The Alignment of Business and Information Technology - Coursework Example

FINАL РRОJЕСT IТ & BUSINЕSS АLIGNMЕNT СK Name Institution Instructor Course Date Introduction The increased demand for integration of business strategies with information technology has increased due to increased market competition in different industries. The alignment of business and information technology is aimed at increasing the performance of the company in the global market (Calder, 2005, p. 37). Additionally, the increased innovation strategies in an organization demands the incorporation of corporate governance in order for the information systems to achieve the desired outcomes. As a result, many organizations implement different innovation strategies in their organizations, which are based on information technology. Most of these projects are aimed at integrating the business strategy with information technology in order to increase the chances of the company to perform better in the international and local market. According to Bowel et al (2007), information technology alignment, proper governance of the projects is required in order to achieve the desired outcomes (Bowen et al., 2007, p. 192). This is aimed at allowing the organization to meet its future needs inn information technology. Therefore, the governance of information technology in an organization is crucial in adding value to the company. According to Delgado et al (2012) governance of information technology projects in an organization allows the company to add value to its performance by investing on projects that are viable and proven (Delgado et al., 2012, p. 5). The management of information technology projects in any organization are governed by the standard which provides guidelines for adoption and implementation of information systems, which conform to the legal requirements of the country as well as the objectives, and goals of the organization. This paper focuses on the introduction of standards, which govern information technology projects in an organization in Australia. In introducing the standard, this paper will focus on the relevance of the six principles explained in the standard and evaluate their importance in governing information systems. Background Information on IT Governance Information systems governance involves the introduction of new techniques and procedures in the organization. These techniques and procedure ensure that the information technology project is in compliance with the strategies and policies of the organization as well as the legal requirements of the information and technology industry. The governance of information technology in an organization involves the mechanisms and techniques used in decision making and evaluation of information technology projects (Delgado et al., 2012, p. 3). The information technology governing tools are able to monitor the performance of the IT projects and develop mechanisms of improving the information systems. There are standards which are used in the governing the implementation of information systems in an organization. The standards act as guidelines to the management of an organization in making sound decisions regarding the adoption of IT enabled projects in the business organization, which will increased the performance of the company (Selig, 2008, p. 33). The Scope of the Standard The governance of information technology projects involves decision making by the board of directors, shareholders, and other stakeholders. In most cases, the implementation of these information technology projects is not guided by certain standard, which result into failures of the projects. This standard provides guidelines to the managers and owners of companies on proper governance of information systems in order to increase the performance of the company (Selig, 2008, p. 23). This is due to the changing responsibilities in management of information and technology projects in an organization. This standard aims at establishing the framework for improving the business performances in most of the companies in New Zealand and Australia. This standard provides guidelines to the management and department of information technology in an organization on how to govern their projects. This is aimed to reduce the risks and cost of operation as well as improving the efficiency of the organization. The standards provide various principles, which are crucial in management of information technology projects in an organization despite the fact that it does not specify the nature of management practices in the organization. In fact, the standard is not meant to provide alternative management practices but guide on the proper ways to make decisions when adopting information systems in an organization (Standards Australia/Standards New Zealand., 2012, p 5). Importance of the Standard in the company There is the need for companies to follow the guidelines and principles in this standard because the standard followed some guidelines during its development. For example, the standard has incorporated the AS/NZS ISO/IEC 38500, corporate governance of information technology, which is vital in governing IT enabled projects. This makes it easier for the company to use the standard without referring to other standards. In addition, the standard involved various stakeholders in its formulation. This means that it is not easy for any company that adopt this standard to fail to comply with industrial and government regulations in relation to information systems (Standards Australia, 2005, p. 12). Strengths of the Standard The standard is based on six principles of governance which offer guidelines in the adoption and implementation of information systems in an organization. These principles help the company management to align business strategy with the information and technology strategy of the company in meeting the future needs of the company. In addition, the standard was developed following the guidelines of other existing standards (Standards Australia/Standards New Zealand., 2012, p. 8). This means that it is the