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Kevin Kobelsky

Discussion of “Towards a Deeper Understanding of IT Governance Effectiveness: A Capabilities Approach" by Prasad, Heales , Green. Kevin Kobelsky. Key Comments. Objective of Paper:

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Kevin Kobelsky

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  1. Discussion of “Towards a Deeper Understanding of IT Governance Effectiveness: A Capabilities Approach"by Prasad, Heales, Green Kevin Kobelsky

  2. Key Comments Objective of Paper: “Increase our knowledge of the effectiveness of IT governance by considering its relationship with IT-related capabilities (p.5)” Work done Impressive sample well analyzed. Positioning/Contribution: What’s new? Methods Some questions of clarification.

  3. What’s New? ITCapabilities IT Governance Performance

  4. What’s Old? Internal Process vs Firm-Level Performance- Both are firm level- Hard to distinguish items- Cross loadings in Table 3very high (.55-.83)- Why distinguish?-What does Customer Service add?Simplifying…. Performance

  5. What’s New? Top Management Commitment ) * 2 * * R = 0 . 154 0 3 . 2 8 3 2 7 ( . 2 6 . ( 6 6 2 7 9 * 3 * ) . 0 Shared Internal Process 0 . 1 7 1 IT Steering 0 . 230 Organisational Performance 7 * * ) ( 2 . 5 8 Committee ( 3 . 396 ***) Knowledge 2 R = 0 . 323 2 R = 0 . 105 ) 0 * . * 4 5 6 5 8 9 . 2 ( 8 ( . 6 2 5 7 2 1 . 0 * * * ) Flexible IT Infrastructure 2 R = 0 . 211 IT Governance ITCapabilities Performance

  6. IT Investment IT Investment What’s Old? Top Management The Search for Moderatorsto help explain variations in performanceEstablished that all are important Commitment 2 R = 0 . 154 Shared Internal Process Organisational Performance Knowledge 2 R = 0 . 323 2 R = 0 . 105 s n Flexible IT Infrastructure Controls 2 R = 0 . 211 Performance ITCapabilities

  7. What’s New? Top Management Commitment ) * 2 * * R = 0 . 154 3 8 2 . 6 ( 2 9 3 . 0 Shared Internal Process IT Steering 0 . 230 Organisational Performance Committee ( 3 . 396 ***) Knowledge 2 R = 0 . 323 2 R = 0 . 0 . 4 5 9 ( 8 . 2 7 1 * * * ) Flexible IT Infrastructure 2 R = 0 .211 ITCapabilities IT Governance

  8. What’s New? Focus on: IT Steering Committee The ORIGINAL IT governance mechanism. Used everywhere. What is the tension concerning whether they will work?

  9. What’s New? IT StrgComm → Mgmt IT Commitment Aren’t ITSC’s composed of top mgrs? (Karimi et al, 2000) If so, then hypothesis is that formal mechanism will enhance commitment…little tension there. Further, ITSC #7 defines ITSC effectiveness in terms of “ability to create top mgmt commitment.” Even if conceptually separate, measure makes them overlap, could drive findings. Helpful to develop further.

  10. What’s New? IT StrgComm → IT-Business shared knowledge Again, formal mechanism that requires input of business users will enhance knowledge of the other’s domain. This notion is central to the IT Alignment literature and is well established. So, what is the tension re IT Steering Committee?

  11. What’s New? IT StrgComm → Sharing-focused IT infrastructure Formal process for IT is associated with more integrated data sharing, formal systems standards How could the opposite be true (tension)? Flexibility is not the same as scope of data-sharing. Legacy systems may share enormous amounts of data, but it is not a flexible infrastructure. User vs IT support focus.

  12. What’s New? IT StrgComm → Performance? Formal process for IT is associated with better business process/software fit? i.e. do ITSCs help pick portfolios of projects that better enhance firm level performance? Not examined.

  13. Methods Use of PLS/factor analysis • Creates a model that best explains the last (right-most) variables. Based on above arguments, the left-most relations (IT governance to IT capabilities and performance) are those of greatest interest. • Performance variables should be formative, not reflective (e.g. selling cost per employee may decline independently of total labour costs). Factor analysis inappropriate. Helpful to clarify to reader how this was handled.

  14. Methods Control for respondent type Consider controlling for respondent type. All IT variables are positively correlated. Since single respondent for all constructs, could be that Director of MIS respondents have a more positive view of IT in all its aspects, and see their firms doing better than a CFO would. Add dummy control variable for CFO vs non-CFO, then in separate analysis, dummy for MIS vs non-MIS.

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