Good Information Technology Governance, IT Governance Principles and Their Impacts - Essay Example

Number Subject Name Lecturer’s Name Accounting Due date Date Submitted Good IT Governance Introduction It governance refers to the processes and procedures hat make sure that there is the effective application of IT when making plans and carrying out activities meant to achieve the organizational goals. It is simply the processes of aligning the structure and making sure that organizations remain on track to achieve their goals and objectives and that Company also installs the necessary infrastructure that measures the information technology performance. It ensures that every single stakeholder’s interests are accounted for and that measurable results are deducted from that IT application (Amoako 2015, p. 44). For organizations to be successful, they have to implement and make proper use of IT governance, the implementation of this IT governance I a critical success to many organizations. The paper will discuss how many companies benefit from good IT governance, the factors that contribute to this success and samples of the same (Van den Berghe 2012, p. 23. For businesses to be able to implement good governance successfully, the information officers need good leadership and execution as well. To be able actually to execute governance, process discipline and creativity must be combined so as to achieve good results. Good governance mainly deals with control. Good governance is known for bringing along controls that make sure that there are no chaotic and reckless behaviors in the organization and among the employees. Organizations that have good IT governance enjoy the advantage of increased business value of assets as well as receiving extra returns on assets. Key Imperatives Companies need to focus on certain imperatives when implementing a good IT governance model. The organization’s chief information officers need to align the IT governance with the overall corporate governance as well as the primary business objectives. He also needs to define the key IT governance objectives around the strategic alignment, the risk management, and performance management as well. Another derivative for successful implementation of it governance model is the establishment of holistic governance across all disciplines that are connected to the IT value chain. The most appropriate IT governance control procedures should also be identified so that they can be used to achieve the IT governance objectives. Lastly, a continuous tracking and monitoring of the model should be established (Kallinikos 2011, p. 56). For successful IT governance, the CIO must first get his priorities right. Governance ensures that IT investment strategies and strategic business priorities are aligned well. The CIO should then first ensure that the corporate strategy of his organization is right before even setting up an IT steering committee. Organizations also have to use the rear view mirror. Companies that have good IT governance must always assess their projects to see whether they are meeting the expectations. All the executive committee members must always be present and must engaging in their day to day activities as well as deliver their expectations. The executives and committee members should be few and elite as too many of them can lead to loss of focus as well as accountability (Ho 2011, p. 601). Good governance is not the same as project success. For organization’s to achieve their goal, the governance committee should select the right approach to implement for effective it governance and stick to it. Choosing the rightful approach and sticking to it is a factor that helps to handle all the divisions and complex departments of an organization. The governance strategy should also be structured in a creative manner and incorporated into the organization’s corporate strategy. With an efficient corporative strategy, firms can be able to manage all its business aspects and be able to meet both its short-term and long-term objectives. The corporate strategy should be able to supply the framing for the IT strategy and decision-making processes as well. The mature organizational structure is also an important factor that must be considered when structuring the IT governance strategies (Chourabi 2012, p. 2292). The efficiency of all the IT governance committee and advisory boards is always influenced by the act of sharing leadership, involving no biased members as well as applying proper roles and responsibilities. By maturing the process, the decision-making process is speeded up, and ineffective governance overhead reduced significantly. The effects of corporate needs as well as business demands on both supply and demand and provide IT with the mandate to make business supporting decisions and also to communicate the value that is delivered back to business. For the company to succeed in IT governance, they will have to install all the necessary precautions just in case they are faced with any difficulties when handling the company operations (Drnevich 2013, p. 504). Effective IT governance needs a mature, stable governance structure as well as an adamant and proper functioning boards and committees. IT governance must always focus on attaining good results from strategic choices and also lending a hand to the IT investment community. So as to enhance value creation of the IT portfolio, difficult and challenging decisions must be made on how to allocate fairly resources among all the available opportunities and to rank the ones that are approved (Simcoe 2012, p. 309). Businesses thus need to be accountable for the value delivery from all the IT-enabled operational capabilities. Industry leading IT governance should thus be implemented as well real solutions that can be customized when