Concept of IT Governance
The world is increasingly getting globalized as technological inventions continue to get advanced in the society. According to Jargon (2011, p. 47), the world has been reduced into a small global village. Thanks to the advanced technologies. This scholar says that the current society highly depends on technology. Technology has been embraced in various sectors of the economy. It has helped standardize processes within firms.
It has also been very important in the management of firms. The management of firms in the current competitive market requires employment of technology. This is because there is need to ensure that in every strategy taken, the management can have a clear knowledge of all the possible results, determine if there will be any possible challenge during the implementation, and how these challenges can be countered.
This can only be possible when the scientific approach to management is introduced. This approach involves applying technology at all the managerial levels of the firm.
IT governance has gained popularity in the twenty first century. As the world gets increasingly globalized, managements have come to realize that they have to globalize their operations. The world markets have been opened up for international trade. Coca Cola, a large American beverage company, has a global coverage. Similarly, Japanese Toyota Motors has global market coverage.
According to Brooke, Lucinda and Yan (2011, p. 350), firms have come to realize that the only way to beat local competition is to go global. This scholar emphasizes the fact that most of the world markets in various industries have global players.
When a firm fails to go global, its local markets would be eaten up by other foreign firms which will enter the local market. The best strategy is always to go global and fight competition from the global perspective.
According to Leighton (2008, p. 110), globalization of various firms has made it necessary to embrace IT governance. A firm such as the Coca Cola Company has its headquarters in the United States of America. However, the firm operates in over 150 countries in the seven continents of the world. The top management cannot possibly run this firm through physical presence in all the branches of this firm.
The management duty in various countries must be delegated to mid management employees working in these regions. These employees must work directly under the instruction of the top management. The vision and mission of the firm, the values and all strategic objectives must trickle down to the employees in all the regions around the world.
Employees must feel the presence of the chief executive in their respective offices irrespective of their location around the globe. This is where technology has always been brought in to help manage such business. IT governance has been relevant in managing large organizations which have a global perspective. Such technologies as video conferencing have become very popular in managing branches that are overseas.
Social media has also offered management strategies through which management of their firms can be improved. As Andreas (2012, p. 37) says, the management can upload a particular video showing how a given activity should be carried out. This video would then be shared in various branches of the firm as a demonstration to the employees on how they are expected to carry out their duties.
IT governance has faced a number of challenges despite the above mentioned advantages. According to Boyd and Ellison (2008, p. 210), the world embraced IT governance without the realization that it also comes with some responsibilities and challenges.
This scholar says that some firms have failed due to overreliance and implementation of inappropriate strategies. Understanding these challenges can help a firm know how to approach IT in its governance strategies. This research focuses on the current and future challenges of IT governance.
Relevance of IT governance in the current society
The business world has got increasing competition. Firms are struggling to keep pace with the competition that is constantly increasing in the market. According to Bennett and Strange (2011, p. 57), firms are under pressure to improve their performance in their respective markets. Customers are currently willing to pay less because they have various alternatives in the market.
Suppliers are demanding more because they have gained monopoly in the market. Business units find themselves in the middle of these two pressures. It has to survive. It has to meet the demands of both ends. This requires a high degree of efficiency. Managements must find ways of reducing their expenditures as they struggle to increase their profitability.
The three pressures from the customers, suppliers and competitors are always so massive that when a firm fails to act promptly, it may be edged out of the market. Getting into the market with appropriate technologies is the right approach to take in managing these challenges.
Use of IT in governance has proven to be very resourceful in managing the current competition. Firms are currently trying to reduce such expenses as travel costs of the top managements. This means that an alternative has to be found to enable top management monitor all the units of the firm operating in different regions around the world. The solution has been IT governance.
Managements have also been keen to have a slimmer and more efficient workforce within their facilities. The solution to this has also been IT management. IT management is coming out as a solution to many of the emerging needs of various firms around the world.
The relevance of IT governance in the current business world has been obviously witnessed in many of the international firms around the world. Given the current trends in the market, it is clear that IT governance is here to stay. This is because even smaller business units are finding it appropriate in the management of their small business units.
Current challenges of IT governance
According to Coveney and Highfield (1995, p. 119), IT governance came as a magical solution to most of the problems that large multinational firms had in managing their overseas branches. It was difficult following all the activities taking place in overseas branches without having to move to those branches quite often.
This was not only time consuming, but also a detractive move as the management would be forced to suspend other important managerial duties at the head office while travelling overseas.
The need to eliminate this challenge was great, and when IT governance offered a solution, many firms embraced this solution without having the idea that this technology would be coming along with some challenges. The following are some of the challenges of IT governance in the current society.
