Change Management of Large Scale Enterprise - Essay Example

?Introduction IT Governance is an integral part of every business or enterprise governance as it provides the direction and controlled aimed at ensuring that investments made in the field of IT ass value to the business translated in terms of revenue. It governance focuses on IT systems and their performance in relation to the risks that are likely to be encountered by the business and how they can be tolerated. According to De Haes and Van Grembergen (2009a), the IT functionality of a business must be aligned with the needs of the business in order to improve the management of IT-related risk and its relationship with the business. Further De Haes and Van Grembergen (2009 b) state that the governance structures must be set strategically align the IT to the business, manage risks, deliver value, manage resources and thereafter measure the performance of the business. From the onset, it is important to note that enterprises exist to give value to their stakeholders through the operation in an atmosphere that gives value, while at the same time minimizing risks and the responsible utilization of the resources available. In an environment that is rapidly changing, the faster setting of directions and faster reaction to the change is essential as well as the sharing of the decision-making among stakeholders. Business enterprises that want to ensure that are successful implement overarching systems of governance in order to achieve business aims at all levels of operation and that IT governance practices and IT outcome are correlated in the sense that stronger IT governance practices give better IT governance outcomes. Business enterprises in general are complicated entities that must incorporate technological and financial systems operating in a dynamic market and business circumstances that are not certain requiring change management from time to time. Most of these businesses are large-scale with a distributed system characterized by highly complex that involves the interaction of many aspects including humans, services, applications and devices. Due to this complexity, enterprises may have inefficiencies such as unnecessary human labour and under-utilized information technology devices and the lack of modelling or optimization of the operations of the business. This leads to delays and latencies that may be caused by traffic bottlenecks and engineering or design that is imperfect that therefore requires the businesses to change or evolve into better forms that exhibits improved performance. In our research paper, we review the business enterprises as large-scale and distributed system with specific dynamics exhibiting a typical behaviour of which adaptability or system change is the key to the viability of the business. To pursue this, we postulate that the longevity of a business enterprise is determined by its ability to adapt to changes over a long duration of time, depending on either the natural systems or the artificial systems that are dictated by intelligent but conscious decisions in line with the market conditions. Whereas previous work have focused on the structural features of information technology governance, there are concepts of IT governance that must be endeavoured in order to appreciate IT governance process and enterprise change. It is notable that regardless of the market dynamism, effective IT governance can only be achieved through the strategic integration of both IT and business decisions and the establishment of collaborative relationships amongst the stakeholders concerned. Therefore, the question that begs to be answered is what procedure or mechanism is necessary in the IT governance in the current business environment. Past studies have only focused on the structural mechanisms and ignoring process mechanisms that have resulted in partial leading to limited understanding of IT governance. However, present studies address the social and procedural mechanisms for the governance of IT that makes it easier for any person attempting to manage large-scale enterprise change. Decision making with an enterprise includes strategic decisions as well as the operational costs that have serious impact on the business enterprise and must be made by persons who are entitled to make decisions on behalf of the business. It is therefore imperative that decisions are made which are sound and well-coordinated and at the right time and must be accurate. This ensures that there is uniform information across the whole business and are sustained over a long period of time that is essential for the performance of the business and its ability to adapt to the business or market environment. In normal business operations, information is usually gathered and then transformed into telling performance indicators as well as parameters then mapped in line with the objectives of the business. In this case, it is important to consider the operational constraints of the business that may prevent execution of appropriate optimal actions and thereafter satisfy the client and serve the interests of the customer. In the achievement of this, most business enterprises are arranged in a manner that is hierarchical and networked through several units in those decisions are made at the top and communicated to the lower levels before being distributed and acted upon according to the aims of the business enterprise. The process of managing enterprise change can be grouped into changes in the general enterprise and may be integrated with changes that are meant to fine-tune it such as changes in some parameters. Therefore, the challenge is to comprehend how people, processes and the available technology can be effectively combined to have a serious large-scale enterprise that will be able to adapt to the