Governance of Information Technology Enabled Projects - Assignment Example

GOVERNANCE OF IT ENABLED PROJECTS Name Institution Instructor Course Date Introduction The alignment of the information technology and information systems with the strategic business plans of organizations has increased in the past few decades. This is due to the increased demand to use technology in improving the performance of the business. 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. In business and information technology alignment, proper governance of the projects is required in order to achieve the desired outcomes (Bowen et al., 2007, p. 192). The alignment of the information technology with the business strategy allows the organization to meet its future information technology needs. Therefore, the governance of information technology in an organization is crucial in adding value to the company. The governance of information technology projects requires a certain mechanism which is crucial in ensuring that the introduction of information technology in the organization ids properly managed (Chen, 2010, p. 10). The arrangement in information technology government enables the management of an organization to formulate the necessary policies and procedures in the implementation of projects and monitoring their outcomes (Juiz et al., 2012, p. 71). This paper focuses on the introduction of standards, which govern information technology projects in an organization in Australia. This report focuses on the six principles of the standards and recommends to the organization on why they should or should not follow the standard in governing their projects. The IT Governance Process- Overview The governance of information systems involves the selection of IT projects after a prior evaluation of the financial assessment and risk assessment involved in the management of the project. This means that the IT governance tools should be able to monitor the performance of the IT projects and develop mechanisms of improving the information systems (Calder, 2005, p. 19). Therefore, 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. Therefore, needs to include standards in governing information technology projects is necessary to ensure conformance of the projects with strategies and policies (Juiz et al., 2012, p. 73). The Scope and Purpose of the Standard Most organizations are not aware of the changing roles in management of information technology and the adoption of new technology in their organization. This is because most of the managers of IT projects in these organizations do not follow laid down standard in managing their projects. In such cases, most of the IT enabled projects end up as failures and increase the running costs of the organization resulting in poor performance (Calder, 2005, p. 20). Therefore, there is the need to adopt new standards in governing information technology projects in a company. 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 in order to reduce the risks and cost of operation as well as improving the efficiency of the organization. Although the standard does not specify specific management practice, it provides the organization with principles which are necessary in ensuring proper management of information technology projects in order to achieve business performance and success (Grembergen & Haes, 2005). Therefore, the organization should follow the standard in governing its information technology projects due to the following fact: The standard has incorporated other standard hence there is no need for the company to refer different guidelines from various standards. For example, the standard incorporated the AS/NZS ISO/IEC 38500, corporate governance of information technology, which is vital in governing IT enabled projects. The standard was drafted with knowledge of the existing Australian regulations and laws that govern information and technology projects. This is in terms of information privacy and security. The development of the standard is a representation of various thought from different committees in the information technology sector. For example, the standard was developed in the presence of computer committees of both New Zealand and Australia, company directors, consumer federations, auditors of various corporations and industrial groups. This means that implementing the standard will not violate any interest of any group in the market since they were also involved in the development of the standard. Principles of the Standard The standard consists of six main principles which have different applications in the organization. These principles are applicable but at different contexts depending on the scale of operation. The first principle argues that the management of a project requires sound decision s which should be made in a transparent and accountable manner. This principle is applicable on any project. Additionally, there is the need for companies to adopt a strategy which aligns the company technological requirements withy the company strategy. There is also the need for companies to comply with the legal requirements especially those that concern the privacy of information systems. Moreover, information systems should focus on improving the business performance in order to attain the objectives of the company. Therefore, the principles which are applicable to all scales of operations include responsibility, conformance and strategy. However, the investment and human behaviour principles are dependent on the scale of operation and management t practice. Therefore, although the standard introduces six principles the application of these principles depend on the management practice of the company. Strengths of the Standard The standard was developed from the guidelines of various standards that are already in the application. These include the corporate governance of information technology, Governance of IT – Framework and Model, and Guidance on project management. This means that the standard is able to provide guidelines on the responsibility of the management in decision making regarding information technology projects. This includes deciding on what projects to implement and what projects to terminate in the organization. This is useful in reducing the operational costs and risks associated with implementing a