incorporation of various standards which are summarised in one document. Hence the organization does not need cross referencing of different standards in governing the same information technology project. The involvement of various stakeholders in the industry ensures that the standard will experience less resistance in introducing new projects in the company. This is because the standard takes into consideration the human behaviours in an organization (Kangas, 2003, p. 34). Weaknesses of the Standard Implementation of the standard requires an expert who understands the implications of the principles in the relevant industry. This is because the standard can be applied in different levels of organization and industries. This means that the standard does not specify the considerations that should be taken in different scales of operations. In fact, the standard is explains more on how to guide the management in making the best decision concerning the implementation of IT governed projects to bring success in the organization, but it does not explain how these governed decisions will influences the security of corporate data in the projects. In the governance of information technology projects, there is the need to project the possible outcomes of the technology and its future implication (Selig, 2008, p. 125). However, the standard provides the investment principle but does not elaborate more on the ways these principles can be applied in order to achieve the investment outcomes of the project. In addition, the standard advocates for termination of projects that are perceived to increase the risk of business failure rather than providing solutions in managing these projects in order to save the information technology system from failure. This is taking into considerations that there are resources which were used in developing the projects before the termination can be decided. Application of the Standard in Governing IT Enabled Projects I. The adoption of the new standard in an organization requires an evaluation of the current and future plans of the company in terms of information and technology demands. This will ensure that the future requirements of the company are established in order to project the performance of the company after adoption of the standard (Selig, 2008, p. 68). However, the adoption of this standard is easy since it is applicable for all scales of operations. This means that the standard can be applied in both small business organizations as well as multinationals. II. During application of the standard, it is necessary for the owners of the company to involve different stakeholders of the company. This is aimed at reducing the resistance that may arise from its implementations. Since the standard does not specify the management practice in the company, its application may require training of the personnel in order to understand the contents of the standard and its legal implications. This is by educating the stakeholders on the importance of the standard and the risks involved in adopting the standard. The application process may involve the cascading of management authorities and portfolio. The company management will have to conduct an in house training to all employees in regard to the new standard of governing the information technology projects. III. During its application, the management should understand the governance cycle involved in the application of the standard and the benefits of adopting the governed information technology in the business organization. During its application, the company management should come up with decisions that will facilitate the evaluation of the information technology and well as monitoring systems, which will ensure that the information technology project increases the performance of the company. These decisions will involve the delegation of responsibilities to various individuals in the company who are directly involved in the implementation of the standard in the projects. IV. The application of the standard in then organization will enable the company to conform to the legal requirements in relation to information technology. This is because the standard allows for all executive in the company to be responsible in making sound decisions in managing IT projects. In addition, the standard will be applied in the selection of projects and investments that are aimed at directly influencing the corporate governance of the company. In addition, the standard allows the organization to invest in viable projects, hence the implementation of IT projects that are risky and have an environmental and social impact to the communities and employees of an organization. If brought into the organization, the standard will be used to monitor, evaluate, prioritize and implement all the projects in the organization which are related to information technology. Advantages of the Standard The primary advantage that is brought by this IT governance standard is the maintenance of accountability for the risks and activities in an information technology project. The standard has various principles, which enables the management of the company to make sound decisions in implementation of information systems in the organization. This includes selection of information technology projects that are able to add value to the company performance (Standards Australia/Standards New Zealand., 2012, p. 14). According to this standard, the organization determines the most appropriate projects in the company. The management understands the roles of the projects in the context of information technology. The management is also able realizes the importance of decision making in terms of information technology projects. On any projects, there is the management responsibility of ensuring that decisions are made in reasonable time so that the projects. This means that the organization that adopts this standard prioritises their investments on information technology. This ensures that the executive makes decisions that are guided by the principles of the standard. This includes delegation on