Understanding the impact of IT governance compliance in organizations

IT Governance

R. Peterson, the author of "Crafting Information Technology Governance" (Peterson, 2004) holds the view that IT Governance is the key to realizing IT business value by defining the procedures and mechanisms for making and monitoring strategic decisions. He claims IT Governance describes the who and how of IT decision making rights and responsibilities among the different stakeholders in the organization. He claims that without IT Governance, the organization would have problems of failed projects, business disruptions, customer concerns, lack of business prioritization and wasted IT investments, unresolved conflicts, IT management not understanding the business and executives not taking responsibility for IT enabled business change, and decreasing shareholder value, among others.

Peterson views IT Governance as important for sustained business value, to meet the complex challenges of the organization that includes diversity, centralization, decentralization, shareholder value, strategic flexibility to address multiple value drivers, costs and time effectiveness, to meet customer demands in a rapid and efficient manner, and to add value in a specific area and maintain threshold standards in other areas at the same time. He claims it is also important for conflict resolution, negotiation, and coalition building. According to Peterson, organizations need to maintain corporate and business unit to IT relationships. He claims there needs to be control of the IT decision making processes, and at the same time, empower stakeholders to take responsibility for IT decisions.

Peterson takes the position that IT Governance needs to maintain governance to meet all business needs across the enterprise and to empower the stakeholders to make appropriate decisions and take responsibility for those decisions all at the same time. He explains that most organizations cannot look at just a centralized view or a decentralized view any longer. Most organizations need a combination of both, he calls a federal view. Peterson claims the federal IT governance challenges managers to surrender control of certain business specific IT domains for the well-being of the enterprise as a whole and to develop business to corporate and business to IT partnerships.