18 Dec 2022

101

The Impact of IT Governance on Organizational Decision-Making

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The IT governance discipline in the organization is a subset of the general corporate governance. However, in some organization IT governance is viewed as a distinct field, although it is still part of corporate governance. IT sector deals with the performance of information technology systems and managing its risk. Thus, the major goals of the IT manager are to ensure that the IT investments generate value to the overall welfare of the business. Similarly, the manager will focus on mitigating risk associated with IT systems within the organization. However, this is possible when there are proper organizational structures with clearly defined roles and responsibilities on information and business procedures. In a nut cell, the goals of the IT departments should be viewed to add value to the governance structure of every organization rather than a distinct discipline ( Müller, et al. 2016) . Thus, taking this into consideration, all the stakeholders within the organization will be able to take part in making decisions. Further, having IT governance in place will ensure that the decisions relating to IT are driven by the business, and there is shared responsibility for important systems. The importance of the IT department in every organization is undisputable as it is the central success especially when the core goal is to anticipate business changes or transformations. Thus, in the process of business transformation, the IT is required to balance its risk and rewards to the organization. 

The IT governance structures such as centralized and decentralized decisions makings present pros as well as cons to the organization. Thus, the functional operation of the firm requires that when making centralized directions to recognize the role of the manager in making IT decisions. In the centralized structure of decision making, the manager should focus on the economies of scale as the major IT unit sets ( Moser, 2016) . Further, the manager should have authority in setting the standards of the organization as well as the infrastructure. However, the presence of increased bureaucracies may results into frustrations when ignoring the freedom of some IT units. In a nut cell, centralized IT governance provides the IT function the authority to all units of performance. 

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On the other hand, in the decentralized structure of decision making, the manager should focus on the faster integration of the processes and business transformations. Additionally, the structure assumes IT infrastructure authority and also causing duplication of the IT product and services due to multiple units of operations. In a short note, decentralized IT governance, every division has the responsibility for the IT units of operation. 

The COBIT framework provides the guidelines of IT decision making management such as critical success factors (CSF), key goals indicators (KGI) as well as the key performance indicators (KPI). In this sense, it is the role of the IT steering and governance committee to reveal these factors that need collaboration from all stakeholders. However, in the current industries, COBITs are made available to the board of directions and are used to business transformations. Also, these standards require the organization to observe policies and procedures. However, COBIT materials cannot be used directly since the organization requires familiarizing with its business context. Thus, the framework becomes more useful to its users either within the industry or organization ( Müller, et al. 2016) . Further, the core goal is to assess the GSK’s procedures by comparing with the standards acceptable for governance without introducing any business transformation. 

Decision-making role plays a critical part in the IT governance structure. Firstly, the IT manager has to make policies, approve plans and make a recommendation based on the IT resources allocation. Further, in the process of making decision manager should define the organization’s direction in the IT governance. In this sense, formulate the tactical roles and responsibilities of the IT governance. Thus, there should be clearly defined roles and responsibilities of the board, strategy committee, and the executives. The next step in the decision making is to specify the priorities laid down in the allocation of resources, personnel’s responsible and how the IT projects are tracked. 

Secondly, managers should make decisions on the implementation plan of the IT governance. In this sense, there is need to have an effective action plan that aligns with circumstance with needs. The first action is for the board to manage the controls of the IT governance and give the direction to the managers. However, for such decisions to be active board should ensure that IT issues and plans are according to its agenda. Also to highlight the IT related risk that may have an impact on the organization. 

The third step of decision making is to promote cross-coordination for the IT plans, policies and decisions. In this case, the organization focuses on distributing IT decision across the business to identify some of the overlapping responsibilities ( Müller, et al. 2016) . The overlapping position coordinates decisions and ensures that the responsibility of the managers is filtered to the decision made at individual positions. 

Like any other corporate governance, IT governance has its strengths and weaknesses. At first, the main strength of IT governance is that it is one of the success factors of the organization. Further, it has demonstrated its ability to provide a specific focus on the quality production and operations. Since IT governance is based on the best practices, it provides a better tool for improving operation system. COBIT framework enhances the strength of IT governance as it is extremely audit oriented. In this case, it provides an excellent tool for managing the performance of IT in the organization. 

However, some of the IT governance weakness is that it uses COBIT framework which is very generic. On this point, it only gives the firm the direction to follow and not the guidelines to follow ( Moser, 2016) . Moreover, it is not oriented for a continuous process improvement, and it requires the full and proper context of the firm. Thus, in the absence of proper context, the IT governance will not support the organization’s strategic objectives. Another weak is that the IT governance is only designed to be used with the four walls of IT and can only benefit the specifically designed organization. 

In conclusion, IT governance should integrate ideas and information of the organization strategies. Also, the focus is to operationalize and capitalize on the tactical IT opportunities within the organization. For instance, currently, most of the organizations are investing in technology for innovation and productivity improvement. Thus, these organizations require proper IT governance to manage their smart technology investments ( Moser, 2016) . Further, IT governance is a learning process which involves trial and error. Therefore, the frequency of the firm in employing continuous improves the process in the IT governance, guarantee benefits to its investment. 

References 

Moser, P. (Ed.). (2016).   Decision rules in the European Union: A rational choice perspective . Springer. 

Müller, R., Turner, R. J., Andersen, E. S., Shao, J., & Kvalnes, Ø. (2016). Governance and Ethics in Temporary Organizations: The Mediating Role of Corporate Governance. 

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StudyBounty. (2023, September 15). The Impact of IT Governance on Organizational Decision-Making.
https://studybounty.com/the-impact-of-it-governance-on-organizational-decision-making-essay

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