changes in the external environment and trigger change in the internal systems. Enterprise technologies have enabled the adaptation of business by improving their performance by magnitude and enabling them access new markets as well as creating others efficiently. Consequently, enterprise IT infrastructure and its proper governance have a positive impact on the performance of the business as it plays an important role in the evolution of the enterprise and its development and adaptation. The evolution and adaptation can be partly attributed to the increase in IT budget that allows greater innovation that may help in the stimulation of the development f new technologies for the enterprise. The importance of this is that it facilitates better adaptation and faster response in achieving the changing needs of the enterprise according to the needs and requirements of the competing interests of the stakeholders. In the present business enterprises, IT governance is getting more complex because of the numerous heterogeneous systems dependent on each other that may makes it difficult to manage the whole infrastructure. Therefore in order to keep the companies running, it is important to have a proper analysis of change and be able to make adjustments whenever there are conflicts with that may compromise the existing infrastructure. IT Governance According to Weill and Ross (2004a), IT governance encompasses all areas of corporate information and information and the system responsibility that therefore requires that there is constant improvement of the IT governance. This is lent credence by research that has found that the effective governance of IT gives the true prediction of the value of the organization and depends on how it is implemented in the organization. According to Tirole (2001), IT governance is a form of corporate governance that refers to the taking care of the interests of the stakeholders as they are in most instances not involved in the day-to-day activities in the management of the business enterprise and must therefore appoint managers to do the same. He also states that it is aimed at minimizing costs and risks in the management of the business and maximizing the returns to the owners through the utilization of the skills brought by the new management. Simply put, IT governance is the strategic alignment of It with the business in order to achieve its maximum business value through the proper development and maintenance of effective It control and accountability as well as management of performance and risks. Peterson (2004) on the other hand describes IT governance as the allocation of the rights and responsibilities to make business and strategic decisions by business enterprise stakeholders and includes the mechanisms and procedures for the making and monitoring of these strategic decisions on information technology governance. Thus, it is important to note that they state clearly that IT is separable from the business entity and that it cannot work in consonance with the objectives of the business and that it must be controlled. IT governance is divided into two approaches one of which focuses on the decision and authority structures while the second focuses on the activities of the IT itself. De Haes and Van Grembergen (2010), agree with the fact that the IT governance practical framework focuses mainly on the control, security and the accountability of the system in line with its alignment to the business objectives of the entity in question. Therefore, the agency theory is one of the theories of IT corporate governance that explains the mutuality of behaviour of the owners of the business enterprise in that they act as self-interested parties while ignoring the fact that they should work together in order to achieve the common objectives of the firm. It assumes that every person in the business is rational and would make decisions based on economic considerations and attempt to maximize their own utility functions. In order to address the problems brought about by the agency theory in IT governance, the stewardship alternative can be adopted as it focuses more on the shared goals and less on the differences between owners and their agents and explains relationships based on non-economic assumptions. Weill and Ross (2004b) have given the activities of IT governance that differentiates companies according to performance and prescribe the best practices in terms or agency or stewardship and how they are aligned to the objectives of all stakeholders. They therefore propose that in order to attain the desired corporate outcomes, it is important to reconcile asset utilization and growth in terms of revenue when measuring the success of the steward theory in corporate governance. Further, Weill and Ross propose that in order to maximize on profits, IT governance must embody a high degree of standardization that ensures there is low cost of doing business. Well and Ross (2005) state that IT risk management is one of the issues that are likely to crop up in the IT governance issues as all stakeholders will find themselves asking whether they have an enterprise risk management framework that is viable. This implies that the significance of this framework is to ensure that it comprehensively controls the governance of business-driven IT-based solutions and services thus helping in the implementation of the objectives of the business. However, there are challenges that exist in the value creation of It investments such as increasing costs and staff insufficiency coupled with stiff competition. A serious challenge exists as to the establishment of a governance framework as most employees cannot effectively or appropriately make good use or establish governance frameworks for IT. Having the best framework for IT governance is important