Trade-Offs Associated with Assigning IT Budgets - Essay Example

Chapters 8 & 9: Adventures of an IT Leader Chapter 8 Responses The tradeoffs associated in assigning IT budgets to user departments include lack of control with regards to prioritizing, categorizing and spending funds for projects and expenses of these user departments from the point of view of IT personnel; lack of complete accountability in cases of problems that could ensue from spending funds according to the user departments’ budget; inability to provide immediate go signals for projects deemed urgent and necessary from the IT department’s perspectives; and the need to rationalize and justify spending according to the user departments’ budgets. IT was noted to have a slush fund to provide them with enough leeway through stashing some reserve funds to be earmarked for urgent IT projects that do not get approved through the traditional decision-making and approving protocols, but need to be attended to or addressed. One firmly believes that there is a better way to handle the issues involved still using the conventional decision making process in the organization. This way, all stakeholders would be duly advised and would be aware of the actual sources and disbursements of all company funds pursuant to the policy of transparency. Apparently, due to the technical terms that are used by IT managers, it is relatively difficult and challenging for them to relay the accurate information that they intend to communicate to the rest of the stakeholders in the organization. Therefore, one way to improve this is to standardize the communication terms or find somebody from IT who is also an expert in simplifying IT terms to assist in communicating information in a manner which would be best understood by everybody concerned. Honestly, as the CIO, one strongly agrees with the decision of Barton to ask for complete, yet temporary control for the IT budget. In doing so, he would be able to steer the department into pushing through with urgent and relevant projects, as deemed necessary by his team. His priority was to look into the security issues brought out by Cho, whose previous recommendations were precluded from pushing through when he was the Loans Operations manager of IVK. By asking complete control, he assumes complete responsibility and risk to answer any untoward incident that could ensue from this strategy. This is considered a bold move; but as the saying goes, the greater the risk, the greater the returns. In terms of transparency and accountability to external stakeholders, there are information would could be available but not highlighted or stressed; and those which should be ultimately revealed in their entirety. For customers, for instance, information that directly affects their ability to decide on patronizing the company’s products and services should always be available. But any information that does not directly affect them (such as information needed by suppliers or investors) should be kept from them. For stockholders, all pertinent information relating to operations and uses of resources should be appropriately disclosed. For regulators, any decisions or information needed to indicate that the organization complies with legal requirements must be disclosed. Therefore, the information that is relayed to the kind of external stakeholders, could in fact be controlled by IVK, depending on the interests of the users and how the information would benefit them. Chapter 9 Responses The reason why the IT presentation was the last item on the agenda and given only 30 minutes could be the usual standard operating procedure during board meetings since other more urgent or relevant issues need to be resolved. Anyway, one believes that the order of presentation in the agenda should not be a serious matter to contend with as long as the department is given appropriate time to relay immediate and important concerns for information of board members and other members of the management team. One strongly believes that the board should have equal participation, jurisdiction, accountability and concern for IT governance, as well as with other departments in an organization. The board is the highest decision making body that should be provided with appropriate information concerning all facets of the organization. As such, the board plays a crucial and important role with respect to IT governance in terms of approving programs and projects deemed necessary for the survival and sustenance of the organization on a long term basis. The creation of the IT oversight committee could have been delayed due to the need and demand relayed by the CIO. Apparently, since Barton was a management officer previous to being an IT head, he recognized the need to include the participation of board members through the creation of an IT oversight committee to assist them in reviewing and evaluating proposed programs and projects that are equally important in the organization. It took quite a while since a CIO, such as Barton, would illuminate board members of their crucial role in IT governance, administration, and management. 4. How should Barton handle Carraro and Williams? As recommended by Williams, Barton should ensure that an open line of communication is established between them, especially when there are correspondences being made with Carraro. It is pertinent that a bond of trust be formed to put any potential threat from the mind of Williams to rest. Communicating and corresponding with both Carraro and Williams should be on a formal, professional and equitably fair footing to prevent distrust and unfair advantage given to anyone. So far Barton is doing very well and has manifested excellence in the way he is governing the IT department. As evident, the team managers from his department have expressed collaboration and participation in their respective endeavors. His biggest wins include understanding the way IT operates, the programs and projects that need to be prioritized, the plans and visions earmarked for the group, and asking control for the budget to enable them to push through with urgent projects from their perspectives. So far, the only loss was the threat that Williams felt for him since he was appointed CIO and thereby, he could be contended to be voted as a replacement for his position. Work Cited Austin, Robert D., Richard L. Nolan and Shannon ODonnell. Adventures of an IT Leader. Harvard Business School Publishing Corporation, 2009. Print. Read More