Richters IT Governance - Report Example

Richter’s IT Governance Overview Information technology and the use of information technology tools has crossed the stage it used to be described aspopular and is now at a stage it is described as necessary and inevitable (Gould, 2009). One phenomenon that has made the use of information technology particularly necessary in businesses and among companies is the new trend of globalization. The Levin Institute (2009) defines globalization as “a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology.” Indeed, the definition itself elaborates the role of information technology in globalization and the quest for businesses to go international. For a fast growing company like Richter who wants to ensure maximum global dominance, it is there duly appropriate that the company revisits information technology as an integral strategy for development and growth. Broadly, Salaam (2011) explains that information technology “is the use of computers and networks to store, process, and receive data.” With technological advancement and development however, the basic use and need of information technology has grown beyond storing and retrieving information. This paper therefore seeks to examine how the uses and benefits of information technology at Richter can be seen as an entire management procedure so that the company will be in a position to benefit from the total impact of its information technology program. Definition of Richter’s IT Richter’s information technology system can be said to be of two major systems or eras. The first era is the past era of information technology and the second system is the present system of information technology in use. Previously and thus in the past era, information technology could be described as haphazard. This is because there was no centralized strategy that controlled the operation of information technology systems of individual departments. Prior to 1992 for instance, “all departments were responsible for the procurement and management of their own technological needs.” Such a situation certainly does not make room for growth. This is because there is likely to be individualism among the need to push for the common development of information technology in the company. In the midst of the haphazardness, the company was ill-resourced in terms of the provision of technological tools. This is because most offices and staff members did not have their own personal computers. Indeed, such a makes the operations of the company very manual, tedious and difficult. Presently, the information technology can be described as developed though not advanced. Unlike before, there are coherence, centralization and initiative strategies that have largely contributed to development. Some of the initiatives that have come to stay over the years include the installation of different software to cater for the day-by-day administrative and managerial needs of the company. Some of the software includes document management system, the SAP business information warehouse as a financial reporting system, and the rollout of SAP in several subsidiary branches. Value of IT to Richter Information technology is very usual and important to all result oriented companies. Richter Company has for a long time proved that it is also part of the information technology revolution and that information technology is very useful and valuable to the company. Some of the steps taken by Richter Company that shows that they value information technology include the fact that there is a clearly defined strategy for the role that information technology plays in the company. In the previous era of information technology in the company, one major shortfall was the fact that there was not clearly defined strategy in play. Today, not only is there a clear strategy on information technology but there is also well defined roles that information technology is supposed and expected to play in the company. Even more, there has been a specially appointed person who takes over the affairs of information technology. This has largely come to centralize the functionality of information system in the company. Because there is a personnel in charge of nothing more than information technology, all people in the company know who to fall on for all information technology related issues and problems. Some more signs of value for information technology includes the fact that at Richter, there is a measure of how much is spent on information technology and the returns that the company makes is duly measured in the same manner. All these not withstanding, the company can still do a lot more to show greater value for information technology. For instance as it is done in other institutions and organizations, there should be structured governance system that ensures that what the company outs into information technology is duly maximized. IT Governance Style at Richter Information technology governance has always been an integral part of corporate governance. To a large extent therefore, the information technology governance style in place in a particular company is predicted by the general corporate governance style in place at the work place. Differences are seen only when the personality of the information technology manager is so powerful that it is able to overshadow what happens in other sectors of the organization (Gould, 2009). It is for this reason that Cantor and Sanders 2007) “The needs of the organization determine how the level and style of governance will be tailored” meaning that the information technology manager may choose to put up a different style from the general governance style of the company depending on what he wants of achieve. Having said this, it is right to say that the information technology style in place at Richter is the Suitability Principle. Cantor and Sanders (2007) explains that “the Suitability Principle states, "The needs of the organization determine how the level and style of governance will be tailored."” Due to the situation Szucs came to meet at Richter and the implementation visions he has for the company, he tailors his governance according to the needs he has identified in the company as far as information technology is concerned. Szucs is also very democratic though he has centralized the information technology system. He for instance includes international staff indecision making and he is able to manage this process so well. It is not for nothing that it is said that the people at the affiliates do not see his all-inclusive system as a conflict. IT for the Coming Year As indicated earlier, Richter has a developed information technology structure but it could be enhanced further to make it more advanced. This is said against the backdrop that ‘developed’ and ‘advanced’ are more relative to current pressing needs of the company. Because of this, what may be advanced today may not be advanced tomorrow. Szucs should therefore look for more innovative information technology systems that will meet the ever-growing nature of their company. These new systems should be able to easily network the functions of all affiliates to a central processing point to be controlled by Szucs himself. This new innovation would appropriately also cater for centralization and control of all affiliates. Again if this idea is implemented, the situation where networking exists only in retail shops of specific countries will be expanded. Finally, to reduce the managerial burden on CEOs of affiliates, which currently includes oversight responsibility of information technology, Szucs should either think of recruiting more specialists to cater for information technology in affiliate companies or train more personnel to take after him. This will make information technology governance in the company more organized and professional. REFERENCE LIST Cantor and Sanders. Operational IT Governance. IBM. 2007. Web. October 14, 211 Gould, G. E., Information Technology of Businesses. 2009. Tokyo: Alpha and Omega Press Levin Institute. What Is Globalization? Globalization 101. 2009. Web. October 13, 2011 Salaam L. What is Information Technology? 2011. Web. October 13, 2011 Read More