IT Governance Assignment: EGIT, Alignment, and Value

This document provides a comprehensive solution to an IT governance assignment, addressing key concepts such as Enterprise Governance of IT (EGIT), the shift from IT Governance, and the importance of business/IT alignment. The solution explores the components of business/IT alignment using the Strategic Alignment Model (SAM), discusses the challenges in achieving alignment, and explains the concept of IT-enabled value and its measurement difficulties. The assignment delves into the relationship between EGIT, alignment, and value creation, and illustrates important structures, processes, and relational mechanisms for EGIT, including governance practices relevant for board involvement. Furthermore, the document examines how business/IT alignment can be measured through various approaches, including Luftman's model, and explores the relationship between EGIT and business/IT alignment. It also discusses the impact of cultural differences on business/IT alignment maturity and concludes with a description of the IT black hole concept.

Running head: IT GOVERNANCE
IT governance
Name of the Student:
Name of the University:
Author Note:

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Part A:
1. Define EGIT and explain the shift from IT Governance towards EGIT
Enterprise Governance in known as EGIT. It is considered as integral part of corporate
governance. EGIT enables both IT and business unit of the organization to work together for the
implementation of proper business strategy.
It has been seen that the IT governance is limited to the IT domain. It has been seen that
even the CEO does not want to take part in the discussion regarding the IT governance issues.
Instead he or she recommends CIO to discuss the matter. Many of the business solutions are
driven by IT. It is expected in this situation to take the lead role by the business units. The value
of business from the investments in IT cannot be measured . This raises that matter regarding the
involvement of the business unit in IT. This makes it obvious to shift the IT governance towards
EGIT.
2. Explain and discuss the components of the concept of business/IT alignment
The business components and IT alignment can be discussed through the Strategic
Alignment Model (SAM). There are internal components and external components. Internal
component includes infrastructure process and information system infrastructure along with the
processes. External components are Business strategy and IT strategy. SAM model has two
building blocks- functional integration and strategic fit. Strategic fit explains IT as external
business domain. Functional integration are of two types- strategic and operational integration.
The link between the IT strategy and the business strategy is obtained by strategic integration.
On the other hand operational integration is the link between the IT infrastructure and
organizational infrastructures.

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3. Discuss why alignment can be difficult to achieve in organizations
One of the challenges regarding the alignment between the It and the business unit are the
multi-faced and the complex structure of the SAM framework. The number of difficulties and
the barriers can be experienced during the alignment between the business and IT. These barriers
include organizational behavior from the senior management and the lack of direction in the
business strategy. This leads to the misunderstanding and miscommunication between the
different departments of the organization. In the other hand specification barriers include the lack
of involvement of IT in strategy making. This makes the business unit and IT unit two different
and separate department. Implementation barriers are the barriers that includes the political,
technical and organizational constraints.
4. Explain the concept of “IT-enabled value” and discuss why it is difficult to
demonstrate
The concept of IT-enabled value defines that the business organizations are getting
advantages in the business market through the use of IT infrastructure. It has been seen that the
IT strategies improves the performance of the business. From the investment in IT creation of
business value can be developed. However, measurement of the IT value is difficult. There are
various instruments those are available for measuring the IT costs and benefits. The qualification
of the cost and benefit values assigned to the monetary values traditional measurements like
ROI, net present value of the business can be calculated. In the tradition approach of measuring
the IT value, both numeric value and the status of cost and benefits are needed, so it is become a
problem to het the exact IT value in many cases.

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5. Describe and discuss the relationship between EGIT, alignment and value creation
EGIT is the better form of IT governance that synchronize the business unit and IT unit
of the organization. EGIT explains the mutual dependency between the IT unit and the business
unit. Apart from that it explains the presence of the business value measurement in the context of
IT implementation in an organization.
The IT value defines the improvement of the business through the implementation of
technology. EGIT can support measuring the IT value as it reflects the results from the analysis
of the IT value. These two attributes defines the alignment of the business towards the
technology.
Part B
1. Discuss and illustrate important structures for Enterprise Governance of IT
The important structure of IT governance in Enterprise is as follows-
 Daily execution of IT projects (System 1)
 Service delivery and IT operations(System 2)
 Monitoring the IT projects on daily basis (System 3)
 Innovation and the management of portfolio (System 4)
 Maintaining IT governance, principals and architecture ( System 5)
Daily production of the IT in Enterprise services indicates production function. It enables the
organization to do the work in a periodic way. Coordination function deals with day to day
coordination of the IT project services and operations. Monitoring and control of the day to day
function is defined by the building block named the execution function. The planning along with

