MIS - IT Governance

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DENNIS AKOMEAH

B020908019

MANAGEMENT INFORMATION SYSTEMS

BIT L400 EVENING
ASSIGNMENT

Should IT governance of an e-commerce start-up like Manheim online differ from that used by
its parent company, as Manheim auctions was in this case? Should the IT governance of an ecommerce venture change over time, as occurred with Manheim online? Defend your answer to
both questions with information from the case.
The decision on how IT governance should be managed varies from business to business. An
organization’s management decision making process is defined by an organization’s drive,
principles, goals, and objectives and also dependant on idiosyncrasies of senior management
members. In some cases integrated solutions are directly implement within the business process.
At other times management decides to experiment with different technologies with a view to
eventually settle for the most promising technology.
The reason start-up companies may adopt a different IT operational policy from their parent
company could be attributed to certain issues related to the nature of operations conducted at the
start-up company, some of which are, implementation of a virgin and untested technology.
Management may see the potential inherent in these technologies capabilities but skeptical about
the success of its implementation so they may first experiment with it and later introduce it into
the parent company operational process.
In some cases too start-up companies’ IT governance policies are not tightly governed to
structured to suite that of the parent company because management focuses on rapid growth and
development. For example the car auctioning company Manheim Auctions wanted to tap into the
opportunities offered by the internet to grow its business and decided to introduce online auction
capabilities. Later Manheim Online which is a subsidiary of Manheim Interactive was launched.
Manheim’s decentralized approach of IT governance allowed the company to innovate and grow
its online business base.
The IT governance of an e-commerce venture need not remain static but must change according
to the changing demands of the market, the rate of growth of business, and for competitive
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advantage. The change in IT governance could be implemented in the form of policies,
infrastructural design, architectural design, and core business service. In the case of Manheim
Auctions, it was discovered that there was a need for more centralized IT architecture and
reusable infrastructure services. Currently Manheim’s online business is integrated into the
overall Manheim Auctions business model.

The Five major governance decision areas outlined in the case tell us a lot about what is
involved in the management of IT. Which of the decision areas should primarily be the province
of the business management of a company? Which should primarily be the responsibility of IT
management? Or should all decisions be made jointly by both management groups? Defend
your answers with information from the case and the chapter.
The 5 major IT governance decision areas are
1. IT Principles – Decision on strategic role of IT in business
2. IT Architecture – set of IT choices to guide the organization in satisfying business needs.
3. IT infrastructure – Decisions made about IT services that provide foundation of
enterprise’s IT capability.
4. Business Application need – determining the business requirement for purchased or
internally developed IT applications.
5. Prioritization and Investment Decisions – Determines how much and where to invest in
IT.
How companies manage and share IT governance decision varies widely. Different companies
take different approaches the United Parcel Service of America UPS model of arrangement
reflects the company’s commitment and customer’s global commerce needs. The senior
management is in charge of translating principles and investment decision into IT architecture
and infrastructure. While the business unit projects define business and IT application needs
meant to enhance performance and support corporate objectives. At UPS IT management group
are divided into 4. They have
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a. The IT steering committee - in charge of IT principle and investment decisions
b. IT governance committee – In charge of IT architecture decision
c. Formal Charter process – In charge if aligning proposal with strategic objectives.
d. An escalation process committee – Handle exceptions to architecture standards.
At Manheim, the senior management is in charge of defining principles and strategic business.
the requirements. The IT development team is responsible for service rollout, product
management, development and service quality assurance.
In the case of JP Morgan Chase the company instituted enterprise wide IT principles in order to
encourage the use of standardized technologies. At the division level IT management facilitate
sharing of customer data so that business units can present a single face to the customer. At
individual business level, each business can design the IT governance that best addresses its own
need.
Considering the variation in structure and prioritization of IT governance challenges among the
above stated company, it will be difficult to restricted certain decision areas of IT governance to
a certain level of management because of issues like the nature of the business, size of the
business, and the kind of service being offered. Basically it is agreed that companies will face
these challenges in decision making. But the responsibility of which management level will be in
charge of handling what area of decision making will be decided by company management and
stakeholder.

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