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Enterprise Governance of IT

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Enterprise Governance of Information Technology

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Abstract

The previous chapter provided a high-level description of the “Enterprise Governance of IT (EGIT)” concept. This second chapter starts with discussing the genesis and evolution of EGIT, both in academic research and practice. Then, this chapter introduces mechanisms that can be used to implement EGIT in practice. Indeed, developing a high-level model for EGIT is the first step, deploying it throughout all levels of the organization is the next challenging step. To effectuate this, EGIT can be deployed using a mixture of various structures, processes, and relational mechanisms. These EGIT mechanisms will be discussed in this chapter, including a demonstration of how such mechanisms were leveraged in the context of KLM, a large international airline company. Finally, specific EGIT-related topics will be discussed such as the role of the board in EGIT, IT governance transparency, the inter-organizational governance of IT, ambidextrous EGIT, and a more theoretical view on EGIT by drawing on the lens of the Viable System Model (VSM).

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Notes

  1. 1.

    Each archetype identifies the decision-makers involved in an IT decision. The following archetypes are proposed: (1) business monarchy (i.e., top managers), (2) IT monarchy (i.e., IT specialists), (3) feudal (i.e., each business unit making independent decisions), (4) federal (i.e., combination of the corporate center and the business units, with or without IT people involved), (5) IT duopoly (i.e., IT group and one other group, e.g., top management or business unit leaders), and (6) anarchy (i.e., isolated individual or small group decision-making) (Weill & Ross, 2004).

  2. 2.

    The following types of IT decisions are proposed: (1) IT principles (i.e., clarifying the business role of IT), (2) IT architecture (i.e., defining integration and standardization requirements), (3) IT infrastructure (i.e., determining shared and enabling services), (4) business application needs (i.e., specifying the business need for purchased or internally developed IT applications), and (5) IT investment and prioritization (i.e., choosing which initiatives to fund and how much to spend) (Weill & Ross, 2004).

  3. 3.

    The slight upward curve for the next 3 years is due to a temporary decrease of production in response to the global economic crisis.

  4. 4.

    Acknowledgment: This section is based on the doctoral research of Laura Caluwe, and more specifically on an article that was developed in the context of this doctoral research, i.e., Caluwe and De Haes (2019).

  5. 5.

    The notion of ambidexterity is based on the generic recognition that a focus on both exploitation and exploration is required (Duncan, 1976; Markides & Chu, 2008; O’Reilly & Tushman, 2013; Tushman & O’Reilly, 2007). Specifically, O’Reilly and Tushman (2013) refer to “organizational ambidexterity” as the ability of an organization to both compete in mature technologies and markets where efficiency, control, and incremental improvement are prized (i.e., exploit) and to also compete in new technologies and markets where flexibility, autonomy, and experimentation are needed (i.e., explore).

  6. 6.

    It is holistic in the sense that it is aimed at avoiding the “trap of reductionism,” i.e., missing the interconnectedness between parts (Reynolds & Holwell, 2010).

  7. 7.

    Organizing logic can be defined as “the managerial rationale for designing and evolving specific organizational arrangements” (Sambamurthy & Zmud, 2000, p. 107).

  8. 8.

    Stafford Beer developed and described the VSM in his seminal trilogy, under the general heading of “The managerial cybernetics of organization” (Beer, 1972, 1979, 1981, 1985). The VSM is theoretically grounded in “management cybernetics,” which is about applying cybernetic principles to the management of organizations (Beer, 1959). Beer (1985, p. ix) states that: “cybernetics is the science of effective organization.” As a result, the VSM can be referred to as “a theory of organization” (Anderton, 1989, p. 40).

  9. 9.

    The five necessary and sufficient structural functions are interconnected through communication channels or variety loops, together enabling the system to be effective over time (Beer, 1979, 1985; Jackson, 2003).

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Authors and Affiliations

  1. Antwerp Management School, University of Antwerp, Antwerp, Belgium

    Steven De Haes, Wim Van Grembergen & Tim Huygh

  2. Antwerp Management School, Antwerp, Belgium

    Anant Joshi

  3. Maastricht University, Maastricht, The Netherlands

    Anant Joshi

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De Haes, S., Van Grembergen, W., Joshi, A., Huygh, T. (2020). Enterprise Governance of IT. In: Enterprise Governance of Information Technology. Management for Professionals. Springer, Cham. https://doi.org/10.1007/978-3-030-25918-1_2

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