as it helps the business enterprise to deliver solutions that are of the right quality as well as harnessing the full potential of the business and increase efficiency and productivity. According to Smith, Fingar and Carr (2003), while there is no commonality on the strategic advantage of IT in a business, there is unanimity that IT has a great impact on business and challenges that must be addressed. Korac-Kakabadse and Kakabadse (2001) state that IT governance can meet several challenges and these require resources and capabilities in order to mitigate the effects of these challenges that are either classified as stakeholder and control challenges. The governance is meant to handle the challenges in IT through structural, process and relational aspects that focus on strategic alignment of the It to the functions of the firm. This should be adhered to in order to ensure that It does not work against the other strategic interests of the entity through the diversion of resources meant for other functions or the creation of barriers through systems that are not transparent or are faulty. IT governance faces serious challenge in terms of the management of the information systems (IS) since it is normally isolated from the general management of the business therefore there are few areas of commonality in terms of training and implementation of the terms. Therefore, Peterson (2004) states that this problem will be encountered in attempting to have a collaborative behaviour of all stakeholders in order to have solutions that integrate all their problems. Another serious challenge brought about by It governance as a solution to IT challenges is the availability or presence of several approaches at different levels that have differing management philosophies. The effect of this is that it has created confusion that hinders the translation of IT governance as a means of implementing the protection of the interests of the owner in a business into actual practice of Information Technology. Conclusion The implementation of IT governance structures require that organizations embrace and manage the change in every business enterprise to ensure that there is only the desirable behaviour that enables proper management of change. With the renewed interest in the management of enterprise change in large businesses, there is the need to have a proper understanding of this field in order to solve some of the problems facing such business enterprises today. As new technologies are developed for enterprise management, there is the possibility of the cropping up of new concepts that makes it easier for enterprises to adapt to the changing business dynamics and conditions. In IT governance, the primary mechanism remains the control-autonomy whereby strategies are required in order to lower the costs of doing business that requires successful relationships. Whichever theory a person chooses as a way of IT governance, it must be intended for absolute success as they greatly influence the IT processes required. As most of the work involved in IT governance assume that its governance moves vertically downwards, the role of governance cannot be overstated. As we move into the future and there are numerous challenges that come with IT governance, business enterprises must ensure that there is data privacy in that access to information on the customer, the consumer or any other enterprise is properly secured. The business must also consider the regulatory impacts of the IT governance mode adopted as well as testing its capability in that the applications must be developed in line with the requirements of the business. It is therefore imperative that the more an enterprise develops its IT governance mechanism, the more it benefits due to increased investment calling for change pursuant to the COBIT principles. This would include making technology an integral part of the business strategy, focusing on the functional business alignment and engaging employees at all levels of the organization. It also calls that the business enterprise integrates IT governance framework and ownership as well as developing responsibilities for both IT governance and management. Reference List De Haes, S., & Van Grembergen, W. 2009a. An Exploratory Study into IT Governance Implementations and its Impact on Business/IT Alignment. Information Systems Management. 26, 123-137. De Haes, S., & Van Grembergen, W. 2009 b. Exploring the relationship between it governance practices and business/it alignment through extreme case analysis in belgian mid-to-large size financial enterprises. Journal of Enterprise Information Management. 22, 615-637. De Haes, S., & Van Grembergen, W.2010. A Research Journey into Enterprise Governance of IT, Business/IT Alignment and Value Creation. International Journal of IT/Business Alignment and Governance. 1, 1-13. Korac-Kakabadse, N. & Kakabadse., A. 2001. IS/IT Governance: Need for an Integrated Model. Corporate Governance. Vol 1., No. 4, pp. 9-11 Peterson, R. 2004. Crafting Information Technology Governance. Information Systems Management. Vol. 21, No. 4, pp. 7-22. Smith, H., Fingar, P., & Carr, N. G. 2003. IT doesn't matter--business processes do: a critical analysis of Nicholas Carr's I.T. article in the Harvard business review. Tampa, Fla, Meghan-Kiffer Press. Tirole, J. (2001). Corporate Governance. Econometrica. Vol 69, No. 1, pp. 1-35. Weill, P. and Ross, J.W. 2004a. IT Governance: How Top Performers Manage IT Decision Rights for Superior Results, Boston, MA: Harvard Business School Publishing. Weill, P. and Ross, J. W. 2004b. IT Governance on One Page (November 2004). MIT Sloan Working Paper No. 4517-04; CIS Research Working Paper No. 349. Weill, P., & Ross, J. (2005). A Matrixed Approach to Designing IT Governance. MIT SLOAN MANAGEMENT REVIEW. 46, 26-34. Read More