IT and IS Strategy Module Assignment - Case Study Example

Table of Contents IT & IS Strategy Module Assignment 2 Question 1 2 Information Systems & Information Technology Strategic Plan 2 Active and Passive IS/IT Strategy 5 IT Governance 5 Role of the CIO in IS/IT Strategy and Corporate Strategy Alignment 7 Question 2 8 Ownership of IT/IS Strategy at Ferrari and Formula One 8 Reasons for Outsourcing IT&IS Strategy 9 Consequences of Outsourcing Strategic Control within an Organization 12 Question 3 14 Ideal Approach to an IS/IT Strategy for Ferrari and Formula One 14 Theory behind the Strategy 15 Context 17 Infrastructure 18 SWOT Analysis 19 Implementation Plan 21 References 23 IT & IS Strategy Module Assignment Question 1 Outline the main components (and stages) of an Information Systems and Information Technology (IS/IT) strategic plan. Explain, with examples, what is meant by ‘active’ and ‘passive’ IS/IT Strategy; and indicate the main issues driving the need for IT governance? Who are the main individuals concerned with IT governance; and what positions do they normally hold in the organization? What role does the Chief Information Officer (or equivalent role) play in aligning IS/IT strategy to normal corporate strategy? Information Systems & Information Technology Strategic Plan Strategic IT/IS Plans are used by businesses to provide for a forward thinking approach regarding the management of information technology and related systems in a business. Small level businesses often do not have a separate IT/IS Plans and instead employ is as part of business strategic planning. Large conglomerates, and those companies involved in large scale operations, manufacturing, communication industry with generally a high level of reliance on IT tend to employ the IT/IS Plan as an integral part of their business, often planning for it separately as a different functional activity of the business. The IT/IS Plan is a systematic documentation, evaluation and planning tool that enables the company to highlight the current position of the company while allowing the business to set strategic objectives with the procedures of attaining the position of the set objectives made possible through documented policies and guidelines (Basahel and Irani, 2010). A IT/IS Plan is made up of the following components The strategic mission and vision statements of the company The prevalent values in the organization An analysis of the stakeholders A SWOT analysis Action plans and their associates goals, and strategies Performance indicators Strategies for monitoring and evaluation The strategic mission and vision statements of the company included in the IT/IS Plan can be those that are specifically set of the IT and IS business function or they can also be more general derived from the company’s mission statement and overall vision towards the future. Similarly the organizational values that are included in the IT/IS Plan are those which are prevalent in the organization as depicted through the organizational culture. In come cases culture in an organization can differ in terms of business function, and in this regard the IT function organizational culture is also relevant along with the overall company values and culture. A stakeholder analysis is conducted in order to identify the business units and partners effected by the IT/IS strategy while providing for their role in the IT/IS Plan. Through the SWOT analysis, the strengths, weaknesses, opportunities and threats faced by the company and its technological environment are analyzed to identify any discrepancies, problems, or stagnant areas. The IT/IS Plan then involved identification of the respective goals, objectives as well as strategies that are provided for by the action plans for the IT/IS strategy of the company. The action plans are smaller in tenure and scale as opposed to the overall strategy. A monitoring and review strategy is then assigned to the different performance indicators that are employed by the company to assess the performance of the company relative to competitors a well as internal controls (Turban and Volonino, 2011). The stages of the IT/IS Plan with which they are prepared fall into three main phases. These correspond to the preplanning phase, the planning phase and the development and presentation phase (Fergersen). In the preplanning phase discovery strategies are employed through research. The planning phase involves the continuous process of plan making and reconsideration of existing plans. The plan development phase pertains to the finalization of the plan and its documentation and then presenting it to the stakeholders. The strategic planning process provides that the strategic plan can be divided into 4 main levels, the top one being the strategic level plan providing overall strategy and direction along with goals and objectives. The second level pertains to the IT strategic plan for long range. The consequent level include the medium range IT strategic plan, and the Tactical plan. At each of the last three stages, planning is done for resource requirements, sourcing strategies, budget management making with sequences of related activities and time management Active and Passive IS/IT Strategy Active IS and IT strategies are those