responsibilities, compliance with legal requirements on security and privacy issues of information technology projects and impact of the adopted technology on the human environment. Therefore, the standard allows the organization to focus on information systems that ensure customer satisfaction and improving the market share of the company. In addition, the standard allows the company to adopt decisions that evaluate and approves projects that are viable, the standard will reduce the implementation of risk projects and termination of those projects which are perceived to add no value to the performance of the company (Standards Australia/Standards New Zealand., 2012, p. 15). In aligning business strategies with technological advancement, there is the need for the company to evaluate its information technology architecture and determine its technology requirements for the future. This standard provides management with the ways in which it can align its business strategy with the information technology in improving business performance. Introduction of new technology in the company should consider the existing technology. This has the implication that the introduction of new technologies should consider the technology of the existing systems, and evaluate whether the company needs a whole new technology or there is only need to improve the existing technology tools. The management and implementation of information systems is governed by legal policies in a country. The standard ensures that the company conforms to the government legislation and regulations in terms of information technology application in the organization. This is because the standard will ensure that the company complies with the security standards in ICT use, health and safety of employees and staffs, privacy issues, the keeping of the client’s records and environmental regulations. Therefore, the company will stand at a better chance to comply with legal requirements since they are catered for in the principles of the standard. Moreover, the application of this standard in an organization will offer the management with information of clarifying the responsibilities of various stakeholders in the projects. This is because the standard offers the executive with a means of demonstrating the abilities in terms of decision making in regard to information technology adoption (Standards Australia/Standards New Zealand., 2012, p. 6). Risks Associated with Application of the Standard a) A competent management system is crucial in adoption and implementation of information technology projects as well as governance of these projects. Additionally, the adoptions of standards that govern these IT enabled projects require a system of management which is competent in making sound decisions (Wallace & Webber, 2012, p. 8). This is because the implementation of the principles in the standard requires one to make sound management decisions in the introduction of new projects in the organization as well as improving or introducing changes to the existing innovations in the company. Therefore, although the standard has many benefits, its implementation may cause more harm to the government especially small scale enterprises. This is because small and medium sized enterprise is not able to employ competent and skilled human labour. This implies that implementing the standard in small businesses may be risky (Standards Australia/Standards New Zealand., 2012, p. 11). b) In some cases, the implementation of this standard may not realise the benefits of it when the facilitators are not fully informed of the standard. This is because the information technology governance standard may be confused with sound management practices which may lead to poor implementation and governance of information technology projects. This implies that companies will not realise the desired outcomes that were projected when adopting the standard. Therefore, implementation of this standard requires proper evaluation of the principles in the standard and establishing what principles are applicable to the organization and which ones are posing risks in the organization (Standards Australia/Standards New Zealand., 2012, p. 10). c) In terms of responsibility, the standard requires that stakeholders should be informed earlier enough to make decisions regarding the initiation of projects. However, implementation of this project may result in varying reactions especially for stakeholders. This is because, the implementation of this standard require financial resources, which may affects the dividends of the shareholders. This will make it impossible for quicker decision making as required by the standard. Making quicker decisions in the company in regard to implementation of projects may result into conflicts between the management and the shareholders of the company. d) The implementation of this standard is too expensive and may risk the operation costs of the company (Standards Australia, 2005, p. 16). For example, if a company has already reached the compliance standard which are relevant in the industry, the implementation of this standard will risk the company performance since funds will be used to implement it hence resulting into increased operational cost. Measuring the Success of the Standard Measuring benefits of IT Projects: In determining the success of the standard when applied in governing information technology projects, the company may use measures that establish the effectiveness of the information technology systems. This is because a well governed information system will bring changes in the way operations are conducted in the organization (Kangas, 2003, p. 169). A poorly governed information system may not be able to realize the full benefits since it will be poorly managed. The company management may use this indicator to measure the success of the standard. This is through evaluating the performance of the information system before the adoption of the standard and after the standard (Standards Australia/Standards New Zealand., 2012, p. 16). The pre-evaluation and