IT Governance CIS 9002 Kannan Mohan Department of CIS Zicklin School of Business, Baruch College

Learning Goals What is IT governance? Why is this important? How does it affect the IT department? What is the role of the CIO in shaping IT governance? How does IT governance change when IT is outsourced?

IT Governance

What is IT governance? Decision rights Accountability Structure for setting up objectives Monitoring to ensure objectives are achieved What, who, and how about decisions Aligning IT spending with company’s strategy (Weill and Ross, 2004)

What Decisions? IT principles – business role IT architecture – integration and standardization IT infrastructure – capabilities Business application needs - rationale IT investment and prioritization (Weill and Ross, 2004)

Who makes decisions? Governance Archetypes Business monarchy IT monarchy Feudal Federal IT duopoly Anarchy (Weill and Ross, 2004)

Categories of Governance Mechanisms Decision-making structures Various governance archetypes Alignment processes IT investment process Formal communications Transparency of decision-making process

IT Governance Focus Areas Strategic alignment Value delivery Resource management Risk management Performance measurement (ITGI - COBIT, 2007)

IT Investment Decisions How do organizations prioritize IT investments? Who decides what gets funded? Who owns the process? And who facilitates its implementation? Who is accountable when things go wrong? Local vs. Global objectives? Transparency of process and consequences

IT Governance Posture How do you balance global and local objectives? (Sambamurthy and Zmud, 2012)

Role of Board of Directors Reality? Lack of IT expertise Limited discussions on IT-related issues After the fact updates Responsibilities? IT risks threatening – Business continuity Regulatory compliance Competitive success (Sambamurthy and Zmud, 2012)

IT Asset Portfolio (Weill and Aral, 2004)

Changes with IT Outsourcing Accountability without control Contractual vs. relational governance Formal vs. informal? Need for flexibility Changes in the role of the IT organization Service delivery to relationship management

The Ambidexterity Pendulum

Learning Goals What is IT governance? Why is this important? How does it affect the IT department? What is the role of the CIO in shaping IT governance? How does IT governance change when IT is outsourced?