strategies that are future oriented and forward thinking in nature. The external environment of the business, specifically the developments taking place in the technological environments significantly impact the active strategy, as the active strategy seeks to incorporate potential future changes at the current level to provide for broad level applicability which does not become redundant and outdated quickly. The active approach to IT and IS strategies enable the company to be proactive and employ a future oriented approach to their system development, selection, information system management, its protections as well as derivation of methods in which IT and IS can be effectively and efficiently employed in the long run to provide sustainable comparative advantage. The passive strategy on the other hand can be considered slow or redundant as businesses employing a passive strategy for their IT and IS do not respond to potential changes in the environment in a proactive manner. They either utilize defensive or responsive implementation strategies or tend to employ a conservative approach towards their IT and IS management. IT Governance IT governance is often depicted as a subsection of the overall corporate governance employed at a company or an organization. IT governance specifically is involves the ensuring of the investments made by the organization in the information technology and systems in place to be assessed for their full value delivery. IT governance is actually a structured and systematic approach taken to align the organization’s IT/IS strategy to its overall corporate business strategy (Weill and Ross, 2004). The guidelines of IT governance indicate how an organization can keep on track in terms of its alignment of its respective IT/IS and corporate level strategy. Accountability of the shareholder’s interest is ensured along with the evaluation of the strategies with measurable results that can be assessed and compared for trends over a period of time. IT performance management is a sub section of the IT governance. Which takes into account the performance of the IT and IS in place at the organization and their reliability in terms of performance levels. The management of IT performance involves three broad tasks which include the verification of the strategic IT objectives in place in terms of their attainment, a review of the overall IT performance and the assessments of the IT in terms of how it is contributing to the business. These are highlighted in a structured approach through the IT governance framework employed by businesses. IT governance should essentially provide a strategic direction for the IT and IS in the organization, while enabling the business as well as the related stakeholders to earn the maximum value possible from it. IT governance provides for effective and efficient risk management where adequacy is ensured and management of the IT and IS resources highlighting the direction of sources and resource employment methods. The performance management aspect of IT governance on the other hand provides for assessment of the IT and IS strategy for compliance purposes and highlights achievements of set objectives There are a number of reasons due to which organizations are made to have a formal IT governance framework active in their businesses. Organizations are often required by regulations and compliance requirements to implement IT governance for their IT and IS infrastructures in place. Government regulation, legislation as well as even accounting and business acts like the Sarbanes-Oxley Act of 2002 require businesses ton have a formal IT governance framework in place. Role of the CIO in IS/IT Strategy and Corporate Strategy Alignment When it comes to the IT and IS strategy and the alignment of this strategy with the corporate strategy in place at an organization often a wide rift is observed between the technology experts, and those who may be proficient in management but have little knowledge about the technological aspect of the business. The CIO are a useful top management resource that can help in communicating and ensuring that the IT/IS strategy and the corporate strategy of the business are effectively aligned (Swartz, 2007). The CIOs are in a unique position with the technology division of the business as well as the senior management at the organization, enabling them to perceive data and systems integrated with management instead of separated by the digital divide. Specifically when it comes to determining the opportunities that can be utilized to reap benefits and the risks that need to be efficiently managed the CIO can play an important role in identifying the corresponding strategic as well as tactical level action plans that can be employed. In addition it also needs to be noted that technology implementation, and investment involves support form the top management. The CIO’s here can ensure that all the relevant indicating potential proposals for technology based investments are made available to the respective senior managers, and discussion based dialogue is conducted regarding the cost and benefit of investment and the corresponding ROI (Nash, 2011). The recent recessionary pressures have made it necessary for CIO to prove their mettle