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Theoretical Framework
Acknowledging previous work in the research field is important, as the purpose is to further explore the subject of IT governance and contribute with new knowl-‐ edge. In this chapter, IT governance is introduced and the models applied by the researchers will be discussed in-‐depth, guiding readers through the academic background.
IT Governance
The terminology of IT governance address questions of power, decision processes and alignment between business and IT (Luftman et al, 2003). As IT should be seen as a business partner, with commitment from both business and IT, how could one argue who should be involved and what resources that should be dedicated? IT Governance requires attention; as careful management of IT is essential to gener-‐ ate business value.
IT Governance Arrangements Matrix
In order to understand the wide concept of IT governance, Weill and Ross (2004) used the IT Governance Arrangements Matrix. MIT Sloan School originally de-‐ signed the model, in order to explore the correlation between IT Governance and firm performance. Proposed in the matrix, the relation between IT Governance and firm performance are result of the correlation between IT decision domains and the decision structure, which is described as archetypes.
The IT Governance Arrangements Matrix, comprise of two axes, which addresses decision domains and archetypes. The model conceptualizes the IT decision do-‐ mains horizontally, which are major areas to be dealt with in order to ensure effec-‐ tive IT governance. The second, vertical axis discusses the decision structure con-‐ cerning decisions to be made. In the matrix, the decision structure reflects political structures, which are explored in a later paragraph.
In order to understand the results from Weill’s study in relation to the derived out-‐ come from the empirical study, the IT governance arrangements matrix will be discussed in detail.
The model in question is utilized in the study, to allow positioning of the organiza-‐ tional IT Governance structures. The matrix will serve as a framework for both data collection and empirical analysis.
Key IT Decision Domains
Weill, MIT Sloan Center for Information Systems Research 2003, identifies five key IT decisions that must be managed properly within organizations.
•IT Principles
•IT Architecture
•IT Infrastructure Strategies
•Business Application Needs
•IT Investment And Prioritization
These decision domains are corner stone’s of the theoretical framework; each do-‐ main will be discussed in detail.
IT Principles
Davenport et al (1989), defines the IT Principles as a “High-level statement about how IT is used in the Business”. Clarifying IT Principles will provide understanding of the expectations of IT towards the business strategy.
Further discussing IT Principles, Pearlson and Saunders 2006)( present the In-‐ formation System Strategy Triangle, as a result of conducted studies. The appre-‐ hension of the strategy triangle is that the organizational information and business strategy should work in coherence to drive the overall business strategy. (The dif-‐ ferent strategies should, in the end, support the business strategy that leads the company.)
With the strategy triangle in mind, the IT Principles should clarify how IT should be used to become a business strategy facilitator. The defined IT principle can also provide the business executives an understanding of the relation between IT and the business within the enterprise. IT principles can be argued to be a strategic is-‐ sue to be dealt with.
IT Architecture
IT architecture concerns technical choices. The architecture should reflect how technology should be used and implemented in order to maximize business bene-‐ fits. Ross (2003, p.2), defines IT architecture as; “the organizing logic for applica-tions, data and infrastructure technologies, as captured in a set of policies and techni-cal choices, intended to enable the firm’s business strategy.”
IT Infrastructure Strategies
Byrd and Turner (2000), discuss the flexibility of IT infrastructure. In their article, they state that IT infrastructure is comprised of two subsets, human IT infrastruc-‐ ture and technical IT infrastructure.
Further they define IT Infrastructure; ”IT infrastructure is the shared IT resources consisting of a technical physical base of hardware, software, communication tech- nologies, data, and core applications and a human component of skills, expertise, competencies, commitments, values, norms, and knowledge that combine to create IT services that are typically unique to an organization. These IT services provide a foundation for communications interchange across the entire organization and for the development and implementation of present and future business applications.”
(Burd and Turner, 2000, p. 6)
When discussing this definition it is necessary to reflect upon IT infrastructure not only as technology itself, but also how it’s managed through human resources and capabilities. A combination of the two creates, as quoted above, a unique service for organizations.
Business Application Needs
Busisness application needs concerns the specification of applications required by the business. This should have a close relation to the business strategy, in order to ensure applications fulfill a purpose and align with the business strategy.
T Investment and Prioritization
This domain, discusses how different prioritizations and Investments in the nature of IT concerns the managerial aspects of an organization. Weill and Ross (2004), discusses this as the decisions regarding what investments to undertake and to what extent. This would also concerns prioritizing the investments and managing approvals followed by justification. IT investment justification analyzes the in-‐ vestment through comparison between perceived and estimated value. It is neces-‐ sary to evaluate proposed IT investments to ensure they align with the strategic in-‐ tent of IT.
IT Governance Archetypes
The archetypes in the matrix reflect the decision structure, such as who deal with certain decision domains and who are in position to provide input. The archetypes applied in the IT governance matrix reflects political structures of an organization (Ross & Weill 2004). In order to clarify the archetypes and discuss the definitions applied, a thorough discussion of each archetype will follow.
Business Monarchy
In business monarchy the executives manage the IT decisions. CIO or equivalent executive can be a part of the executive directorate to make decisions, of impor-‐ tance to the company. This however does not exclude the fact that IT-‐professionals can influence the decisions, since the business executives need to grasp the whole picture about the decision domain.
IT Monarchy
In contrast to Business Monarchy, IT Monarchy solely involves IT-‐professionals, excluding other senior executives. Weill and Ross (2004) argues that a team of IT professionals often comprises of IT professionals from IT-‐ and other business units, which has authority to manage decisions within this decision domain.
1 Introduction
1.1 Background
1.2 Definitions
2 Problem Discussion
2.1 Problem Specification
2.2 Research Questions
2.3 Purpose
2.4 Delimitations
2.5 Perspective
3 Theoretical Framework
3.1 IT Governance
3.2 IT Governance Arrangements Matrix
3.3 Strategy Triangle
4 Method
4.1 Research Philosophy 16
4.2 Research Approach
4.3 Research Choice
4.4 Time Horizon
4.5 Data Collection
4.6 Analysis Method
4.7 Research Reliability
4.8 Research Validity
4.9 Research Generalizability
5 Empirical findings
5.1 Response rates of collected data
5.2 Decision Domains Analysis
6.Analysis
6.1 Decision structures
6.2 Comparison
6.3 IT Strategy Triangle adaption
6.4 The Changed Role of IT Governance
6.5 Differences in Compared Studies
7 Conclusion
8 Discussion
8.1 Weaknesses and Strengths in the Conducted Study
8.2 Future Research
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