As Coombs (2007, p. 2) observes, one of the leading challenges of IT governance is absence of properly documented strategies. In most of the current organizations that use IT government, the strategy of coming up with new approaches to managing various issues in the market has changed.
Documentation is constantly growing unpopular as managements and employees embrace the casual nature of approaching the changing trends in the market. This casual trend in important in managing dynamism and ensuring that the firm remains flexible to changes. However, it is very challenging for the management to trace a strategy that was used to bring a particular success or that which brought failure within the firm.
This is because there is no documentation that can help trace this history. Managements are, therefore, forced to have a rough memory of these strategies so that those that have brought success can be maintained, and those that brought failure can be eliminated. It reaches a time where the memory cannot hold any longer.
In such incidents, the management may realize that it ends up repeating some of the mistakes it did in the past. Because they were not documented, a repeat mistake can be very common.
Communication within the firm has greatly been improved with the introduction of e-governance. However, Barthe (2010, p. 93) says that technology has also affected communication to a great deal.
This scholar says that in as much as technology has created an environment where the management can communicate with employees irrespective of their location, it has brought with it opportunity to manipulate various issues within the firm.
An officer who is interested in taking a different approach from that favored by the management can easily sabotage the communication network and implement his or her strategy without getting information from the top management only to blame the same technology later. This can be very dangerous to the management, especially when the implemented strategy goes in contrary to the set overall objectives of the firm.
IT governance also eliminates the physical presence of the two individuals who are communicating. Physical presence is always important in communication as it helps develop a cord and trust between the two communicating parties.
Daft (2009, p. 47) says that deriving of tactical plans has been a real challenge in an environment where management heavily relies on IT governance. According to this scholar, tactical plans are always developed out of the daily activities of the firm.
When the management has a direct contact with employees and all the activities taking place within the firm is properly documented, coming up with a strategy of how to manage market competition through tactical plans is easier. An employee would easily give a suggestion to the management.
Because of the physical presence of the manager, he or she is able to discuss the issue, assess its relevance given the prevailing circumstance, and determine how it can be implemented within the firm.
In IT governance, this possibility is eliminated. Managers are not physically present at operational levels of the firm. Developing tactical plans that can help define the daily running of the firm cannot be properly defined. This is worsened by the absence of documentation within the firm.
Costs of installing and maintaining IT system within the organization may be prohibitive. As shown in the discussion above, the need to embrace IT governance is unquestionable, especially given the emerging trends in the market. However, the cost of developing and maintaining some of the IT system can be very high.
According to Amrosini, Johnson and Scholes (1998, p. 59), most firms can easily afford the costs of installing and maintaining the system within the firm. However, the system can malfunction or can be sabotaged. A firm that heavily relies on IT governance can incur huge costs in case its IT system is sabotaged. The cost resulting from such sabotages and malfunctioning of the system may result in loses that may take years to recover.
This will have a massive impact on the firm. As Coulter (2009, p. 94) says, the impact can be huge that a firm may face serious litigation cases for non delivery of their products to the clients. The long legal battles will not only have further financial damage to the firm, but will also damage the image of the firm in the market. This consequence may be too devastating that a firm may be forced out of the market.
Data security within the plant has been another challenge that firms are facing in implementing IT governance in their management strategies. The Wikileaks may be popular among various quarters for its ability to hijack into one of the most secure systems, the US Intelligence System.
However, this only demonstrates how insecure the internet can be. If the US Intelligence System was hijacked and important confidential information released to the public, then no firm can claim to be safe when using IT governance. According to Cavusgil, Knight and Riesenberger (2012, p. 29), for a firm to operate successfully in the market, it should have competitive advantage over other firms in the market.
This means that it must have unique management strategies that its competitors do not have. Firms are always struggling to get the strategy that is making their competitors strong in the market, while ensuring that their strategy remains a secret.
When a firmâs secret can easily be available to the competitors, then it may not be very successful. The best approach that a firm should take is to ensure that the strategies are communicated in a manner that cannot be detected by competitors. This may involve avoidance using IT governance at some stages.
Possible future challenges of IT governance
The future is very bright with the use of IT governance in various firms in the society. According to Andzulis, Panagopoulos, and Rapp (2012, p. 310), implementing IT within the firm can help it manage various issues within a very short time. It helps in eliminating the need for constant travels that is always common within organization.
However, given the current challenges that firms face in the implementation of IT governance, it may be a fact that the future of IT governance may still be clouded with some challenges. The following are some of the possible challenges that firms may face in implementing IT governance in future.
