In many organizations, information technology has become crucial in the support, the sustainability and the growth of the business. This pervasive use of technology has created a critical dependency on IT that calls for a specific focus on IT governance. IT governance consists of the leadership and organizational structures and processes that ensure that the organization’s IT sustains and extends the organization’s strategy and objectives (Grembergen et al., 2004). IT governance matters because it influences the benefits received from IT investments. Through a combination of practices (such as redesigning business processes and well-designed governance mechanisms) and appropriately matched IT investments, top-performing enterprises generate superior returns on their IT investments (Weill, 2004). IT governance can be defined as specifying decision rights and accountability framework to encourage desirable behavior in the use of IT (Weill & Ross, 2004). This is the definition we will use here. Other definitions are for example: (i) IT governance is the structures and processes that ensure that IT supports the organization’s mission. The purpose is to align IT with the enterprise, maximize the benefits of IT, use IT resources responsibly and manage IT risks, (ii) A structure of relationships and processes to direct and control the enterprise in order to achieve the enterprise’s goals by adding value while balancing risk versus return over IT and its processes, (iii) IT governance is the responsibility of the board of directors and executive management. It is an integral part of enterprise governance and consists of the leadership and organizational structures and processes that ensure that the organization’s IT sustains and extends the organization’s strategies and objectives, and (iv) IT governance is the system by which an organization’s IT portfolio is directed and controlled. IT Governance describes (a) the distribution of decision-making rights and responsibilities among different stakeholders in the organization, and (b) the rules and procedures for making and monitoring decisions on strategic IT concerns (Peterson, 2004a). IT governance has attracted substantial attention in recent years (e.g., Chin et al., 2004; Grembergen & Haes, 2004a, 2004b; McManus, 2004; Meyer, 2004; O’Donnell, 2004; Peterson, 2004a, 2004b; Rau, 2004; Read, 2004, Robbins, 2004; Trites, 2004; Weill & Ross, 2004, 2005). Here we will discuss IT governance in terms of resource mobilization, allocation of decision rights as well as strategic alignment.
The future of corporate governance in knowledge-dispersed companies.
