Governing IT to sustain business

Organisations need to deploy a system of governance in IT to ensure that information technology is constantly aligned with their business objectives, and that efforts are sustained throughout the year, says Jaspreet Singh

Jaspreet Singh

In many organisations, IT has become necessary for the support, sustainability and growth of business. This pervasive use of technology has created a dependency on IT that calls for a specific focus on IT governance. IT governance consists of the leadership, and organisational structures and processes which ensure that the organisation’s IT sustains and extends its strategies and objectives.

Concept Of Governance

The concept of governance has its roots in the changing role of the state and in a managerial view of the operations of the public administration. These two discourses have been challenged by another approach, which can be called democratic governance. It emphasises the interactions between citizens, political representatives and administrative machinery, providing a special view of citizens’ opportunities to influence and participate in policy-making and related processes.

This perspective opens a view to the practices in which institutions, organisations and citizens steer and guide society and communities. It provides a citizen-centric view of governance which is quite different from the managerial and institutional perspectives.

Approaches such as communitarianism, tele-democracy, participatory democracy and direct democracy have been presented as alternative modes of governance. With regard to technology, democratic e-governance is based on the idea that new information and communication technology (ICT) can be used to facilitate interaction, communication and decision-making processes, and thus has the potential to strengthen the democratic aspects of governance.

During its relatively short history, e-commerce and the use of ICT in business have been more successful and glamorous than e-government or e-democracy. This may be the reason why many government initiatives try to emulate the success of e-commerce by using concepts, processes, technologies and approaches pioneered by businesses.

Many government initiatives aimed at promoting the use of ICT for governance and administration try to transfer ideas from the area of e-commerce to the area of e-government. Most notably, one can find any number of initiatives worldwide that emphasise the idea of citizen-centredness, which is based on the example of customer-centredness in e-commerce.

Further, governments try to take advantage of the strengths of e-commerce to improve their e-governance initiatives. Such attempts to import successful examples from e-commerce into e-government refer to all sorts and aspects of information systems.

On one hand, governments buy hardware and software originally developed for the private sector and apply the same to their tasks. On the other hand, they take over arguments and whole discourses from the commercial sector. Customer- or citizen-centredness is only one example of this. Others would be the ideas of efficiency, optimisation or cost-benefit analysis. While these ideas are not confined to the commercial world, they have a strong association with it, and during the past decades, they have mostly been developed in the context of private enterprises.

The attempts by governments to improve and optimise their services are usually met with approval. One of the central and frequently voiced criticisms of governments is that they are slow, they do not react to the demands of citizens, and that they are generally bureaucratic.

The business world, on the other hand, does not seem to be bothered by these problems. Businesses are deemed to be efficient, quick and responsive. Commercial entities that do not take their customers seriously are quickly replaced in the marketplace by those that do. A large portion of the criticism levelled at governments and the way they do their business can, therefore, apparently be taken care of by doing things the way they are done in business.

IT Governance

In essence, e-business IT governance addresses how to design and implement effective organisations by creating flexible IT & IS structures and processes. IT governance in a global context needs to cater to intensive competition, cultural diversity and various fluctuating economic conditions. A static model of IT governance and an organisation cannot adequately address these issues.

IT governance is mainly aimed at contributing to business activities in terms of lower costs, satisfied customers and better-quality products or services provided by a company. Governance assumes accountability, making improving the channels of accountability an important feature of IT governance, especially accounting for return on investment.

Various problems need to be addressed by the IT function. These include weak planning, and rapid business and environmental changes. The emergent process of IT governance reveals that managers need to understand that they are neither all-powerful nor powerless to affect change. Rather, they are in partial control of emerging processes that result in new organisational designs.

They need to consider the importance of global business management, cultural diversity, ethics, advanced production and information technologies as the boundaries between the Internet and customer strategy continue to merge. Some fundamental re-directions in e-business IT governance strategy thinking are considered, and a framework for global e-business IT governance and organisational design as both a planned and an emergent process is proposed.

Company Strategies

Management strategies are concerned with reaching a specific destination, and in particular with how to reach the destination. Company strategies are unique and difficult to differentiate from a specific company’s values, goals and missions. Organisations cannot expect to extrapolate or borrow a strategy from another company.

What works strategically for one company may not have the same impact on another organisation. Similarly, e-business IT governance is affected by an organisation’s unique culture and working practices, and should reflect its own goals and ambitions. The proposed framework is not a prescriptive IT governance package that can be replicated across all organisations or even for all time in a particular organisation.

Its purpose is to enable decision-makers to take a holistic and alternative view of IT governance, and to enable them to find their own appropriate mechanisms for devising an IT governance strategy that fits their particular organisation. This approach is based on the increasing literature on emergent organisations and its corresponding effect on IS development and IT governance.

Some authors state that IS development in IT governance is possible without formal methods. The proposed framework for global e-business IT governance supposes that the problem is one of recognising and accommodating emergent activity instead of focussing purely on planned rational governance.

Conclusion

While planning is a vital aspect of IT governance, the pace of economic change nationally and internationally quickly makes plans outdated. Business needs for IT and IS tend to emerge because of organisational and economic factors; thus, e-business models need to encompass emergent activities.

The business rationale for e-business requires a broader scope for IT governance, considering both IT and business issues. A critical aspect of e-business IT is the development of organisational interfaces, which traditional IT governance has not had to deal with. These interfaces, for example, between a customer and an organisation, or a business partner and an organisation, are vital for the success of e-business IT governance.

The conclusion is that global e-business IT governance should be regarded as both a systematic and organic approach to IT resource management.

The author is Consultant, Business Solutions, IT Risk Management, at PricewaterhouseCoopers.
He may be contacted at jaspreet.singh@in.pwc.com