In chapter seven (7), we have learned from "The Path to Information Value" that 70% (seventy percent) of managers and executives say data are “extremely important” for creating competitive advantage.

Running head: Relation b/w It Governance impact on org Perform 0

The Relation between IT Governance impact on Org Performance

Jyothirmai Korni (Lead)

Manoj Kumar Kukkala (Co-Lead)

Raghuvaran Kuruva

Harish Kurra

Eswari Madhubala Kommuri

Sudeepthi Mandava

University of the Cumberlands

The Relation between IT Governance impact on Org Performance 3

Background 3

Literature Review 4

BestBuy INC 6

Research Questions 7

Research Problems 7

Questions 8

Methodology 9

Research Design 9

Case Study Research 9

Data Analysis 9

Data Collection 9

Case Selection 11

Conclusion 12

Discussion 13

References 15

The Relation between IT Governance impact on Org Performance

Most organizations in today's markets tend to make massive investments in Information Technology. Despite the extraordinary investments in the sector, they tend to struggle to direct their IT effectively in a bid to establish their business value. Information governance through IT enhances an enterprise's survival capacity, especially in a competitive environment. Therefore, it means that IT is vital, especially in the modern world. Embracing IT and its usage as a strategic driver towards the business remains a priority for most companies (Luftman, 2004). Despite the significance of IT, which is mostly considered as a strategic driver, most organizations end up struggling on how to govern their IT systems.

Most companies, especially in the modern era, tend to invest well in some of their IT projects. In as much as they invest well in such projects, most IT projects end up failing to deliver their projected business value (Van Grembergen & De Haes, 2009). Previous research studies have shown that failure in IT projects can be attributed to poor IT governance. There is always some direct connection between IT project failures and poor IT governance performance (El-Mekawy, Kaboudvand, and Rusu, 2012). In most cases, organizations can address such an issue through IT management and governance using various processes. In the end, it assists managers in tackling the significant IT role in business.

Apart from that, it helps in identifying some of the achievements in line with IT projects. In other words, IT governance tends to have various positive effects, especially on how a project function. Therefore, it would be essential to start by defining IT governance for an organization in terms of how it promotes or slightly enhances the business objectives and improve the organization's overall performance (Mithas & Rust, 2016).

Previous research studies indicate that IT governance plays an essential role in influencing project performance within the organization. In their study, Weill and Ross (2004) indicate that most high performing companies tend to gain at least 40% more than their competitors, especially with IT investment in place. Additionally, IT governance plays an instrumental role in enhancing organizational performance and innovation. Despite that, it remains a challenging prospect to determine an ideal IT governance framework, which can operate for every firm. Therefore, an understanding based on the different IT governance aspects remains a challenge for most organizational managers, especially today.

Information Technology experts define IT governance as the accountability framework and decision rights that are always used to inspire desirable norms while using IT. There is a clear correlation between corporate governance and IT governance. IT governance remains an essential aspect of corporate governance. Most concepts and issues, which are usually part of corporate governance, tend to be involved in IT governance. Weill and Ross (2004) claim that effective IT governance remains the essential prognosticator of the value that a company can engage in. Therefore, the extent to which IT governance remains effective within the firm influences the organization's general performance (Haes & Grembergen, 2017). In the end, organizations need to quantify the levels to which their organizational IT governance remains effective. A company can achieve this through IT governance performance.

As the organizational IT systems continue to undergo some transition, mainly from IT services providers to strategic business partners, IT governance performance is becoming essential. Simonsson and Ekstedt, (2006), in their study, claim that not all companies have the ability to evaluate their IT governance or establish effective decisions that are based on such a prospect. Ineffective IT governance remains the basis of the various issues, including some of the destructive consequences within the IT sector.

Most negative experiences include low enterprise performances, financial losses, core process issues, and failure to have innovative IT solutions. Van Grembergen and De Haes (2009), in their study, claim that some companies may enact IT governance inversely, whereas the implementation of IT governance can sometimes be established through various frameworks, standards, and processes. Therefore, organizations must start by measuring their current performance status (Smallwood, 2014). While doing this, they can compare some of their performance with their projected goals and objectives. Most of these measurements are supposed to apply to IT governance processes. Weill and Ross (2004), in their analysis, insist that companies can assess their IT governance performance using a formula that is based on at least four IT governance outcomes. In this case, the four outcomes include effective IT for growth usage, cost-effectiveness in IT usage, business flexibility, and IT use for asset exploitation. Companies, which are more advanced, especially in IT governance performance, tend to have a much productive performance (Mitra, Sambamurthy & Westerman, 2011).

