Governance Models
The term “IT governance” refers to the system for managing and regulating the structures of an IT organization (its procedural and organizational make-up). Its job is to make sure that IT management and its organizational structures and processes are arra
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Governance Models Carsten Glohr
The term “IT governance” refers to the system for managing and regulating the structures of an IT organization (its procedural and organizational make-up). Its job is to make sure that IT management and its organizational structures and processes are arranged in such a way that they support the wider strategy of the business in the most effective and cost-efficient way possible. IT organizations have to cope with enormous cost pressures. They are forced to fulfill critical business requirements with increasingly limited resources. Modern IT governance models help balance these tensions with professional customer-supplier relationships. In response to the above-mentioned cost pressures, the supply side is witnessing an increasing trend towards industrialization and standardization. On the demand side, IT needs to keep adjusting to the business and its requirements. The result is a degree of complexity and diversity required by the business that cannot be reduced or consolidated down beyond a certain minimum without a negative effect on the business’s responsiveness. The resulting pressure is particularly strong in more mature sectors of industry that have to cope with higher cost burdens, where IT often becomes an integral part of the product (e.g. in telecommunications or modern retail banking) or of the business model itself. The internet age means that most industries are already conducting a significant part of their business via “Business-over-IT” platforms. Virtually every aspect of their business processes is supported by IT systems and would now be unthinkable without IT. Reduced timeto-market, leaner, automated business processes, and improved business intelligence mean that IT has had to become more dynamic and agile than ever before.
C. Glohr (*) Detecon International GmbH, Sternengasse 14–16, 50676 Ko¨ln, Deutschland e-mail: [email protected] F. Abolhassan (ed.), The Road to a Modern IT Factory, Management for Professionals, DOI 10.1007/978-3-642-40219-7_9, # Springer-Verlag Berlin Heidelberg 2014
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What this has created is an inherent target conflict, as the other side of the equation is the increasing cost burden for the IT supply side, which has responded with more and more industrialization. The standardization and reduction of diversity in IT operations has had a positive impact on many cost drivers. Increasingly standardized IT services are thus becoming cheap “commodities”, IT components with less variety and diversity between them. This has made them less distinctive and more easily replaceable, which allows companies to procure them from other providers in the market and simply assemble them into the final IT service packages that they sell as custom solutions for their clients. As in many manufacturing businesses, this move towards less variety has led to faster learning curves and greater productivity. Using standard software or technologies like SOA, object orientation, or virtualization boosts this process of industrialization even
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