project which has less value to the organization. A company that adopts this standard will be able to experience less resistance in introducing new projects in the company. This is because the standard takes into consideration the human behaviours in an organization. The standard also includes governance of information technology project models. This model helps the management of a company in evaluating the importance and benefits of governances in information technology projects. In fact, they models in this draft argues that the management of any company should govern their project through evaluation of its current information technology application and the future requirements in terms of technology. In this way, the company, will be able to prioritise its projects and make the responsible decision in implementing those projects that have greater value to the company. In addition, the standard ha included six principles, which act as guiding principles to the management of the company in governing their projects. 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 (Standards Australia/Standards New Zealand., 2012, p. 14). Weaknesses of the Standard Despite the fact that the standard has explained the principles which are necessary in governing an information technology enables project, the application of these principles require extra resources and assets. In addition, the implementation this standard in an organization may not be applicable since some of the principles may bring disagreements in the organization. For example, the introduction of new technology may seem a threat to those employees who are not able to use the technology. These employees may see the introduction of the new technology in the company as a way of denying them job opportunities. In such cases, it makes it difficult for the management to apply the principle of human behaviour despite the fact that it is crucial in governing their projects. Moreover, the principles in the standard do not clearly describe the person who makes the influential decisions in the business in order to achieve the desired outcomes. Another weakness of this standard is that it does not stipulate the ways in which theses governed information technology projects will be managed in order to ensure the security of the information in the organization. Most of the implemented information technology projects tend to use technology that exposes the vital information about the company to other third parties. This information may be used by the competitors in outwitting the performance of the company as well as encourage corporate fraud and computer crimes. 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 (Standards Australia/Standards New Zealand., 2012, p. 13). Application of the Standard The application of this standard requires the company to evaluate of its current and future needs in terms of information technology. The standard is applicable to all companies of any size despite its general applications and principles. During its application, the company will have to determine the requirements that are necessary in the success of the information systems. The stakeholders should also be involved in the adoption and application of the standard in the company (Standards Australia/Standards New Zealand., 2012, p. 11). 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 (Moeller, 2013, p. 161). This includes training the employees in the information system on their responsibilities and contribution to the success of the standard. This will ensure that the company does not get any resistance in the application of the standard. The standard will be used to ensure that all information technology projects in the organization are conforming to the legal requirements, and the 0only those projects that are viable are given priority. This will reduce 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. 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 (Bowen et al., 2007, p. 199). The Benefits of the Standard In governing the information technology projects in the company, this standard has a lot of benefits if adhered to. In following the principles of the standard, the standard ensures that the company is able to prioritise its IT projects. 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. This is through proper guidance of good management decisions which are based on the six principles. According to this standard, the organization determines the most appropriate projects in the company. The management is able to understand 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 good time so that the projects (Standards Australia/Standards New Zealand., 2012, p. 7). Therefore, the management has the responsibility to determine those projects which have greater value to the company. These include the projects that directly relate to consumer satisfaction. Since the standard provides for this principle, it is applied in an organization. The dynamics in the use of technology results in changing technological architecture in an organization. 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. Therefore, the strategic planning of the organization is catered for by this standard. The standard explains that the organization should be able to align its policies in order to support the ongoing requirements in introducing new technologies. 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. In addition, the standard ensures that the various stakeholders are involved in the in the introduction and implementation of new technologies in the company. This because in any organization, the introduction of new technology should involve all the stakeholders so that during implementation, the technology does not face resistance. This is in line with the standard which focuses on the respect to human behaviours. In demonstrating respect to human behaviour, there is the need to follow this standard in order to involve all the stakeholders and employees in developing projects. The implementation of this governance standard in the organization will help the company directors and management committee to clarify the governance of information technology projects from the top managers to subordinate staffs. This is because the standard offers directors of projects with a means of demonstrating their ability to govern information technology projects. This is specifically stated in the responsibly and conformance principles of the standard (Standards Australia/Standards New Zealand., 2012, p. 6). Risks of the Standard The adoption of the standard in an organization requires a competent corporate management. 