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Informations und Wissensmanagement > Chapter 5: IT Governance and IT Controlling > Flashcards

Chapter 5: IT Governance and IT Controlling Flashcards

1
Q

What is Corporate Governance? – Shareholder View

A

Corporate Governance is concerned with the way how leadership and control is being done. The challenge in Corporate Governance is to find an optimum of leadership within the legal context. The focus of shareholders’ needs is the control of the management board attending to shareholders’ interests.

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2
Q

What is Corporate Governance?

A

Corporate governance is the system by which business corporations are directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation, such as the board, managers, shareholders and other stakeholders, and spells out the rules and procedures for making decisions on corporate affairs.

By doing this, it also provides the structure through which the company objectives are set, and the means of attaining those objectives and monitoring performance.

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3
Q

Corporate Governance and IT Governance

Sarbanes-Oxley Act (United States, 2002)

A
  • Higher focus on corporate governance to ensure proper fiscal accountability to shareholders and stakeholders
  • Reassessment of the underlying governance frameworks of each organizational function
  • Increased attention towards the governance of IT function (IT governance)
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4
Q

From Corporate Governance to IT Governance

A
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5
Q

IT Governance

A

“IT governance represents the framework for decision rights and accountabilities to encourage desirable behavior in the use of IT”

“IT governance is not about what specific decisions are made. That is management. Rather, governance is about systematically determining who makes each type of decision (a decision right), who has input to a decision (an input right) and how these people (or groups) are held accountable for their role. Good IT governance draws on corporate governance principles to manage and use IT to achieve corporate performance goals.”

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6
Q

Why IT Governance?

A
  • Flexibility
    • Prepare for changes in business portfolio to allow movement into new customer segments or as a result of mergers and divestments (align processes and systems)
  • Innovation
    • Leverage technology for business innovation and competitive advantage, by providing better insight into the operation
  • Value
    • Manage IT project portfolio for value contribution and align IT investments with business priority
  • Architecture
    • Structure and plan the IT application and infrastructure landscape at times of increased uncertainty
  • Sourcing
    • Apply a sourcing strategy that balances critical internal business knowledge and market capabilities. Manage growing vendor relationships
  • IT as a Business
    • Manage IT services as a professional market focused organization competing on quality and price
  • Compliance
    • Manage IT risks (accounting/controlling relevance)
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7
Q

IT Governance Downsides

A
  • time and energy
  • communication and skills needed
  • dodging responsibilities
  • must be sold as relatively useful
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8
Q

Scope of IT Governance: 4 Dimensions

A
  1. IT Strategy to 2
  2. IT Value Delivery to 3
  3. Risk Management to 4
  4. Performance Measurement to 1
  5. Stakeholder Value Drivers to 1
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9
Q

IT Governance tasks

A
  • Leadership
    • Setting the overall direction for IT within the corporation
    • Maintaining cultural values, corporate image & voice
    • Representing corporation’s key IT stakeholders
  • Planning
    • Developing IT strategy including sourcing philosophy
    • Build corporate IT organization
    • Setting corporate IT goals
    • Agreeing on IT performance targets with IT customers
  • Capital allocation
    • Allocating resources
    • Determining capital available
    • Determining IT investment criteria
    • Reviewing bids for capital
  • Policy
    • Setting the fundamental IT operating procedures
    • Establishing standards, rules and guidelines
    • Defining technical and application architectures
  • Coordination & compliance
    • Ensuring compliance with IT standards and obligations
    • Coordinating IT activities between IT demand & supply
    • Coordinating IT deployment
  • Monitoring & control
    • Qualitative benchmarking
    • Managing service levels
    • Managing a penalty system
    • Identifying areas for service improvement
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10
Q

IT Governance is not a stand-alone exercise

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11
Q

Use of IT Governance - Disciplines

A
  • Strategic Planning
    • Provides the structure and process to set IT direction and priorities, monitor performance against plan, and reset direction as needed
  • Architecture Management
    • Supports the establishment of a flexible and adaptable information, application and technology foundation to support effective, reliable and secure enterprise operations and management
  • Sourcing Management
    • Requires procurement to follow established practices for the acquisition of IT hardware, software and services
  • Delivery Management
    • Supports the optimization of the development and delivery of IT products and services on time, on budget, and with the required quality standard
  • Program Management
    • Enables the management and monitoring of IT projects and programs to deliver project results within reasonable cost-benefit expectations, and at an acceptable level of risk
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12
Q

Design of IT Governance - Important

A
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13
Q

IT Governance and Key Issues of IT Leadership

A
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14
Q

What is CobiT?

