research

Focusing on specific parties of COS – payment providers, logistics may provide a deeper understanding

Nature of IT resources for COS

Organizational readiness for being part of COS

WUCISA 2011 Presentation

Research Limitations

A modest yet adequate dataset to test model

Including the demographics on the alliance partners could strengthen our understanding of IT resource utilization in COS

WUCISA 2011 Presentation

Conclusion

This study offers insights on the need for co-created IT governance structures to manage the IT resources with COS.

The proliferation of rich web 2.0 tools means organizations will increase their intensity of commitment into COS.

We envisage our effort will encourage other researchers add to this body of knowledge to ensure organizations are continually updated on ways to leverage their investment in the IT resources.

WUCISA 2011 Presentation

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