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IT Governance- Problems and Advantages

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Abstract

Information technology popularly abbreviated as IT plays an integral role in the day to day running of business and organizations operations. IT is known to improve the performance of businesses at firm level. Studies show that governance is applied to IT investments, changing projects and ensuring effective service delivery (Gonzalez-Meza & Weill, 2004). Governance is meant to compliment the systems of IT so that they can offer the management tool to overcome the persistent problems of IT. Good IT governance ensures value is added to a company’s products and services and that competency is enhanced, weak governance on the other hand leads to lack of flexibility in a company or business.

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The role of IT cannot be overlooked in companies and industries which want to be successful especially with the inception of technological advancements.

Introduction

Governance in IT can be used to describe the process for deciding how money is allocated and spend (Weill, & Ross, 2005). Investments need concrete and solid strategies of money spending to avoid misappropriation of business funds.

IT governance ensures the proper prioritization and accountability of such monies. Studies show that “90% of money related challenges in most businesses are as a result of poor management and lack of prioritization of funds” (Tallon & Kraemer, p2). Below is a graphical representation of the above statement:

Key

                                                                            1-Problems related to weak IT governance

                                                                            2-Advantages due to weak IT governance

In this light, IT governance goes a step further to ensure that spending of monies is not only justified but it is also spend in regard to authorization levels of the business in question.

According to Tallon & Kraemer, IT has been involved in management of different businesses to ensure that necessary changes are employed in the expenditure of business (2004). IT has been used to describe project management and control of businesses. For example, it is used to guide the management and control of projects so that a significant level of “justified” spending of monies in businesses is encouraged. Hence, it can be argued that IT governance helps align problem solving criteria’s so that they can be aligned to business needs. IT governance

Technology has played an integral role in the development and enhancement of IT governance (Tallon & Kraemer, 2004). For example, technology has allowed it to be easy for mangers to be able to authenticate the returns they get from IT investment. For example, some of the tools of technological advancements used in IT include servers and PCs to mention a few. IT governance ensures that business managers venture into how IT resources in the business enhance competence and capabilities in a business.

“There are various capabilities which come with IT governance. One such capability if flexibility capability which is based on connectivity, modular design and compatibility. Flexibility in IT governance is also responsible for the ability of supporting business strategy during periods of intense change.”

                     (Gonzalez-Meza & Weill, 2004).

This study also found out that there are various challenges which come with the application of IT governance.  There are businesses which are able to apply governance flexibility easily while others are not able to apply it. Studies show that businesses with weak IT governance structures are about pleasing business manager and also have higher levels of inflexibility (Weill et. al, 2004). The businesses which had strong IT governance on the other hand, have policies and procedures geared towards finding a balance between local autonomy and global flexibility (Gonzalez-Meza & Weill, 2004). All in all problems of flexibility and inflexibility show the problems and challenges which may be stemming from the IT governance. IT governance IT governance application is not an easy concept to apply and may sometimes require manager to apply tough decisions which may cause friction within business managers but at the end of it expose major competencies with the business. Heads of businesses and other corporate bodies should communicate needs of their businesses to their business managers and other juniors so that the goals of businesses are achieved.

With the various technological advancements, it is important that businesses and companies are able to employ technology for their success which is also a core ingredient in IT governance (Weill et. al, 2004). Good IT governance should not just be applicable to corporate leadership but all the stakeholders of a business or company in ensuring that the IT structure meets the obligations of the business. This study also asserts that the application of IT governance is not an easy concept. In this light there is need for business managers and their CEOs to adapt IT structures which help to build more adaptive organization. For example, management’s of businesses should be able to understand the mission and vision of the business or organization they are heading. By business managements understanding where they are going it will be easier for the businesses to be able to understand how IT can help the business to achieve its goals and objectives. Studies show that, successful implementation of IT governance goes hand in hand in comprehending and finding out about various business challenges (Gonzalez-Meza & Weill, 2004). Most of the challenges that organizations and businesses face during IT governance are solely responsible for causing inflexibility which stands in the way of businesses achieving its set goals and objectives. On the other hand, when coming up with a viable IT strategy it is imperative that business managers are able to understand their managers and how the business works so that IT governance measures can be put in place.

Studies show that an effective IT governance structure is the most important strategy towards reaping significant returns of IT (Tallon & Kraemer, 2004). Managers should be willing to make better decisions in regard to IT so that they can be able to effect effective governance. Other studies show that good IT governance facilitates creation of aligned goals and objectives for the business (Tallon & Kraemer, 2004). In the light of the above it is imperative that managers encourage IT governance which supports all the principles, prioritization, infrastructure, application and accountability (Weill, & Ross, 2005). IT governance should be able to create and add value to products and services of a business so that levels of competency can be increased.

