IT Governance Evaluation Program - Case Study Example

IT Oversight Overview The discussion briefs about the issues related with IT oversight in companies and accordingly, appropriate recommendations are framed based on which IT oversight risks might be mitigated. Identification of the Main Issues and/or Problems Information technology (IT) has emerged as one of the most important elements for organizations to build better competitive position globally. Companies are currently involved in making huge investment for the development of IT segment. Nevertheless, continuous advancement in IT has also been accompanied with certain serious risks and issues arising due to a lack of proper IT governance. Correspondingly, the companies with inadequate IT governance and the trap of oversight related to IT activities are faced with the issues concerning reliability, security, quality, and maintenance of existing IT investments. Consequently, these issues have created greater demand for the organizations to adopt effective IT governance and address the issue of oversight in order to effectively deal with the emerging issues. Analysis of the Key Issues Presently, companies are identified to face problems in the area of IT governance and oversight framework with respect to proper management and maintenance of existing IT infrastructure. Additionally, companies fail to understand the importance of IT in formulating organizational strategies. Due to increased complication associated with management of IT infrastructure, companies are witnessed to be challenged with ensuring reliability, security and quality of the existing IT system which are deemed to be important for carrying out the day- to-day operations of a company. Companies lacking knowledge about IT infrastructure are unaware regarding software, information and hardware that are owned and implemented, which in return is affecting the companies from leveraging the best outcome from their IT investment. The failure of companies to review reliability and security measures has led to service disruption. There is also the issue of inappropriate project management system owing to which companies are identified to face problems in tracking inventory, orders and revenues. A number of organizations are also identified to face IT-related issue in relation to the implementation of legacy system. Inappropriateness of legacy system adversely affects accounting department of companies in updating as well as accounting financial information and other relevant data due to which data might become out-of-date. Companies are also under the threat of legal problem of intellectual property which in turn is causing a rise in distraction costs and affecting business inefficiency (Nolan & McFarlan, 2005). Alternative Solutions and/or Options with Methods of Comparison between the Solutions Companies are required to develop a matrix based on which the management might be able to determine the position of the businesses. However, it is worth mentioning that not all the IT governance strategies might be effective in all the companies. For instance, a strategy that is extremely useful in a retail company may not be appropriate for airline or any other companies. Management of companies is required to be entitled with the responsibility of scrutinizing business performance and business position according to their needs and requirements. Subsequently, companies should adopt ‘IT strategic impact grid’ matrix based on their requirement in order to have a better understanding about IT governance and proper monitoring of IT activities. Companies with the assistance of the matrix will be able to have an immense understanding of business performance in relation to IT segment (Nolan & McFarlan, 2005). The matrix is depicted hereunder: Fig 1: IT Strategic Impact Grid Source: (Nolan & McFarlan, 2005) The organizations are also required to adopt effective IT governance practices with the assistance of which IT operations can be managed as well as operated in a systematic manner. Companies with the development of IT governance committee will be able to control and direct the present along with the future usage of IT. Effective practice of IT governance will aid the management of companies in monitoring and organizing operations efficiently. The structure of IT governance is presented hereunder: Fig 2: IT Corporate Governance Source: (CRUE, 2008) Based on the above illustrated pictorial representation, companies are required to develop an appropriate board-level IT oversight with the aim of recruiting competent IT technicians and IT management team who can use their expertise to effectively manage advanced technology applications. Additionally, companies with the assistance of IT governance will be facilitated in integrating all the business committees with the IT governance committee (Nolan & McFarlan, 2005). Subsequently, companies with the assistance of effective IT governance will be able to make appropriate decisions relating to policies along with strategies to be implemented with the intention of enhancing business performances and competitive position (CRUE, 2008). Short-Term and Long-Term Recommendations In terms of short-term objectives, the management of companies should ensure that IT oversight policies assist in providing better value added services. Additionally, IT governance will also aid in having a better understanding of essential IT components required for controlling as well as minimizing IT risks. In this respect, in order to minimize IT risks, IT governance is required to focus on five different domains which include value delivery, resource management, IT strategic alignment, performance management and risk management. The domains will assist in aligning IT strategy with overall organizational strategy in order to maximize business outcomes. Additionally, the domains of IT governance will aid in managing resources and risks suitably so that business operations are conducted successfully. IT governance will also aid in ascertaining the extent to which desired goals are accomplished successfully (Kearney & Kruger, 2013; Gheorghe, 2011). Fig 3: Time Frame Short-Term Objectives Likewise, as a long-term objective, companies are required to develop effective IT oversight policies in order to make appropriate decisions so that business operations are conducted with better accountability. The IT governance model should be developed in around 6 months. The pictorial representation of IT corporate governance is presented below: Fig 4: IT Corporate Governance Source: (Racz et al., 2010) Roles and Responsibility of Stakeholders IT governance committee is responsible for overseeing and maintenance of existing IT infrastructure and business operations. In IT governance, there are different stakeholders engaged in myriad operations of a company. Stakeholders of a company functioning in IT governance comprise IT technicians, IT directors and board of directors. IT technicians are required to perform different IT operations in terms of managing IT infrastructure so that IT systems are designed and managed for effective business performances. IT directors are responsible for ensuring that business operations are conducted in accordance with the needs of an organization. Additionally, IT directors are also accountable for developing an appropriate IT architecture for systematic business operations in a controlled and cost effective manner. Last but not least, board of directors is entrusted with the responsibility of making decisions relating to IT and business perspectives so that business operations are performed with better opportunities (Agbamuche, 2008; Nolan & McFarlan, 2005). An Evaluation Program Fig 5: IT Governance Evaluation Program Source: (Abu-Musa, 2007) Companies should adopt IT governance evaluation program with the aim of ensuring that desired IT objectives are accomplished effectively. Companies should design IT evaluation program that would involve comparing the actual IT performance with the predetermined IT standard and based on the identified deviation, IT governance committee should make changes in IT infrastructure (Abu-Musa, 2007). References Abu-Musa, A. A. (2007). Exploring information technology governance (ITG) in developing countries: An empirical study. The International Journal of Digital Accounting Research, 7(13-14), 73-118. Agbamuche, J. (2008). How does the alignment of IT to business strategy affect the organisation of the IT function? Retrieved from http://mdh.diva-portal.org/smash/get/diva2:121408/FULLTEXT01.pdf CRUE. (2008). Governance of information technology in higher education. Retrived from http://www.crue.org/Publicaciones/Documents/Gobierno%20TI/FolletoITGovernance.pdf Gheorghe, M. (2011). Risk management in IT governance framework. Retrieved from http://www.management.ase.ro/reveconomia/2011-2/27.pdf Kearney, W. D., & Kruger, H. A. (2013). A framework for good corporate governance and organisational learning – an empirical study. International Journal of Cyber-Security and Digital Forensics (IJCSDF), 2(1), 36-47 Nolan, R., & McFarlan, F. W. (2005). Information technology and the board of directors. Harvard Business Review, 96-106. Racz, N., Weippl, E., & Seufert, A. (2010). A process model for integrated IT governance, risk, and compliance management. Retrieved from http://www.grc-resource.com/resources/racz_al_grc_process_model_balticdbis2010.pdf Read More