Best Buy Inc. probably provides the best example of an organization that has continuously incorporated IT into its business. Best Buy Co remains a multinational consumer that deals in electronics. Being an electronic retailer, the company is always in need of IT to perform most of its tasks. IT with the organization has, in recent years, shifted to a strategic one from a primary operational role (Van Grembergen & De Haes, 2009). Such a factor highlights the company's need for ensuring that its IT sector remains appropriately governed. The company has, therefore, been forced to match part of its technology to its organizational environment. This has been essential in attaining some of the optimal value, mostly from IT.

Evolutionary roles within the sector demand that companies such as Best Buy Inc. acquire adaptive and modern changes, especially in their systems. In as much as Best But Inc. has historically been using IT to manage most of its business operations, information governance has sometimes been a significant issue for the firm (El-Mekawy, Kaboudvand & Rusu, 2012). Some of the factors that have initially influenced IT governance performance within the organization include internal resources, environmental factors, structure, organizational culture, and, finally, the organization's leadership styles. In their analysis, Wilsson and Pollard (2009) indicate that IT governance remains essential in distributing an organization's decision rights and responsibilities based on different organizational issues. Some of these issues include organizational culture, structure, control systems, and strategies. The functions of such organizational aspects in the company's IT governance have previously been addressed in other research.

Most IT projects within large organizations such a Best Buy Inc. have failed, causing losses and massive costs, especially to the affected organizations. This simply means that effective IT governance would be essential in bringing organizational value. Governing IT remains essential in creating some value from IT (El-Mekawy, Kaboudvand & Rusu, 2012). It highlights the significance of IT governance, especially in most organizations such as Best Buy Inc. The research literature demonstrates that the aspect of information governance is essential. In most cases, organizational culture tends to influence it. Organizational culture is mostly used towards the positive enactment of IT governance within the organization.

In the current markets, organizational structures tend to be changing, since more companies seem to be adopting some of the most complex structures they seek to establish themselves in the market. Therefore, the organizational structure and culture role, especially in IT governance performance has always been vital (El-Mekawy, Kaboudvand & Rusu, 2012). Despite such prospects, research studies indicate that most companies lack extensive research into organizational cultural and structural influence on IT governance performance. Previous researchers have been insisting on the need for empirical research, especially on IT governance. A significant emphasis is also placed on some of the factors that tend to influence IT governance. Therefore, there is a distinct lack of research in line with IT governance's role, especially in IT-oriented organizations.

• What is the significance of information governance within an IT-oriented organization?

• How can the organization apply information governance to its information technology?

Perhaps the best way the researchers will classify this research will be through the qualitative research method since the research will be developed to study social and cultural aspects within organizations. In this study, the social and cultural science researchers will remain the main primary users in line with the research methods category. Therefore, in this study, the qualitative methods that the researchers are likely to use will include action research and case studies. However, incorporating ethnography will also be ideal in this research kind.

The ideal qualitative method that this research will use is case study research. Yin (2013) claims that case studies usually involve analyzing or instead examining phenomena that are dependent on specific contexts, whereas the same marvel in a different context is likely to produce different results in line with the study. This type of research analysis will be favorable in this research kind since it is usually used in organizational contexts.

In line with this study, the researchers will use various techniques during the data collection procedures. Conventional techniques, in this case, will include observations, semi-structured interviews, and open-ended questionnaires. In this research, it would be advisable to incorporate the grounded theory methodology. This research methodology that Charmaz (2006) and Glaser and Strauss (1967) famously inspired is also inductive. Given that the study extensively focused on the need for technology governance within the organization, it was essential to consider qualitative research as part of its understanding. Here, the grounded theory specifically focuses on some of the methodical guidelines that most researchers tend to use while analyzing qualitative data.

While incorporating the Grounded Theory approaches that also integrate the qualitative methodology, the researchers preferred to use the semi-structured interviews as their main primary data source towards the study. The semi-structured interviews, in this case, lasted for at least 20 minutes for each participant. During the process, the researchers opted to record the sessions, which were interview sessions. The recording process was done through individual recording devices, and the researchers managed to translate the audio before converting them into electronic documents. Other groups were also given the questionnaires, which were supposed to be filled depending on the questions at hand. The questionnaires were seen as qualitative data forms. Perhaps the most useful module that the researchers used during the process was by engaging in notes taking whereby the researchers used the questionnaires to make their assumptions or rather to record the organizational happenings.

As previously mentioned, the research will be divided into several phases. This meant that the researchers were, therefore, forced to analyze most of the data based on the case studies attained during the research analysis. As indicated earlier, the researchers conducted semi-structured interviews to establish the significance of information governance within an IT-oriented organization and how the organization applies information governance to its information technology; therefore, it was essential to highlight how the data was attained.