This study found out that companies and businesses depend on the IT departments and resources to gain a competitive advantage and thus the major reason to treat IT with seriousness (Tallon & Kraemer, 2004). IT offers companies and businesses with many opportunities and advantages and value based results. However, It is also prone to facing various challenges which must be addressed if a company or business is to be successful. For example, a company may face challenges affiliated to the corporate governance. Currently, most corporate governances have been involved in various scandals which have played a key role in depleting the trust of viable investors. Good corporate leadership is not very important in ensuring that organizations and companies gain the confidence and trust of their target investors and stakeholders. Many companies and industries prefer the use of accounting boards and managers who are supposed to follow the laid strategies to ensure that the funds of the public are not misappropriated. [1]

With the above in mind, IT governance role comes by ensuring that the responsibility of the activities of the company or business are fully adhered to by the executive managements of the business. IT technology is supposed to supplement the strategies and objectives of the organization and company (Gonzalez-Meza & Weill, 2004). IT governance should provide direction pertaining the supervision, control and monitoring of the company’s undertakings. IT governance application works differently in companies and businesses. A major rift in the results of IT management in companies and businesses is responsible in determining if the business will attain its vision, mission and strategic goals.

The risks involved in IT governance are directly held responsible to the board of directors and the management of business and companies (Tallon & Kraemer, 2004). In other words, IT governance is not just about some strategies to be applied for the smooth running of businesses but they are integral for the success of the business. IT governance ensures that there is a balance between the operational costs of protective measures to achieve the objectives of a business (Weill et. al, 2004). In this manner, any risks and objectives can be addressed through the process of monitoring the progress of the business. On the other hand, all investments of IT are not misappropriated with the application of good IT governance.

IT governance involves a number of critical procedures and activities to the managements of businesses and companies (Weill, & Ross, 2005). For example, managements should become conversant with IT and its key roles in helping businesses achieve their goals and objectives. Managements of companies and businesses should be able to delegate tasks, realize the risks of their business and the constrains involved, be able to monitor and evaluate the performance of the company or business and at the same time find lasting solutions to any impending challenges. IT governance as literature shows is about IT increasing value to the business and at the same time dealing with the risks that arise with IT governance (Gonzalez-Meza & Weill, 2004). Hence to have good IT governance it is integral for companies and businesses to understand what decisions must be made to ensure the effective use and management of IT. In that manner, a business can have a more informed insight on the direction of IT to be applied.  On the other hand, it is also imperative to note the chain of command and who should make IT decisions for the company and business (Weill, & Ross, 2005). A chain of command ensures that there is no clash of interests in the running of the business. For example, the corporate management of a company should be able to make IT decisions which will offer direction to the rest of the company or business.

Conclusion

This study found out that, IT is a key representation of a businesses capital and expenditures. IT is meant to fit into the business strategy and structure so that an organization is able to lead to productive communication and decision making strategies regarding the organizations IT governance. With the current advancements leading to the realization of global economics, the field of IT has been employed to compliment the running of businesses and companies. In other words, IT and its governance in the business scenario should be treated with a lot of seriousness since it can determine if a business will achieve its goals and objectives. For example, the corporate governance of companies and businesses should be held accountable for the IT decision making process and governance.

Reference list

(Gonzalez-Meza H., F. & Weill, P., 2004). “Banknorth: Designing IT Governance for a Growth-Oriented Business Environment”, Working Paper, November 2004.)

(Tallon P. & Kraemer K. L, 2004). When the going gets tough. The critical role of IT governance in Turbulent times. Findings from Multi-industry case studies. Retrieved on 22 March, 2009 from http://www.crito.uci.edu/pubs/2004/tallonKraemer.pdf

(Weill, P., et al., 2004). “IT Governance & Strategic Drivers-Agility, Synergy, Autonomy”, CISR Working Paper.

(Weill, P. & Ross, J., 2005) “A Matrixed Approach to Designing IT Governance”, MIT Sloan Management Review, Winter.

[1] (Tallon P. & Kraemer K. L, 2004). When the going gets tough. The critical role of IT governance in Turbulent times. Findings from Multi-industry case studies.

(Weill, P. & Ross, J., 2005) “A Matrixed Approach to Designing IT Governance”, MIT Sloan Management Review, Winter

 

Cite this IT Governance- Problems and Advantages

IT Governance- Problems and Advantages. (2016, Oct 29). Retrieved from https://graduateway.com/it-governance-problems-and-advantages/

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