Don't Just Lead, Govern: Implementing Effective IT Governance
Name
4237-02.pdf
Size
236.83 KB
Format
Adobe PDF
Checksum (MD5)
fadf6114df7e11f6cb353fe0c0bdfc13
Author(s)
Weill, Peter
Woodham, Richard
Date Issued
March 28, 2003
Series/Report no.
MIT Sloan School of Management Working Paper;4237-02
CISR WP No.;326
Abstract
Firms achieving above industry average returns from IT investments must be making
consistently better IT-related decisions. Effective IT governance is one of the ways
these firms achieve superior returns. Many firms are creating IT governance structures
that encourage the behavior leading to achieving the firm's business performance goals.
We define IT governance as specifying the decision rights and accountability
framework to encourage desirable behavior in the use of IT. Effective IT governance
requires careful analysis about who makes decisions and how decisions are made in at
least four critical domains of IT: principles, infrastructure, architecture, and investment
and prioritization. We studied the use of IT in large multi-business unit firms in the
USA and Europe and found that the typical firm governs IT by following generally
accepted guidelines with broad-based inputs and tightly controlled decision rights.
However, top-performing firms governed IT differently with governance structures
linked to the performance measure on which they excelled (e.g., growth). Designing an
effective IT governance structure requires understanding the competing forces in a
large organization and creating harmony among business objectives, governance
archetype and business performance goals. An effective IT governance structure is the
single most important predictor of getting value from IT. To help understand and
design more effective governance, we propose an IT governance framework that
specifies how decisions are made in the key IT domains. The framework harmonizes
desired governance archetypes (i.e., monarchy, feudal, federal and anarchy) and a
series of governance mechanisms (e.g., committees, approval processes and
organizational forms). The framework is illustrated with effective IT governance at
State Street Corporation. Effective IT governance encourages and leverages the
ingenuity of all the firm's people in using IT, not just the leaders, while still ensuring
compliance with the firm's overall vision and principles. In short, don't just lead,
govern
Subjects
IT
Governance
IT Governance
Persistent DSpace Link