while. The future for the role of the CIO in IT governance and IT and IS strategy alignment with corporate strategy pertains to identifying how organizations can be more innovative in being efficient through new technologies and making it possible for such technologies to be effectively implemented to reduce the risks and costs involved for the business. Question 2 How does ownership of IS/IT Strategy occur in your own organization? Further outline and critically analyze the major reasons why organizations are increasingly outsourcing as part of there is/IT strategy? What are the consequences of outsourcing on strategic control within an organization? Please provide examples from your own experience. Ownership of IT/IS Strategy at Ferrari and Formula One Ferrari is one of the notable names amongst racing. The brand of the company is an established one founded by Enzo Ferrari. The Italian car manufacturing company specializes in manufacturing racing cars and street credible super cars aimed at the luxury automobile market. The company has a long standing role in the formula one where it participates with its designated drivers and racing machines under the banner of Ferrari. The company was originally launched in 1929, by Enzo Ferrari under the name of Scuderia Ferrari, however in 1960s the company went under a takeover proposition by Ford. However the takeover did not pan out and instead in 1969, Fiat took the leading control in the company with 90 percent stake, while Enzo Ferrari retained a 10 percent stake for the founding family. Due to the distributed structural ownership of the company, the management of the company is also partly owned with the respective stakes. The ownership of the IT and IS strategy at Ferrari and for its association with Formila One resides primarily with the CIO, and the CEO of the company. A separate technical developments, R&D and information Systems Support departments are resident in the company, and these are also the direct stakeholders for the IT and IS strategy. However as the IT and IT strategy is developed at the top level of the management, the head of the IT/IS division along with the CIO and the CEO are responsible for setting the mission, vision and corresponding strategic objectives for the IT/IS strategy. The strategy’s rollout plan is implemented by the CIO being the sponsor, while the IT department’s managers being responsible for the implementation of the strategy. Reasons for Outsourcing IT&IS Strategy When it comes to IT&IS Strategy, there are two main options available to a business. A business can either seeks to employ an in house built IT and strategy or instead outsource the IT and IS strategy to third party acting as a technology partner. It is however possible for a company to in part outsource its IT development and strategy, while retain a percentage of it for in house development and control as well (Elliott, 2005). Developments in the communications technology over the past few years, and supportive development in the management of IT and IS through virtual platforms on the word wide web enable for dynamic strategy employment by company when it comes to their IT&IS strategies. The cloud computing platform specifically the SaaS provides this capability to business. Existing companies like Amazon and Google already provide services for outsource cloud computing based management of IT&IS. One of the main reasons cited by business and managers for outsourcing either their operators of their IT&IS is the opportunity to get the same work done through a third party technology partner at lower costs (Turban and Volonino, 2011). The third party outsourcing service providers have unique specialization in their field which enables them to get the same work done in a much more efficient manner while saving significantly on costs. Moreover the technical expertise present with these partners are significant compared to the businesses as the businesses have a diverse range of functions to perform while the service providers are focused towards the operations, management and control of the IT&IS only. This makes them highly proficient in their field. Businesses can also seek to outsource where there is limited skill in the organization to handle the IT&IS strategy or the company can better spend the funds it currently has invested in the IT&IS to other more profitable ventures with a higher ROI. In some cases companies also seek to outsource in order to avoid the regulations associated with management of the IT&IS strategy in different geographic locations across borders and to employ the government mandated benefits like reduced takes through the utilization of the outsourcing strategy. When employing the strategy for outsourcing, it is important for businesses to realize, that while they can outsource their IT&IS operations, functi8onality and strategy for management, implementation and execution to a third party acting as a technology partner, they cannot be effectively rid of the responsibility that that exists for the IT/IS strategy. The main reason for this is that wherever a problem is incurred with the IT or IS or a failure occurs, the stakeholders and the regulatory authorities look towards the CEO of the business as the responsibility is