post-evaluation will ensure that the company determines the benefits that resulted from the adoption of the standard. Measuring effectiveness of IT Project: Additionally, one can measure success of the standard by evaluating the principles of the standard in relation to the effectiveness of the performance of the information system. A properly governed information technology project will operate as required since the personnel involved will know their responsibilities. This can be used to evaluate the success of the standard. This is done be conducting a pre-evaluation and post evaluation analysis on the information system. Since the standard advocates for a reduction in cost and risks of information technology projects, it is predicted that the implementation of the standard will ensure cost effectiveness in the use of the IT projects in ensuring the growth of the company (Kangas, 2003, p. 171). Asset utilization in IT projects: The business organization may determine the success of the standard by measuring the effectiveness of asset utilization using information technology. Shareholder’s Satisfaction: The success of the standard can be measured by determining the shareholder satisfaction on the quality of the information system which is governed by the standard. Shareholders are interested in ensuring that their investment is making the desired profits through adoption of new information systems in the company. The standard ensures that the management of the company invests only in information systems, which are able to add value to the company (Grembergen & Haes, 2005). Adjustments/Changes after Adopting the Standard Mission and vision: The organization should restructure its vision in order to accommodate the standard and its future requirements in terms of technology. The adoption of the standard requires that the company should align its business strategy with the information technology (Standards Australia/Standards New Zealand., 2012, p. 14). The vision and mission of the organization will have to reflect the future needs of the company in terms of technology use (Calder, 2009, 143). Company culture: The culture of an organization is necessary in adopting changes. This is because building a strong culture involves restructure the organization in such a way that it accommodates changes. This means that the introduction of the standard in the company will affect the organizational structure of the company hence the culture of the company. This is only applicable in cases where the organization has a different organizational culture from the one stipulated in the standard (Wallace & Webber, 2012, p. 24). Therefore, although there is the need to change the organization structure to make it more of a corporate governing body, there is the need to focus on the long term objectives of the company rather that what the information system can offer in the short term. This will ensure quality human behaviours inn the organization and governance of information systems (Juiz et al., 2012, p. 73). Conclusion and Recommendations The alignment of business and information technology is aimed at increasing the performance of the company in the global market. Additionally, the increased innovation strategies in an organization demand the incorporation of corporate governance in order for the information systems to achieve the desired outcomes. The governance of information technology enabled projects in an organization require standard that provides the management in formal decision making. This report recommends that the principles of the standard are applicable in the company and should be adopted in order to enjoy the benefits of information technology. This is because the adoption of this standard will ensure that the company implement only those information systems which are able to add value to the company and enhance business performance. Additionally, the report recommends that companies should evaluate the benefits of an information system before adopting it in order to implement only those projects that are viable. Therefore, the management of the company should set clear evaluation and measurement parameters in monitoring the success of the standards in order to avoid the risks associated with the application of the standard. References Bowen, P., Cheung, M., & Rhode, F., 2007. Enhancing IT governance practices: A model and case study of an organization's efforts. International Journal of Accounting Information Systems, 8 (2007), pp. 191–221. Calder, A., 2009. IT Governance: Implementing Frameworks and Standards for the Corporate Governance of IT. Boston: IT Governance. Calder, A., 2005. IT Governance: Guidelines for Directors. Boston: IT Governance Ltd Delgado, C., Marcilla, F., Calvo-Manzano, J., & Vicente, E., 2012."Project management and IT governance. Integrating PRINCE2 and ISO 38500, Information Systems and Technologies (CISTI). Proceedings from the 2012 7th Iberian Conference, pp.1-6 Grembergen, W., & Haes, S., 2005. Measuring and Improving IT Governance through the Balanced Scorecard. (Online). Available at < http://www.isaca.org/Journal/Past-Issues/2005/Volume-2/Pages/Measuring-and-Improving-IT-Governance-Through-the-Balanced-Scorecard.aspx> Accessed on 08-05-2013. Juiz, C., Gomez, M., & Barcelo, M., 2012. Business/IT Projects Alignment through the Project Portfolio Approval Process as IT Governance Instrument. Procedia - Social and behavioural Sciences, 65 (2012), pp. 70 – 75. Kangas, K., 2003. Business strategies for information technology management. Pennsylvania: Idea Group Inc. Selig, G., 2008. Implementing IT Governance: A Practical Guide to Global Best Practices in It Management. Zaltbommel: Van Haren Publishing Standards Australia/Standards New Zealand., 2012. AS 8016-2012 Governance of IT enabled projects. Standards Australia. Standards Australia, 2005. AS8015-2005 corporate governance of information and communication technology. Standards Australia. Wallace, J., & Webber, L., 2012. IT Governance: Policies and Procedures, 2013 Edition. 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