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. In terms of responsibility, the standard requires that stakeholders should be informed earlier enough to make decisions regarding the initiation of projects. However, this may bring conflicts in governing projects especially when the projects involve a large budget. This also means that, resolution of conflicts may not be in good times as required by the standard which may lead to failure of the projects. 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. 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 good 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). Success Measures Measuring the IT Governance Performances Effectiveness The success if this standard in an organization can be measured by evaluating the information technology outcomes of the project in the company. This includes the cost effectiveness of the use of information technology in the company. 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. In addition, the company may determine the success of the standard by measuring the effectiveness of asset utilization using information technology (Grembergen & Haes, 2005). A properly governed information systems using the standard will ensure that the company aligns its strategy with the information technology adopted in the business. Therefore, the information technology will make sure that assets are properly utilized through good governance of the information technology and information systems. Additionally, the compliance with the regulations and legal requirements can be used to measure the success of the standard. The standard ensures that there is conformance with legal requirements in developing and implementation of information systems in an organization. Therefore, when the company is complying with legal requirements after adopting the standard, it means that the standard is successful (Bowen et al., 2007, p. 196). Measuring the Implementation Success of the IT Project The ability of the information technology to deliver the full benefits is a clear indication of proper governance. 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. The pre-evaluation and post-evaluation will ensure that the company determines the benefits that resulted from the adoption of the standard. Additionally, 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). This is through ensuring maximum value is derived from the investments. In such cases, the shareholders rely on the ability of management to prioritise its decisions in adopting new investments that will ensure the highest amount of dividends at the end of a financial year. Therefore, when the shareholders are satisfied with the quality of an information system. It is an indication that the standard is successful. Moreover, the success of the standard can be measured by determining the way the information system operates in the organization. When the shareholders are satisfied with the operational procedure of the information technology project, it is assumed that the project is successful and will govern under the adopted standard of governance (Bowen et al., 2007, p. 196). Changes in Adopting the Standard In adopting the standard, the company will have to undergo some changes which will accommodate the standard. These changes include changing the company mission and vision statement to focus on the future needs of the company. This is through strategic marketing and strategy innovation. 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). Therefore, 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). In addition, the company will have to change its organizational culture in order to accommodate the cultural behaviour which is recommended in the standard. This is only applicable in cases where the organization has a different organizational culture from the one stipulated in the standard (Juiz et al., 2012, p. 73). This will ensure good human behaviours inn the organization and governance of information systems. In changing the project investment priorities, the company should be careful that some projects may seem less relevant in terms of profitability, but in the long run they contribute to increased growth of the company. 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. Conclusion and Recommendation In conclusion, business and information technology alignment, proper governance of the projects is required in order to achieve the desired outcomes. The alignment of the information technology with the business strategy allows the organization to meet its future information technology needs. This report recommends that the company should adopt the standard in governing its information technology projects in the company. 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. Therefore, the application of this standard is worth in an organization because of the following; Enables company to comply with legal requirements The organization is able to make decisions regarding prioritization of projects The business organization will ensure proper alignment of business strategy with information technology since the applicable principles are able to govern the project at any scale. In addition, the report recommends that, proper management practices and human resource should be hired in the company in order to make sound corporate decisions in implementing the standard. However, 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. Therefore, companies should adopt this standard in their business alignment strategies in order to govern their information systems to achieve business performance. 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 Chen, L., 2010. Business–IT alignment maturity of companies in China. Information & Management, 47 (2010) 9–16. 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 06-05-2013. Juiz, C., Gomez, M., & Barcelo, M., 2012. Business/IT Projects Alignment through the Project Portfolio Approval Process as IT Governance Instrument. 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