retained by the CEO and senior associated management like the department head and the CIO when it comes to such incidents. The business as a result has to have a strong chain of command and control in place with its BPO service providing technology partner. Farrari operates in a competitive automobile industry which is governed by rapid changes in technology. Especially regarding its role and position in the Formula One, the company has to be highly innovative and respond proactively to potential changes in the market with respect to its IT&IS strategy supporting and being aligned with the business strategy. The company therefore employs a number of outsourcing partners for technology, information systems and technology as well as engineering. The list of the outsourcing service providers for Ferrari is exhaustive. Some of them include PTC, Ricardo, CRF, General Electric, AMD, Acer, Shell, SKF MIT and TCS. The advantages that have been observed through outsourcing of IT, technology and engineering to the technology partners have been significant reductions in the operating costs as well as reduction in the time it takes to innovate. The innovations is most strongly effected by the outsourcing strategy as the collaborating outscoring partners work together to innovate information technology solutions for the company and its Formula One participation which translate into better cars being made which are more safe and higher performing. It has become much easier to test prototypes of cars due to facilitated innovations through the IT&IS in place at the company. This is significantly important given the nature of the industry Ferrari operates in the constant changes that it is plagued by in its external environments. Consequences of Outsourcing Strategic Control within an Organization As depicted earlier, organizations need to be prudent and employ critical thinking regarding their decision to outsource the strategic control over the IT&IS of their business. One of the main problems that is observed by business when they outsource the control of the IT&IS function is the discrepancy in the management of the processes in the company (Turban and Volonino, 2011). IT&IS are support functions which support the other functions in the business. When employing outsourcing often a time lag or a barrier comes in place between the other functions and the IT&IS which has to be mitigated through investment in communicative technology. Aside from this the quality of the service also needs to be ensured through contracts targeting the IT&IS qualities in terms of their reliability, availability, consistency and integrity. Where outsourcing involves call centre and CRM based outsourcing, the regional accents can be problem some if the outsourcing partner is located in a significantly different location from the customers of the company leading to linguistic differences between the customers and the CRM staff. This can adversely affect the image and the perception of the business in the market and in the minds of its customers (Elliott, 2005). Aside form this where outsourcing involves offshore outsourcing, the finances and profitability of the business is significantly influenced by the economic condition prevalent in the host country of the BPO service provider. Another reason why outsourcing can be problem some if not managed properly is the increasingly important issue of managing security. When the IT&IS is internal, security management is confined and therefore risks are reduced. However where the IT&IS comprises of sensitive information of proprietary nature and the processes involved are complex, security needs to be ensured so that the information does not get in the hands of adversaries. In the recent years security management has become most important and is one of the most difficult functions of the IT&IS to manage both internally as well as for outsourced IT&IS. Ferrari faced problems in the outsourcing of the data centre services with AMD where the information was often not retrievable at selected times of the day. This led to chaos in the day to day operations, especially in the functions where daily monitoring is conducted for operations and processed against historical data. The lack of service at times caused frustration almost the employees and caused delays in reporting which in turn delayed business decision making. The problem was persistent for two days, after which the source of the problem, a code incompatibility over the communication network was resolved. Question 3 From the theory you have acquired from the course, this is an opportunity to put the theory into practice. Provide a 5 to 7 page report (‘IS/IT Policy Document’) outlining the ideal approach to an IS/IT Strategy for your organization; or an organization that you are familiar with from your own past experience. The strategy should outline the context of the organization; the IS/IT infrastructure; a SWOT/PEST analysis of the IS/IT infrastructure and competitive environment; and a plan for implementing, monitoring and reviewing the IS/IT Strategy within your chosen organization Ideal Approach to an IS/IT Strategy for Ferrari and Formula One The nature of the operations of Ferrari with respect to its division for Formula One racing