A
  • CobiT …
    • integrates business risks, control activities and technology
    • is grouped in 4 domains (planning and organisation, acquisition and implementation, delivery and support and monitoring)
  • CobiT provides…
    • a domain and process framework as well as activities in a logical and manageable structure
    • a monitoring system to support business processes, attain information requirements and control IT resources
    • tool for process owners
    • a set of 34 high-level control objectives and 214 detailed control objectives
    • various IT Governance guidelines
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15
Q

Constitution of CobiT

A
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16
Q

CobiT domains and processes

A
17
Q

CobiT: Pro’s & Con’s

A
  • pro’s:
    • Holistic, integrative model with high level of detail and sufficient level of abstraction
    • CobiT not only shows what to do but how to do by providing key (performance) indicators and lots of possible critical success factors
    • Top Management integration by defining key objectives derived from business strategy
  • con’s:
    • Framework shows little coherence between single processes and related in- and outputs
    • 34 IT processes do not cover all IM activities
    • Importance and involvement of different roles and responsibilities into each IT processes is not obvious
18
Q

Val-IT

A

Val IT is a governance framework that consists of a set of guiding principles, and a number of processes

conforming to those principles that are further defined as a set of key management practices.

19
Q

ITIL

A

IT Infrastructure Library, developed in the UK; worldwide de- facto standard for service management.

Provides guidelines on how to plan, deliver and support IT services

20
Q

ISO/IEC 20000

A
21
Q

Comparison of Frameworks I

Corporation

A
22
Q

Comparison of Frameworks II

IT Organizaton

A
23
Q

IT Governance approach by Weill and Ross - two questions

A
  • *(1) What decisions must be made?**
  • *5** interrelated areas of decision
  • *(2) Who should make the decision?**
  • *6** types of shared responsibility (governance archetypes)

IT Governance Framework combines the aspects of IT decisions, governance archetypes and governance mechanisms and harmonizes them.

24
Q

IT Governance Design Framework

A
25
Q

Key IT Governance Areas of Decision

A
  1. IT principles
    • What is the enterprise’s operating model?
    • What is the role of IT in the business?
    • What are IT-desirable behaviors?
    • How will IT be funded?
  2. IT architecture
    • What technology choices will guide the enterprise‘s approach to IT initiatives?
    • What are the core business processes of the enterprise? How are they related?
  3. IT infrastructure
    • How should infrastructure services be priced?
    • What infrastructure services should be outsourced?
  4. Business application needs
    • How are experiments designed to assess whether they are successful?
    • What are the market and business process opportunities for new business applications?
  5. IT investment and prioritization
    • What process changes or enhancements are strategically most important to the enterprise?
    • What is the relative importance of enterprise-wide versus business unit investments? Do actual investment practices reflect their relative importance?
26
Q

Top Ten Leadership Principles of IT Governance

A

(1) Actively Design Governance
(2) Know When to Redesign
(3) Involve Senior Mangers
(4) Make Choices
(5) Clarify the Exception-Handling Process
(6) Provide the Right Incentives
(7) Assign Ownership and Accountability for IT Governance
(8) Design Governance at Multiple Organizational Levels
(9) Provide Transparancy and Education
(10) Implement Common Mechanisms Across the Six KeyAssets

27
Q

Definition IT controlling

A
  • IT-Controlling refers to the controlling of IT in an organization
  • IT-Controlling guarantees formal objectives (efficiency & effectiveness) and content objectives (quality, functionality, adherence to schedule) of information processing.
  • Therefore, it is not merely a supervision function, but rather a coordination function for information management.
28
Q

Relationship between IT Governance & IT Controlling

A
29
Q

The Situation of the DP-Department

A

Repositioning towards an entrepreneurial IT-Service Unit

Delivery:

  • Infrastructure
  • Applications
  • Projects
  • Consulting with regards to IT
30
Q

IT-Controlling - first possibility - sell without charging

A
31
Q

IT-Controlling - second possibility - charge everything and be transparent

A
32
Q

IT-Controlling - third possibility - cost center

A
33
Q

IS-Management Tasks

A
  1. to select projects that fit
    • project portfolio- controlling
    • linked resources and skills
  2. to execute projects correctly
    • project- controlling
    • several projects running
  3. to handle operation correctly
    • application and infrastructure controlling
34
Q

IT-Controlling Framework

A
35
Q

Value drivers of IT-Investments

A
36
Q

Summary

A

Informations und Wissensmanagement (21 decks)

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