A new perspective onIT Governance in SMEsDr. ir Jan DevosECCF 2012 Conference Skopje MKJan Devos - 8/11/2012              ...
Outline of the presentation-     Corporate Governance and IT Governance-     Why IT Governance?-     Is IT Governance a co...
Corporate Governance                                                  IT Governance Strategic Information SystemsWeill, 20...
IT Governance•    Separating Governance from Management•    Meeting Stakeholders needs•    IT-Business Alignment•    Benef...
IT GovernanceSeparating Governance from ManagementGovernance: Board of directors under leadership of chairperson Evaluat...
IT Governance• Meeting Stakeholders needs•    IT-Business Alignment•    Benefits Management•    Risk Management•    Resour...
Outline of the presentation-     Corporate Governance and IT Governance- Why IT Governance?-     Is IT Governance a concep...
Why bring IT on the agenda of the board?•    1980s:               IT Failures (Lyytinen, 1987)•    1990s:               IT...
Outline of the presentation-     Corporate Governance and IT Governance-     Why IT Governance?- Is IT Governance a concep...
Jan Devos - 8/11/2012                                       pag. 10Faculty of Engineering and Architecture – Campus Kortrijk
What usually gets lost is that more than 99% of all European businesses       are, in fact, SMEs.       They provide two o...
Is IT Governance a concept for SMEs ?       Theoretical Foundations of                             Small and Medium-size...
Independency• Not owned by a larger firm; family firms, start-ups• Not depended for decision-making• Entrepreneurial risk ...
Personal Influence of the CEO•    Two arms, two legs and a giant ego (Levy, 2005)•    Influence of CEO is paramount for su...
Flexibility and Innovation• Influence of CEO is paramount• Lack of innovativeness due to cost• Lack of managerial and tech...
Outline of the presentation-     Corporate Governance and IT Governance-     Why IT Governance?-     Is IT Governance a co...
New Findings-     Call for chapters: ‘Information Systems and      Small and Medium-sized Enterprises – State of      art ...
New Findings-     IT driver for innovation? Yes but…-     Is IT important? Yes but…-     Where are the benefits of IT ? Ha...
Outline of the presentation-     Corporate Governance and IT Governance-     Why IT Governance?-     Is IT Governance a co...
Conclusions-     Existing IT Governance principles too much grounded in a      mechanical view of an organization-     An ...
Questions?Jan Devos - 8/11/2012                                       pag. 21Faculty of Engineering and Architecture – Cam...
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A New Perspective on IT Governance in SMEs

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A New Perspective on IT Governance in SMEs

  1. 1. A new perspective onIT Governance in SMEsDr. ir Jan DevosECCF 2012 Conference Skopje MKJan Devos - 8/11/2012 pag. 1Faculty of Engineering and Architecture – Campus Kortrijk
  2. 2. Outline of the presentation- Corporate Governance and IT Governance- Why IT Governance?- Is IT Governance a concept for SMEs?- New findings- ConclusionsJan Devos - 8/11/2012 pag. 2Faculty of Engineering and Architecture – Campus Kortrijk
  3. 3. Corporate Governance IT Governance Strategic Information SystemsWeill, 2004; Van Grembergen, 2000Jan Devos - 8/11/2012 pag. 3Faculty of Engineering and Architecture – Campus Kortrijk
  4. 4. IT Governance• Separating Governance from Management• Meeting Stakeholders needs• IT-Business Alignment• Benefits Management• Risk Management• ComplianceGRC (Governance, Risk, Compliance)Jan Devos - 8/11/2012 pag. 4Faculty of Engineering and Architecture – Campus Kortrijk
  5. 5. IT GovernanceSeparating Governance from ManagementGovernance: Board of directors under leadership of chairperson Evaluate, Direct and MonitorManagement: Executive management under leadership of CEO Plan, Build, Run and MonitorJan Devos - 8/11/2012 pag. 5Faculty of Engineering and Architecture – Campus Kortrijk
  6. 6. IT Governance• Meeting Stakeholders needs• IT-Business Alignment• Benefits Management• Risk Management• Resource ManagementJan Devos - 8/11/2012 pag. 6Faculty of Engineering and Architecture – Campus Kortrijk
  7. 7. Outline of the presentation- Corporate Governance and IT Governance- Why IT Governance?- Is IT Governance a concept for SMEs?- New findings- ConclusionsJan Devos - 8/11/2012 pag. 7Faculty of Engineering and Architecture – Campus Kortrijk
  8. 8. 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 ontime, on budget or with all definedrequirements…Jan Devos - 8/11/2012 pag. 8Faculty of Engineering and Architecture – Campus Kortrijk
  9. 9. Outline of the presentation- Corporate Governance and IT Governance- Why IT Governance?- Is IT Governance a concept for SMEs?- New findings- ConclusionsJan Devos - 8/11/2012 pag. 9Faculty of Engineering and Architecture – Campus Kortrijk
  10. 10. Jan Devos - 8/11/2012 pag. 10Faculty of Engineering and Architecture – Campus Kortrijk
  11. 11. 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 Europes economy are micro firms, each providing work for two persons, in average. This is probably one of the EUs best kept secrets!Source: website Europe (http://ec.europa.eu/enterprise/policies/sme) Jan Devos - 8/11/2012 pag. 11 Faculty of Engineering and Architecture – Campus Kortrijk
  12. 12. Is IT Governance a concept for SMEs ? Theoretical Foundations of  Small and Medium-sized IT Governance Enterprises - Control Theory - Theory of the growth of the (Coase, 1937, Eisenhardt, 1989) firm (Penrose, 1951) Alignment of interests - Resource Based Theory - Agency Theory (Jensen & - Less separation between the Meckling, 1976) right of ownership and the Moral Hazard / Adverse Selection right to control - Mistrust in human behavior - People centric (CEO): (Ghoshal, 2005) - Amoral trust, empathy theories ?→ Large organizationsJan Devos - 8/11/2012 pag. 12Faculty of Engineering and Architecture – Campus Kortrijk
  13. 13. 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 GovernanceJan Devos - 8/11/2012 pag. 13Faculty of Engineering and Architecture – Campus Kortrijk
  14. 14. 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 - 8/11/2012 pag. 14Faculty of Engineering and Architecture – Campus Kortrijk
  15. 15. 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 povertyJan Devos - 8/11/2012 pag. 15Faculty of Engineering and Architecture – Campus Kortrijk
  16. 16. Outline of the presentation- Corporate Governance and IT Governance- Why IT Governance?- Is IT Governance a concept for SMEs?- New findings- ConclusionsJan Devos - 8/11/2012 pag. 16Faculty of Engineering and Architecture – Campus Kortrijk
  17. 17. 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 SpringerJan Devos - 8/11/2012 pag. 17Faculty of Engineering and Architecture – Campus Kortrijk
  18. 18. 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 - 8/11/2012 pag. 18Faculty of Engineering and Architecture – Campus Kortrijk
  19. 19. Outline of the presentation- Corporate Governance and IT Governance- Why IT Governance?- Is IT Governance a concept for SMEs?- New findings- ConclusionsJan Devos - 8/11/2012 pag. 19Faculty of Engineering and Architecture – Campus Kortrijk
  20. 20. 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 peopleJan Devos - 8/11/2012 pag. 20Faculty of Engineering and Architecture – Campus Kortrijk
  21. 21. Questions?Jan Devos - 8/11/2012 pag. 21Faculty of Engineering and Architecture – Campus Kortrijk
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