IT Governance

IT Governance: A Pocket Guide

ALAN CALDER
Copyright Date: 2007
Published by: IT Governance Publishing
Pages: 48
https://www.jstor.org/stable/j.ctt5hh5pf
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  • Book Info
    IT Governance
    Book Description:

    If you are unsure what IT governance is, or how it is relevant to your business, this pocket guide is for you. It outlines the key drivers for IT governance in the modern global economy, with particular reference to corporate governance requirements and the need for companies to protect their information assets.

    eISBN: 978-1-905356-30-0
    Subjects: Technology, Business

Table of Contents

  1. Front Matter
    (pp. 1-4)
  2. Table of Contents
    (pp. 5-5)
  3. CHAPTER 1: WHY IT GOVERNANCE MATTERS
    (pp. 6-8)

    In the twenty-first century, IT governance is, within the broader corporate governance context, critical for all organizations. Those without an IT governance strategy face significant risks; those with one perform measurably better.

    The ‘greed is good’ business philosophy of the 1980s and 1990s seemed to give way, at the end of the twentieth century, to a ‘looting is good’ approach. While catastrophic financial failure is a frequent characteristic of the business cycle, widespread looting of public companies by their senior executives had become more common: BICC, Maxwell Communications, Enron and WorldCom are all good examples. The spate of collapses and...

  4. CHAPTER 2: DRIVERS FOR IT GOVERNANCE
    (pp. 9-15)

    The five major drivers of IT governance are:

    1. The search for competitive advantage – in the dynamically changing information economy – through intellectual assets, information and IT.

    2. Rapidly evolving governance requirements across the OECD, underpinned by capital market and regulatory convergence.

    3. Increasing information- and privacy-related legislation (compliance).

    4. The proliferation of threats to intellectual assets, information and IT.

    5. The need to align technology projects with strategic organizational goals, ensuring that they deliver planned value (‘project governance’).

    The new information, or knowledge, economy is fundamentally different from the old manufacturing one. The globalization of markets, products and resourcing has led to increasingly...

  5. CHAPTER 3: STRATEGIC AND OPERATIONAL RISK MANAGEMENT
    (pp. 16-24)

    Risk management has always been a key governance issue. The board’s job is strategy and, therefore, strategic risk has always been a board responsibility. The modern corporation’s fundamental goal is to continuously create and add value to its business. This means that boards must find an appropriate balance between profit maximization and risk reduction.

    Strategic risk can be described as the enterprise level risk of a negative impact on earnings or capital arising from an organization’s future business plans and strategies, improper implementation of decisions, or lack of responsiveness to industry changes. It includes risks associated with plans for entering...

  6. CHAPTER 4: SYMPTOMS OF INADEQUATE IT GOVERNANCE
    (pp. 25-26)

    1. How does your board assess (measure) the real contribution made by any of your IT systems to improving the organization’s competitiveness?

    2. What divergence is there between the views that your sales/operational management has of the benefits of IT systems and projects and those of the IT management? Who is right and how do you find out? Are you getting maximum value (maximum business benefit for minimum actual total cost) for each of your IT investments? How would you know? How would you know if your IT spending is putting your company at a cost disadvantage?

    3. What is your board’s process...

  7. CHAPTER 5: WHAT IS IN AN IT GOVERNANCE FRAMEWORK?
    (pp. 27-36)

    An IT governance framework consists, essentially, of a set of principles, a decision-making hierarchy and a tailor-made suite of reporting and monitoring processes.

    There are eight key decision areas for designing an IT governance framework:

    1. IT governance principles and decision-making hierarchy. There are two types of principle in this context:

    a. governance principles, to do with how IT is to be managed in the enterprise, and

    b. implementation principles, to do with how IT is to be used to achieve the business strategy.

    2. The information strategy (which must be derived from the business strategy):

    a. What information do we need,...

  8. CHAPTER 6: BENEFITS OF AN IT GOVERNANCE FRAMEWORK
    (pp. 37-38)

    Good governance only makes sense if it makes sense. As long ago as 1996, McKinsey and Company found that two-thirds of the companies in a survey would pay an 11% premium for the stock of a company with good governance practices.17

    More than that, ‘companies whose boards engage in one or more of [the] three governance practices that signal board independence from management outperform their peers and produce higher returns for their shareholders’,18as measured by economic value added (EVA – earnings (post-tax) in excess of the cost of the capital required to generate them).

    And if good governance makes...

  9. CHAPTER 7: THE CALDER-MOIR IT GOVERNANCE FRAMEWORK
    (pp. 39-44)

    The Calder-Moir IT Governance Framework21is a straightforward framework for structuring IT governance within an organization.

    Most of the IT-related disciplines offer solutions and tools that can help with IT governance, but most of them are very detailed, and have narrow scopes. No single tool provides a full picture of IT governance, and collectively they can give a confusing picture that hinders the purpose of IT governance, which is to equip boards with information and levers for directing, evaluating and monitoring how well IT supports their core business.

    The Calder-Moir Framework is not another solution, but a way of organizing...

  10. APPENDIX: IT GOVERNANCE RESOURCES
    (pp. 45-47)