is one of the determinants of the IT&IS strategy that can be employed by the company. The company retains a strategic top position in the industry and the racing market for having the most wins. It is therefore the main strategy of the company to retain this position while strive for increased competitiveness and innovation in its Formula One participation. In fact formula one is till date the focus of investment and innovation for Ferrari. The level of integration the company enjoys with formula one is a competitive advantage reaped by the company as it is the only company that designs as well as manufactures the engine of the racing car as well as its chassis. The car design cycle is up to 9 months comprising of 6 months devoted to designing and 3 months devoted to manufacturing. The IT&IS requirement of the company is to support the Formula One business while aiding in meeting the time frames. Formula One is also important to Ferrari as the technology that is tested and rolled out in the races, ultimately makes its way down to the commercial street cars that the company manufactures. Some of the technologies that have been transferred through this route include disc brakes, independent suspensions as well as shifters based on paddles. Due to the significantly important nature of the business, and the strategic role that Formula One plays for Ferrari it is recommended that a combined approach of in-house as well as outsourced IT&IS strategy should be employed. This is to allow for faster processing and more efficient operations of the company. Theory behind the Strategy The strategy is based on alliances being made for the purpose of product development with suppliers as well as industry experts. The collaborative strategy taken for this purpose falls under the category of Strategic Alliance of expertise for Value Managed Relationships at Ferrari and Formula One (Dyer et al., 2001). A working relationship is created between the collaborating partners where mutual benefits are highlighted while value addition is provided to the find product which in this case is the Formula One car. The benefit of the strategic alliance between the outsourcing partners and Ferrari is that it reduces the costs for the project with the shared knowledge. In addition it also provides access to new technology while inhibiting competitors. The cycle time for the product innovation and development is reduced while the over quality and R&D efforts for the product are enhanced through this approach. As per the procedure provided by Earl for value addition and generating competitive strategies (Earl, 1986) the following diagram depicts the IT/IS strategy for Ferrari at Formula One for staying competitive and retaining its strategic position. Earl’s Procedure of Value Addition for Generating Competitive Strategies The diagram depicts that through alliances and innovation with suppliers and industry experts the company employs an offensive strategy of staying competitive while targeting new channels through which strategic advantage can be attained. Context The context for the IT&IS strategy selected for the purpose of this project is the strategy for communications between the channel partners and engineering technology partners of Ferrari, the Ferrari company and the Ferrari Formula One development team and in race communication and IS requirements. The main partners for Ferrari in Formula one include companies like Shell, Ricardo, CRF, SKF, MIT and Tata Consulting (TCS). TCS which is India’s largest software company has been assigned an outsourcing contract by Ferrari for the IT and engineering associated IT/IS support for its Formula One engines. This involves aspects ranging from electronics of the racing car engine to the safety, its aerodynamics as well as troubleshooting capability. The company needs to work with these outsourcing partners for the information technology needs relating to the following aspects of Formula One. Telemetry: This involves collection of car performance data in the real when the race is actually taking place. This involves technical information with up to 500 characterizes being measured and asses in the real time. Engine Design: The objective here is to reduce the weight of the engine to facilitate speed and power. In this regard the company needs to communicate with its outsourcing technology partners highlighted for prototype development, testing and development of the final product. Chassis Design: The objective here as well is engine reduction while taking into account down force and aerodynamics as well as safety during race. Here again the needs to communicate with its outsourcing technology partners highlighted for prototype development testing and development of the final product. Infrastructure As the IT/IS strategy employed for the Ferrari Formula One racing car development is a combination strategy based on engineering and IT outsourced to independent BPO apartments and the manufacturing conducted in house with corresponding in house IT for manufacturing and testing of the car. The relevant infrastructure on a very broad level would involve the following Datacenters and data repositories will be required to keep the data resulting from engineering and operations activities