A New Perspective on IT Governance in SMEs
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Transcript of A New Perspective on IT Governance in SMEs
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Jan Devos - 8/11/2012Faculty of Engineering and Architecture – Campus Kortrijk
A new perspective on IT Governance in SMEs
Dr. ir Jan Devos
ECCF 2012 Conference Skopje MK
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Outline of the presentation- Corporate Governance and IT Governance- Why IT Governance? - Is IT Governance a concept for SMEs?- New findings- Conclusions
pag. 2 Jan Devos - 8/11/2012Faculty of Engineering and Architecture – Campus Kortrijk
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pag. 3 Jan Devos - 8/11/2012Faculty of Engineering and Architecture – Campus Kortrijk
Corporate Governance
Strategic Information Systems
IT Governance
Weill, 2004; Van Grembergen, 2000
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IT Governance • Separating Governance from Management• Meeting Stakeholders needs• IT-Business Alignment• Benefits Management• Risk Management• Compliance
GRC (Governance, Risk, Compliance)
pag. 4 Jan Devos - 8/11/2012Faculty of Engineering and Architecture – Campus Kortrijk
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IT Governance Separating Governance from Management
Governance: Board of directors under leadership of chairperson Evaluate, Direct and Monitor
Management: Executive management under leadership of CEO Plan, Build, Run and Monitor
pag. 5 Jan Devos - 8/11/2012Faculty of Engineering and Architecture – Campus Kortrijk
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IT Governance • Meeting Stakeholders needs• IT-Business Alignment• Benefits Management• Risk Management• Resource Management
Jan Devos - 8/11/2012Faculty of Engineering and Architecture – Campus Kortrijk
pag. 6
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Outline of the presentation- Corporate Governance and IT Governance
- Why IT Governance? - Is IT Governance a concept for SMEs?- New findings- Conclusions
pag. 7 Jan Devos - 8/11/2012Faculty of Engineering and Architecture – Campus Kortrijk
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Why bring IT on the agenda of the board? • 1980s: IT Failures (Lyytinen, 1987)
• 1990s: IT productivity paradox (Brynjolfsson, 1998)
• 2000s: IT doesn’t matter (Carr, 2003)
• 2012: Cloud, BYOD, Mobile, Security, …
Still 70% of all IT projects do not deliver on time, on budget or with all defined requirements…
pag. 8 Jan Devos - 8/11/2012Faculty of Engineering and Architecture – Campus Kortrijk
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Outline of the presentation- Corporate Governance and IT Governance- Why IT Governance?
- Is IT Governance a concept for SMEs?- New findings- Conclusions
pag. 9 Jan Devos - 8/11/2012Faculty of Engineering and Architecture – Campus Kortrijk
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Jan Devos - 8/11/2012Faculty of Engineering and Architecture – Campus Kortrijk
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Source: website Europe (http://ec.europa.eu/enterprise/policies/sme)
What usually gets lost is that more than 99% of all European businesses are, in fact, SMEs.
They provide two out of three of the private sector jobs and contribute to more than half of the total value-added created by businesses in the EU. Moreover, SMEs are the true back-bone of the European economy, being primarily responsible for wealth and economic growth, next to their key role in innovation and R&D.
What is even more intriguing is that nine out of ten SMEs are actually micro enterprises with less than 10 employees. Hence, the mainstays of Europe's economy are micro firms, each providing work for two persons, in average.
This is probably one of the EU's best kept secrets!
Jan Devos - 8/11/2012Faculty of Engineering and Architecture – Campus Kortrijk
pag. 11
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Is IT Governance a concept for SMEs ? Theoretical Foundations of
IT Governance - Control Theory (Coase, 1937,
Eisenhardt, 1989)
Alignment of interests
- Agency Theory (Jensen & Meckling, 1976)
Moral Hazard / Adverse Selection
- Mistrust in human behavior (Ghoshal, 2005) - Amoral theories ?
→ Large organizations
Small and Medium-sized Enterprises
- Theory of the growth of the firm (Penrose, 1951)
- Resource Based Theory- Less separation between the
right of ownership and the right to control
- People centric (CEO): trust, empathy
Jan Devos - 8/11/2012Faculty of Engineering and Architecture – Campus Kortrijk
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Independency • Not owned by a larger firm; family firms, start-ups • Not depended for decision-making• Entrepreneurial risk ≠ Risk Management • Less separation between the right of ownership
and the right to control• Weak concept of Corporate Governance
Jan Devos - 8/11/2012Faculty of Engineering and Architecture – Campus Kortrijk
pag. 13
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Personal Influence of the CEO • Two arms, two legs and a giant ego (Levy, 2005)
• Influence of CEO is paramount for success• Personal beliefs• Does the CEO believe in IT as an enabler for
innovativeness?
Jan Devos - 8/11/2012Faculty of Engineering and Architecture – Campus Kortrijk
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Flexibility and Innovation • Influence of CEO is paramount • Lack of innovativeness due to cost • Lack of managerial and technical capabilities due
to low maturity and resource poverty
Jan Devos - 8/11/2012Faculty of Engineering and Architecture – Campus Kortrijk
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Outline of the presentation- Corporate Governance and IT Governance - Why IT Governance? - Is IT Governance a concept for SMEs?
- New findings- Conclusions
Jan Devos - 8/11/2012Faculty of Engineering and Architecture – Campus Kortrijk
pag. 16
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New Findings - Call for chapters: ‘Information Systems and
Small and Medium-sized Enterprises – State of art of IS research in SMEs’
- Focus: IT Governance- 33 contributions from 22 countries- 16 developed / 17 developing - Findings will be published in 2013 by Springer
pag. 17 Jan Devos - 8/11/2012Faculty of Engineering and Architecture – Campus Kortrijk
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New Findings - IT driver for innovation? Yes but…- Is IT important? Yes but…- Where are the benefits of IT ? Hard to measure - Outsourcing is common in SMEs (constructs: trust, empathy, …)
- Government support for SMEs needed, but difficult- Idiographic nature of SMEs with respect to IT- Strategic thinking about IT ? or a bottom up approach?
Jan Devos - 8/11/2012Faculty of Engineering and Architecture – Campus Kortrijk
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Outline of the presentation- Corporate Governance and IT Governance- Why IT Governance? - Is IT Governance a concept for SMEs?- New findings
- Conclusions
Jan Devos - 8/11/2012Faculty of Engineering and Architecture – Campus Kortrijk
pag. 19
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Conclusions - Existing IT Governance principles too much grounded in a
mechanical view of an organization- An SME is not a cybernetic machine that can be controlled
accordingly - Is there a need for a formal control system for IT? - Is a top-down, linear approach appropriate? - IT Governance too generic and too much based on ‘What
must be done’ and too less on ‘How it should be done’- IT Governance for SMEs should focus more on people
Jan Devos - 8/11/2012Faculty of Engineering and Architecture – Campus Kortrijk
pag. 20
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Questions?
Jan Devos - 8/11/2012Faculty of Engineering and Architecture – Campus Kortrijk
pag. 21