Loss of important data, or what Anderson (2011, p. 48) describes as data theft might increase with increased reliance of IT governance within firms. Competition in the current market has gotten so stiff that other firms would wish downfall of their competitors. Others do not always stop a wishful thinking. They make efforts to try and sabotage operations of their competitors in order to bring them down.
This can be very dangerous given that most firms shall be relying on e-governance to improve their operations. A competing firm would be in a position to trace important data within the data base of a firm and manipulate this data, or even steal it. This may result in serious consequences to the firm.
When important data about a firm in regard to issues such as the customers and suppliers accounts, management policies and strategic moves, transactional activities within a particular period, cannot be traced, it may be disastrous to the firm. Such cases might be common in future with the increase in the reliance of IT governance.
Having a virtual management within a given facility can be very challenging. Given the current trends in the field of technology, it is easy to predict that virtualization of the management shall be a common phenomenon. Firms will try to make their work force slimmer, and this might involve eliminating senior managerial position in their branches.
In their position will be video conferencing strategy that will help reach out for the mid managements and lower cadre employees within the firms. This strategy may seem very appropriate given the current advances that have been made in the field of information and communication technology. However, this strategy eliminates leadership in management.
It eliminates the motivation that a manager would have on employees if he or she would be physically present. It only creates the feeling among the employees, that they are some kind of robotic machines expected to operate by a simple click on the button. This is a discouraging process to the employees that will largely reduce the productivity.
Human being is an interactive creature, and with the current advances made in the field of communication, the need to interact is even becoming greater. Employees need to have a direct physical contact with the top management quite often. This will motivate them and make them feel that they are appreciated.
Conclusion
IT governance is increasingly becoming relevant in the current society. From the discussion above, it is clear that firms are currently considering applying IT governance in their overseas branches.
Even smaller regional firms are finding this strategy very convenient in reducing time and improving efficiency in their operations. However, this strategy comes with a number of challenges. These challenges affect the normal operations of the firm in various ways.
Currently, firms using IT governance have faced a number of challenges when using this strategy. One of the biggest challenges that these firms face is the possibility of a criminal hacking into the management system. Given that the strategy demands that everything is automated within the system, cyber criminals can crack into the system and steal important information that is confidential to the firm.
When such documents are sold to competing firms, the firm may suffer from lack of a competitive advantage in the market. In some cases, such data would not only be stolen, but also be destroyed by hired gangs. When this happens, a firm can be brought to its knees.
In future, there is a possibility of increased challenges in using this strategy. Cyber crime attacks might continue given the current trend. Lack of physical presence may also be a further challenge in future.
List of References
Amrosini, V., Johnson, G & Scholes, K 1998, Exploring Techniques of Analysis and Evaluation in Strategic Management, Financial Times Press, New York.
Anderson, M 2011, Bottom-Line Organization Development: Implementing and Evaluating Strategic Change for Lasting Value, Elsevier, Burlington.
Cavusgil, T., Knight, G & Riesenberger, J 2012, International Business: The New Realities, Pearson, London.
Coulter, M 2009, Strategic Management in Action, Pearson Higher Education, New York.
Coveney, P & Highfield, C 1995, Frontiers of Complexity: The Search for Order in a Chaotic World, Fawcett Columbine, New York.
Daft, R 2009, Organization Theory and Design, Cengage Learning, New York.
Andreas, S 2012, âHow technology is changing the current managementâ, Public Relations Review, vol. 1, no.1, pp. 1-31.
Andzulis, J., Panagopoulos, G & Rapp, Y 2012, âA Review of Social Media and Implications for the Sales Processâ, Journal of Personal Selling & Sales Management, vol. 32, no. 2, pp. 305-316.
Barthe, G 2010, Verification, Model Checking, and Abstract Interpretation, Springer, New York.
Bennett, J & Strange, N 2011, Television as Digital Media, Duke University Press, New York.
Boyd, D & Ellison, N 2008, âSocial Network Sites: Definition, History, and Scholarshipâ, Journal of Computer â Mediated Communications, vol. 13, pp. 210- 230.
Brooke, F., Lucinda, A & Yan, J 2011, âHow publics respond to crisis communication strategies: The interplay of information form and sourceâ, Public Relations Review, vol. 37, no. 4, pp. 345-353
Coombs, T 2007, âCrisis Management and Communicationsâ, Institute for Public Relations. Web.
Jargon, J 2011, âTaco Bell Makes Spicy Resort To Suitâ, Wall Street Journal, vol. 3 no. 2, pp. 34-35.
Leighton, N 2008, âProactive crisis communication planningâ, Social Media, vol. 11, no. 4, pp. 98- 112.