and that gleaned from research and development of the prototype. These data centers will be housed with the BPO technology partners as well as Ferrari with interconnected sharing. Dedicated communication links through VPNs as well as web based communication portals would be required. These would be employed to communicate data between the technology partners and Ferrari. Integrative Application Software for manufacturing and supply chain management would be required in the application layer of the infrastructure. Multiple workstations as points of access would be required at the respective ends of all technology partners and Ferrari. Proprietary in house Formula One compliance assessment software and technology would be employed by Ferrari at their end for the evaluation of metric ad compliance of the race car to the specifications of the Formula One. SWOT Analysis The following depicts the SWOT analysis of the IT strategy for the proposed for Ferrari at Formula One. Strengths: Costs associated with development, production and management of IT/IS will be reduced Integrative input from experts in respective aspects of the development and engineering will be acquired based on IT and IS solutions which otherwise would not be possible in house Faster processing of the car which can reduce the care manufacturing cycle from 9 months to potentially 8 months More efficient business operations and faster decision making due to faster results Being more competitive in Formula One compared to competitors Weaknesses: Loss of control of data with distribution amongst technology and IT/IS partners Increased costs of security management More efficient communication network setup required Management of time for operations with technology outsourcing to BPO service providers in different geographic locations spanning United States to Europe to India Increased pressure on collaborating personnel to meet deadlines and get work done without exceeding the limit Opportunities: Provide for potential development of super cars and Ferrari street cars using the same IT/IS strategy Reduced development and production cycles for Ferrari street cars Potential platform for more integrated collaboration with suppliers, technology partners and BPO service providers. Threats: Sensitive information like the car design can get leaked Time lag in one IT/IS component can effect the entire production cycle Data corruption at the BPO end can lead to data loss that might not be available elsewhere The networked approach will make Ferrari IT&IS vulnerable to third party malicious attack especially over the world wide web Implementation Plan The implementation plan for the IT/IS outsourcing for the company would involve the following: Requirements Assessment: Ferrari would undertake a requirements assessment at each level of the IT/IS support task that is being outsourced regarding Formula One car development. The expectations of the Formula One development and management team will be mapped out with the respective managerial and communication requirements that will be supported by the DSS and the IT/IS strategy. [Time: 2 months] Planning Activity: The actual planning would be undertaken with the Formula One Design team member at Ferrari being the Project Head and the CIO being the Project Sponsor with contract development for technology and outsourcing partners [Time: 2 month] Risk Management: Identification of relevant risks will be performed along with development of mitigations strategies through close collaboration with the BPO service providers and the technology partners. Their input and independent risk management strategy integration is especially required due to sensitive nature of IT and data involved. [Time: 1 month] Issue Management: An issue calling, logging, reporting and resolution strategy would be developed whereby any issues at the BPO and technology partner end would be communicated to the Ferrari Formula One Management. [Time: 1 month] Prototype Testing: Changes can be proposed at this point for which a need arises after the assessment at the prototype phase [Time: 1 month] Rollout: Execution of the proposed IT/IS Strategy of combination outsourcing [Time: 2 months] Monitoring, Reviewing and Reporting: Feedback on the results, any prevalent issues or any highlighted problems that still need to be resolved. Performance reviews, and reporting for management to be conducted [Time: Initial 6 months integrated monitoring, then continuous supervisory monitory] References 2008, Case Study: The Path toward Pervasive Business Intelligence at Ferrari North America, Tableau Software, available at About Ferrari, Ferrari Corporate Website, available at Basahel, A.B., Irani, Z., (2010), Examining the Strategic Benefits of Information Systems: A Global Case Study, European, Mediterranean & Middle Eastern Conference on Information Systems 2010, UAE: Abu Dhabi Dyer, J..H., Kale, P., Singh, H., 2001, How to Make Strategic Alliances Work, Sloan Management Review, pp. 37-43 Earl, M.J., (1986), Formulating Information Technology Strategies, Oxford University Press Elliott, G., 2005, Global Business Information Technology: An Integrated Systems Approach, Pearson Addison Wesley Fergerson, B., Capstone Report: Key Stages of Strategic