In this study, the researchers opted to use BestBuy Inc. for the research. Using the company for the case study was essential, given that the company hugely depends on technology to conduct most of its operations. The electronic retailer has a large IT department with more than 50 IT experts that continue to provide various IT services to clients and the organization. Therefore, the first evaluation that the researcher's conduct was through the use of IT governance performance results/outcomes in which Weill and Ross (2004) introduced. Here, at least four IT governance performance outcomes were used whereby the researchers assessed them based on the 1-5 scale. In the end, the researchers used the overall IT governance performance score to determine the need for IT governance within the organization. The eventual score was calculated as follows

(Importance of outcome) x (significance of IT governance) / (importance of outcome) x 100

Conclusion

From the study, it remains evident that information governance within the organization is essential because of several reasons. In layman's language, it can easily be stated that information governance in most IT-oriented organizations such as Best Buy Inc. tends to determine how the organization project operates. Poor governance results in negativity in terms of the eventual result of the project. This means that in situations where the organization fails to govern such aspects, the chances are that the organization is likely to experience low enterprise performances, financial losses, core process issues, and failure to have innovative IT solutions. In other words, the organization will end up losing more from such ignorance than it would gain. Therefore, it is essential that organizations, more so the technology-oriented companies fund their IT departments to promote their business objectives and improve the organization’s overall performance. As the research demonstrates, companies that govern their information tend to gain at least 40% more markets or businesses than organizations with no such systems in place. In the end, it tends to give such companies an edge over their competitors.

On the other hand, effective IT for growth usage, cost-effectiveness in IT usage, and allows for business flexibility. Special considerations should always be given to the factors that influence the performance of IT governance within the organization. Some of these factors include internal resources, environmental factors, structure, and organizational culture.

Discussion

Having a high score, in this case, would simply mean that information governance within the company has always been successful for the organization. On the other hand, having lower scores would mean that information governance within the organization has failed to provide the company's IT department with viable IT solutions. Apart from that, it also means that IT governance has failed to influence the company strategically. Therefore, the IT department's information governance does not provide the company with a competitive advantage (Van Grembergen & De Haes, 2009).

Recently, the Swedish company requested a change in the IT role from simple business support to functioning strategic partners. The need to change such prospects was because the company felt the need to create some competitive advantage and increase the organization's innovative factor (Cox, 2014). The Sweden case study demonstrates a perfect example of how companies such as Best Buy Inc. can change their initial projects to accommodate information governance in case the company is struggling to perform or remain innovative.

Findings from the internal documents and interviews show that IT organizational structure in an organization such as Best Buy Inc. sometimes fails to match with some of the IT governance principles. Such occurrences would mean that the company is likely to struggle to remain competitive in the market, given poor information governance. Therefore, it would be essential to adapt to some of the new IT governance structures that would allow the company to govern its information effectively (Van Grembergen & De Haes, 2009). Such principles, in most cases, tend to act as essential lenses that would assist the organization defines some of the new positions and roles in the IT department.

References

Cox, S. A. (2014). Managing Information in Organizations. Palgrave Macmillan.

El-Mekawy, M., Kaboudvand, E., and Rusu, L. (2012). An organizational culture perspective in business-IT alignment. International Journal of IT/Business Alignment and Governance, 3(1), 1–26

Haes, S. ., & Grembergen, W.. (2017). Strategic IT governance and alignment in business settings. Hershey, Pennsylvania: Business Science Reference,

Luftman, J. (2004). Assessing business-IT alignment maturity. In W. Van Grembergen (Ed.), Strategies for information technology governance (pp. 99–128). IGI Global.

Mitra, S., Sambamurthy, V., and Westerman, G. (2011). Measuring IT performance and communicating value. MIS Quarterly Executive, 10(1).

Mithas, S., and Rust, R. T. (2016). How Information Technology Strategy and Investments Influence Firm Performance: Conjecture and Empirical Evidence. MIS Quarterly, 40(1), 223-245

Simonsson, M., and Johnson, P. (2006). Defining IT governance - A consolidation of literature. In Proceedings of the 18th Conference on Advanced Information Systems Engineering (CAISE 2006), Luxembourg.

Smallwood, R. F. (2014). Information Governance: Concepts, strategies, and best practices. New York: Wiley.

Van Grembergen, W., and De Haes, S. (2009). Enterprise governance of information technology: achieving strategic alignment and value. New York, NY: Springer Science+Media.

Weill, P., and Ross, J.W. (2004). IT Governance: How Top Performers Manage IT Decision Rights for Superior Results, Boston, MA: Harvard Business School Press.

Webb, P., Pollard, C., and Ridley, G. (2006). Attempting to define IT governance: Wisdom or folly? In Proceedings of the 39th Hawaii International Conference on System Sciences (HICSS 39)

Willson, P., and Pollard, C. (2009). Exploring IT governance in theory and practice in a sizeable multinational organization in Australia. Information Systems Management, 26(2), 98 – 109