necessary. Multiple frameworks can even be altered so as to meet any unique needs of an organization. Organizations should ensure that they identify as well as evaluate all the opportunities for exploring information and knowledge globally. The information system strategies should also be understood and applied in the formulation as well as the implementation of the information system strategy (Kahler 2015, p. 45). IT Governance Principles and Their Impacts IT governance is a discipline that makes sure that the IT investments are aligned with the organization’s priorities as well as the tracking and monitoring of all the IT engagements. It strategy is important as it improves the organization’s strategic alignment and also enhances the overall IT value by application of better and quality IT investment management practices (Pagallo 2015, p. 168). Architecture governance is used to ensure there is standardization in technology portfolio. It drives the alignment of the solution to technology and all the reference design. The architecture governance is a critical factor that contributes to the success of every organization as it increases the level of architecture reuse and reduces risks by using the time-tested architectural components (Kooper 2011, p. 200). The project and portfolio governance discipline are also a critical factor to the success of companies through implementation of good governance. It mainly governs the sequence of every project portfolio so as to ensure maximum operating efficiency. It is also responsible for identification and project portfolio risk mitigation. Through this, the strategic alignment improves significantly as well as the budget delivery of projects (Pagallo 2015, p. 172). Factors It awareness is an IT governance factor that enables understanding as well as support from the most top management in private organizations. The awareness and understanding are the bases for providing excellent leadership from the top management. With proper leadership, organizations end up being successful. An example is when the CEO is aware of Information Technology practices and how to apply them; the rest of the subordinate staff can be able to implement the same in their day to day operations (Tang 2012, p. 407). IT governance uses objective and the performance-based systems in performing its tasks. A balanced scorecard is a sample of these management systems that can be utilized by both the private and public organizations. Corporate governance has the strong awareness of all the risk management practices used in both private and public sectors (Marnewick 2011, p. 662). The awareness is important as it I usually translated in some companies by having a risk committee. Risk awareness is a factor that contributes to the success of an organization as it helps the IT department to be more receptive to incoming new ideas and practices that assist them to handle and manage risk in a better way (Eliasson 2014, 56). Good IT governance determines the rightful degree authority. The use of multi-level authority in using specific budgets helps in making that budgets are rightfully approved once they get to certain limits. The budget may then require some vigorous bidding. Through determination of the appropriate degree of the middle managers, the procurement process of the urgent IT needs is fastened. Through this, the organization procedures are fastened leading to minimization of delays in the procurement department (Galliers 2014, p. 67). Proper IT governance ensures that there are enough contingency budgets. The contingency budget is a factor that enables the organization to be able to cope with any immediate problems. Government agencies, however, do not always process these contingency budgets to reduce corruption and fund embezzlement. Banks, for example, need the contingency budget so as to be able to handle any future difficulties. Other factors that contribute to success in organizations that have implemented good governance include the transparency in decision making. Good IT governance promotes transparency when choosing a course of action in an organization set up. The professional approach to problem-solving applied in organizations that have implemented good IT governance is also an example of factors that contribute to the success of companies. The professional approach ensures that problems are solved in the right way and have little chances of bothering the day to day operations of the enterprise (Adegbite 2015, 329. P. 320). It governance makes sure that there is proper documentation of all the company policies and practices. It also addresses any differences that may arise between practice and policy. Through this, an organization can maintain a long-term perspective and concentrate on both investments and profitability of the organization. A good IT governance needs a top manager who has been chosen based on real merits and not any other basis. The manager should be well qualified, capable and also efficient in his work (Conger 2012, p. 45). The principal organization asset is human being element, and thus, people should be treated and handled with utmost respect and not as robots or even machines. Through IT governance, a company manages to improve and follow people, product, and services approach when handling any issues relating to the organization. Benefits By implementing good IT governance, an organization can align its business operations properly for the achievement of better results. By aligning the activities correctly, all the partners end up satisfied increasing the chances of better governance, collaboration, and less resistance. IT governance ensures value delivery a benefit that leads to decrease in the IT budget. The overall IT investments value ends up increasing as proper project prioritization is implemented. Also through