Business value through controlled IT: toward an integrated model of IT governance success and its impact

Abstract

Owing to increasing regulatory pressure and the need for aligned information technology (IT) decisions at the interface of business and IT, IT governance (ITG) has become important in both academia and practice. However, knowledge of integrating the determinants and consequences of ITG success remains scarce. Although some studies investigate individual aspects of ITG success and its impact, none combine these factors into a comprehensive and integrated model that would lead to a more complete understanding of the ITG concept. To address this gap, our research aims at understanding what factors influence and result from successful ITG, and at determining how they can be translated into a model to explain ITG success and the impact thereof. Therefore, we conducted interviews with 28 IT decision makers in 19 multinational organizations headquartered in Europe. Our study synthesizes the fragmented previous research, provides new empirical insights gathered on the basis of a clear ITG conceptualization, and suggests three innovative constructs heretofore not related to ITG. Moreover, we elucidate in a holistic model the factors that make ITG successful, how ITG contributes to an IT organization’s success, and how it eventually unfolds throughout the overall organization. The resulting model allows organizational decision makers to develop an effective ITG implementation and to explain the implications of successful ITG, thus providing a justification for the respective investments.

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Acknowledgements

We thank the Institute for Research on Information Systems at EBS Business School and the CIO & Project Advisory competence center of Horváth & Partners Management Consultants for supporting the empirical study presented in this paper.

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Correspondence to Arne Buchwald.

Appendix

Appendix

Interview guide

Demographic details

  1. 1

    Interview partner

    1. a

      What is your name?

    2. b

      In which department are you employed?

    3. c

      What is your role in the company?

    4. d

      How many subordinates do you have?

    5. e

      How long have you been working for this company?

    6. f

      How would you rate your experience in the field of ITG (on a scale of 0 [low] to 5 [high])?

  2. 2

    Company

    1. a

      What is the name of your company?

    2. b

      To which industry does your company belong?

    3. c

      Over how many locations is your company spread? International subsidiaries?

    4. d

      How many people are employed in your company?

    5. e

      How high were the sales of your company in the last financial year?

  3. 3

    IT organization

    1. a

      How many employees (internal, external) can be attributed to the IT organization of your company?

    2. b

      How much were the total IT costs (expenses for internal and external services) for the last financial year? More IT outsourcing in the past years?

    3. c

      Does the IT organization of your company provide services for external customers?

    4. d

      What is the legal structure of the IT organization (business division/department, group, separate entity, etc.)?

    5. e

      How is the IT organization organized (cost center, service center, profit center, etc.)?

    6. f

      To whom does the CIO report in your company?

    7. g

      Does the IT organization create value for your company (on a scale of 0 [low] to 5 [high])?

    8. h

      How would you estimate the customers’ appreciation of IT (on a scale of 0 [low] to 5 [high])?

Interview questions

  1. 1

    Understanding

    1. a

      What does ITG mean to you personally?

    2. b

      According to your individual understanding, what are the most important elements and topics of ITG?

    3. c

      How is the term ITG defined in your company?

    4. d

      Where do you draw the line between ITG, IT strategy, and IT management?

  2. 2

    Level of implementation

    1. a

      How would you characterize ITG in your company?

    2. b

      How would you characterize the degree of maturity of ITG in your company (according to CoBIT)? What are open topics in the field of ITG in your company?

    3. c

      Does your company have documentation for ITG? Would you make this available to us?

    4. d

      Is ITG in your company defined as a part of corporate governance or is it derived from it?

    5. e

      What methods and standards of ITG are used in your company (CoBIT, ITIL, etc.)?

    6. f

      Who is responsible for ITG in your company? Dedicated function of ITG? Management staff unit or line function? In your opinion, who in your company should be responsible for ITG?

    7. g

      How would you assess the significance of the topic of ITG in your company?

  3. 3

    Development

    1. a

      How has ITG in your company developed over the past years?

    2. b

      What challenges or problems were faced regarding the establishment or development of ITG?

    3. c

      Are there currently any projects or other initiatives dealing with ITG in your company?

    4. d

      Is there a concrete plan for developing ITG in your company?

  4. 4

    Goals and benefits

    1. a

      What goals have been pursued to establish the current corporate governance in your company? Which of these goals have actually been achieved?

    2. b

      From your perspective, what are the potential benefits of ITG in general?

    3. c

      From your point of view, when is ITG successful? How can the potential benefits of ITG be achieved best?

    4. d

      In your opinion, by how far does ITG have the potential to positively influence the performance of the IT organization and of the company?

  5. 5

    Success and contextual factors

    1. a

      From your point of view, what are the most important critical success factors of ITG?

    2. b

      From your point of view, what are the most important critical constraining factors of ITG?

    3. c

      From your perspective, how do contextual factors influence ITG? What are the most important contextual factors from your point of view?

    4. d

      How important do you consider an improved understanding of the success and constraining factors of ITG?

Finally, are there any further comments or suggestions you would like to make with regard to the topic of ITG?

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Buchwald, A., Urbach, N. & Ahlemann, F. Business value through controlled IT: toward an integrated model of IT governance success and its impact. J Inf Technol 29, 128–147 (2014). https://doi.org/10.1057/jit.2014.3

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Keywords

  • IT governance
  • IS management
  • IS success/failure
  • IS alignment