Information System Planning (SISP) Methods and Alignment to Strategic Management Planning Concepts, University of Oregon Ferrari Outsource Some Engine Development, Car and Driver, available at GES Racing Department, Ferrari Corporate Website, available at Nash, K.S., 2011, Risk Management: A CIO’s Strategic Role, CIO.com, available at Ribeiro, J., 2008, Ferrari signs Indian outsourcer for F1, IDG News Service, available at Shell’s technical partnership with Ferrari, Shell Global Corporate Website, available at Swartz, K.D., 2007, IT Governance Definition and Solutions, CIO.com, available at Turban, E., Volonino, L., 2011, Information Technology for Management: Improving Strategic and Operational Performance, 8th Ed., John Wiley and Sons Weill, P., Ross, J.W., 2004. IT governance: How top performers manage IT decision rights for superior results, USA: Harvard Business School Wilkin, C., Carpa, N., 2012, Strategic Information Systems Planning: An Empirical Evaluation of Its Dimensions, Journal of Technology Management and Innovation, Vol. 7, Iss. 2 Read More

The stages of the IT/IS Plan with which they are prepared fall into three main phases. These correspond to the preplanning phase, the planning phase and the development and presentation phase (Fergersen). In the preplanning phase discovery strategies are employed through research. The planning phase involves the continuous process of plan making and reconsideration of existing plans. The plan development phase pertains to the finalization of the plan and its documentation and then presenting it to the stakeholders.

The strategic planning process provides that the strategic plan can be divided into 4 main levels, the top one being the strategic level plan providing overall strategy and direction along with goals and objectives. The second level pertains to the IT strategic plan for long range. The consequent level include the medium range IT strategic plan, and the Tactical plan. At each of the last three stages, planning is done for resource requirements, sourcing strategies, budget management making with sequences of related activities and time management Active and Passive IS/IT Strategy Active IS and IT strategies are those strategies that are future oriented and forward thinking in nature.

The external environment of the business, specifically the developments taking place in the technological environments significantly impact the active strategy, as the active strategy seeks to incorporate potential future changes at the current level to provide for broad level applicability which does not become redundant and outdated quickly. The active approach to IT and IS strategies enable the company to be proactive and employ a future oriented approach to their system development, selection, information system management, its protections as well as derivation of methods in which IT and IS can be effectively and efficiently employed in the long run to provide sustainable comparative advantage.

The passive strategy on the other hand can be considered slow or redundant as businesses employing a passive strategy for their IT and IS do not respond to potential changes in the environment in a proactive manner. They either utilize defensive or responsive implementation strategies or tend to employ a conservative approach towards their IT and IS management. IT Governance IT governance is often depicted as a subsection of the overall corporate governance employed at a company or an organization.

IT governance specifically is involves the ensuring of the investments made by the organization in the information technology and systems in place to be assessed for their full value delivery. IT governance is actually a structured and systematic approach taken to align the organization’s IT/IS strategy to its overall corporate business strategy (Weill and Ross, 2004). The guidelines of IT governance indicate how an organization can keep on track in terms of its alignment of its respective IT/IS and corporate level strategy.

Accountability of the shareholder’s interest is ensured along with the evaluation of the strategies with measurable results that can be assessed and compared for trends over a period of time. IT performance management is a sub section of the IT governance. Which takes into account the performance of the IT and IS in place at the organization and their reliability in terms of performance levels. The management of IT performance involves three broad tasks which include the verification of the strategic IT objectives in place in terms of their attainment, a review of the overall IT performance and the assessments of the IT in terms of how it is contributing to the business.

These are highlighted in a structured approach through the IT governance framework employed by businesses. IT governance should essentially provide a strategic direction for the IT and IS in the organization, while enabling the business as well as the related stakeholders to earn the maximum value possible from it. IT governance provides for effective and efficient risk management where adequacy is ensured and management of the IT and IS resources highlighting the direction of sources and resource employment methods.

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