effective technology planning, the total cost of ownership and operation reduces improving the performance management and also the resource management. Reduction in costs means that fewer resources are used to produce a single unit, a step that leads to selling the final product at a lower cost than expected thus attracting more customers. An extensive customer base leads to more sales that in turn bring in more profit. The risk is also reduced considerably by the use if IT governance (Kettl 2015, p.44). Relationship Corporate strategy refers to the scope and direction of a corporation and the mechanisms in which all the business operations function concurrently to achieve specified goals and objectives. Information systems, on the other hand, refers to the process and the tools used for storing, managing and collecting data and other communications in an organization set up. Tools used for sending out communication and storing files in a business setup are some of the samples of the information system (Davis 2012, p. 100). For the corporate strategies to be effective, they require the information system processes and tools to make them work easier and faster. The hardware, software, infrastructure and trained personnel are some of the components of information systems that are mainly used to facilitate planning, synchronization and coordination as well as decision making in any organizational setup. When making the corporate strategies, these components of information systems are very essential and assist in making good and well-informed decisions (Ali 2012, p. 180). Information management is a next field that deals with the infrastructure that is used to gather, keep and disseminate processed data. Through information management, the right information is delivered to the authorized individuals in real time. Information and communications technology, on the other hand, is a wide area that mainly deals with all the communication devices and applications as well (Rebollo 2012, p. 780). It encompasses the radio, television, phones, personal computers and all the network hardware and software. For good corporate governance, it must be able to use all the information systems to manage information efficiently and to disseminate the information using the information and communications technologies to reach the target market. Organizational information is passed on to the information system tools (De Haes 2015, p. 323). Challenges Despite the many benefits associated with good IT governance, there are many online security issues that must be taken into consideration to prevent unauthorized access, use change or even destruction of organizational information. The most common threats in the e-commerce environment include malicious codes that may either be worms. Bots, viruses or even worms. The systems may also be invaded with unwanted programs. Sometimes there are some deceptive attempts to gain some confidential information regarding an organization. Hacking and cyber vandalism are also common security threats that are encountered while using the IT governance models (Chen 2011, p. 116). Solutions For organizations to curb these security issues, physical controls can be implemented which include transaction authorization, supervision, and segregation of duties as well as the access control activities. Good audit trails must be performed von all the organizational data and proper personnel policies and practices instituted (De Haes 2013, p. 307). There should also be separation of powers and physical protection assets that should be enhanced through proper documentation. Encryption, biometric systems, and personnel training should be done so as to reduce the security threats. Conclusion In conclusion, good IT governance contributes highly to the success of every organization. Through this management, the organization confidential information is kept away from unauthorized users and the companies day to day transactions are done at a faster rate than using the manual methods. Customers are reached more widely, and the employee records are maintained in a better way. The decision-making process is fastened, and the best problem-solving techniques are employed (McCall 2012, p. 86). The IT investments are also aligned with the organization priorities and risks associated with the day to day business operations are minimized. Good IT governance should be participatory, equitable, and inclusive and also be able to follow the rule of law. Organizations should thus implement all good IT governance models as they will ease the difficult day to day tasks and also enable organizations to attain long-term goals. For companies to be able to implement good governance successfully, the information officers need good leadership qualities and execution as well. To be able actually to execute management, process discipline and creativity must be combined so as to achieve good results (Conger 2012, p. 45). Every leader should thus strive to lead his overall staff, both the operational staff and middle-level managers to installing and implementing the IT governance models so as to gain a competitive advantage over his/ her rival companies. CIO’s should also be ready to handle all the challenges that might be encountered in the process running the organization using IT governance practices. Encryption techniques and access control methods should be implemented early enough to curb any risks that may come along with IT governance (Essen 2013, p. 222) References Adegbite, E., 2015. Good corporate governance in Nigeria: Antecedents, propositions and peculiarities. International Business Review, 24(2), pp.319-330. Ali, S. and Green, P., 2012. Effective information technology (IT) governance mechanisms: An IT outsourcing perspective. 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