Information Systems

Management: Key
Principles and Practices

Course 1: IS/IT Governance

Module 1: IT Alignment
Definition of IT Governance
Institute of Internal Auditors (IIA)
“The leadership, organizational structures, and processes
that ensure that the enterprise's information technology
supports the organization's strategies and objectives.”

Leadership
a. Directors on the board
b. CIO or other senior IT executive on the board
c. Board-level IT committees.

© Gautam Ray, 2018

Role of IT Governance Leadership
What do they do?
a. Monitoring or oversight:
i. Is the firm making good IT investments,
ii. Does IT contribute to competitive
advantage,
iii. Are we compliant with regulations.
b. Service:
i. Providing expertise,
ii. Preferential access to external IT providers.

© Gautam Ray, 2018

Role of IT Governance Leadership
What if they don’t?
Negative returns measured around IT failures are
associated with the changes in the board?
a. Increase in the number of internal directors
with IT competence. 110 Operational
b. Turnover of CIO/CTO. IT Failures in
Publicly Traded
US Financial
Services Firms

© Gautam Ray, 2018

Why do we care about IT Governance
• On December 19, 2013, Target Corp, disclosed a breach of 40
million credit card accounts over a 3 week period before
Christmas.
• On January 10, 2014, the company said hackers also stole
personal information from as many as 70 million customers.
• As of March 2014, Target shares were down 6% since the
breach was disclosed.
• March 6, 2014, Target’s CIO resigned.
• May 5, 2014, Target’s CEO and Chairman resigned amid fallout
from data breach.

© Gautam Ray, 2018

 Significance of IT Governance
IT IT-Business Firm
Governance Alignment Performance

© Gautam Ray, 2018

 Significance of IT Governance
IT IT-Business Firm
Governance Alignment Performance

 Steering Committee  Business and IT  Financial Performance

 IT Investment Strategy Alignment  Operational Excellence
Prioritization Process for products,  Customer Satisfaction
processes, and
markets

© Gautam Ray, 2018

Image Credits
Image/Source
Operational IT Failures in Publicly Traded US
Financial Services Firms
IT Governance Significance
Copyright Location Notes
Benaroch, Michel, and Anna Chernobai. "OPERATIONAL Slide 4
IT FAILURES, IT VALUE DESTRUCTION, AND
BOARD-LEVEL IT GOVERNANCE CHANGES." MIS
Quarterly 41.3 (2017).
Wu, Shelly Ping-Ju, Detmar W. Straub, and Ting-Peng Liang. Slide 6-7
"How information technology governance mechanisms and
strategic alignment influence organizational performance:
Insights from a matched survey of business and IT
managers." Mis Quarterly 39.2 (2015): 497-518.