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focus function is concerned about managing the portfolio management and innovation. The
coherence function is concerned about the role of IT and principals regarding the enterprise
architecture.
2. Discuss and illustrate important processes for Enterprise Governance of IT
The important processes of the IT governance in Enterprise are-
 Daily execution of IT projects (System 1)
 Delivery of service and operations(System 2)
 Monitoring of IT projects on day-to-day basis (System 3)
 Innovation and the management of portfolio (System 4)
 Maintaining IT governance, principals and architecture ( System 5)
Governance Management
Evaluate
Direct
Monitor
Plan
Build
Run
Monitor

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3. Discuss and illustrate important relational mechanisms for Enterprise Governance
of IT
Rational mechanism denotes active participation, mutual relationship among IT
management in Enterprise governance of IT and corporate executives. COBIT5 enables the
framework that supports the rational mechanism. COBIT 5 defines the individual and collective
factors those will work in this context. There are seven “Enablers” those are related to the
rational mechanism of Governance of IT. These are- organizational structure, process, culture
and ethics, skill, competencies and people. There are some important aspects of relational
mechanism. These are- business-IT colocation, rewards and incentives, business/IT job rotation
and business/ IT training. Implementation of the right relational mechanism will help in the
better governance structure which enables high performance.
4. Explain the difference between enterprise governance and enterprise management
of IT
Difference between the enterprise governance and enterprise management of IT:
The main objective of the IT governance is to make it sure that the objectives are being
evaluated according to the need of stakeholders. The decision making process and the
management of the organization are done accordingly.
On the other hand, in IT enterprise management the governance is done under the
monitoring of board of directors on activities of the leadership. As for example, if the board of
directors thinks that the implementation of the new technology is permissible for the
organization the leaders are responsible to make the implementation in a proper way. This

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belongs to the domain of IT enterprise management. On the other hand it is the responsibility of
the leader to monitor the employees that the implementation of the functioning for the new
technology is done in a proper way. This is the part of IT governance in enterprise.
5. Identify and discuss governance practices that are most relevant for obtaining
board involvement.
Development of the IT strategy board at the level of board directors is an effective
practice for obtaining the board involvement regarding governance practices. This is a way that
supports the presence of the board in the discussion of Enterprise IT governance issues. It has
been seen that most of the organizations are not concerned about the fact regarding the board
involvement in mitigation of the IT issues. Through the voluntary disclosure theory the
importance supports the importance of the Enterprise IT governance in context to the
communication with the external stakeholders. The management of stakeholders needs major
initiatives like involvement of the CEO or the board of management in the discussion regarding
the IT issues. This supports the involvement of the IT strategy department in the management
board level.
Part C
1. Discuss how business/IT alignment can be measured and determine which the most
practical approach is.
There are several ways through which the business/ IT alignment can be measured for
determination of the most practical approach. Each of the measurement models has different
approach and the results may be different for each time. Some of these approaches are- matching

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and moderation, profile deviation, the scoring approach, maturity model approach. In the
matching and moderation approach, the experts look for parallel functioning between IT and
business. If difference of score between the IT and the business is high, it can be said that the
alignment is low. On the other hand if the score of the difference is low it can be said that the
alignment is high. In the profile deviation approach, at initial stage ideal alignment scenario is
evaluated. In the next step the deviation is done from this ideal situation. In the scoring approach,
the method is evaluated the alignment on the basis of different tangible and non-tangible factors
such as strategic match for the project, return of investments. Total scores are based on the
nontangible factors and return of investment. The current degree of alignment can be determined
through the maturity model approach. This method supports the organization to rate themselves
from non-existence (0) to optimized (5).It is an easy to understand as-is and to-be position of the
organization.
2. Explain how business/IT alignment can be measured through Luftman’s model.
Luftman proposed a model known as BIA maturity model. There are six factors related to
the model. These six factors are –Communication, Measurement of value, Governance,
Partnership, Scope and architecture and skills. Communication attribute defines the
understanding of the technical and the business staffs. Apart from that the connection between
the business and the technical unit is discussed through this attribute. The performance
measurement is done through the measure of value. The governance attribute denotes if the
project is relevant with the understanding of the business strategy. The partnership attribute
measures the risks in the context of the partnership between the business and IT. The scope and
architecture will define the opportunities and effectiveness of the IT implementation in the

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organization. The evaluation of the required skills of the staffs and the employees are measured
through the skill attribute.
3. Explain the relationship between Enterprise Governance of IT and business / IT
alignment.
Relationship between the Enterprise Governance and business/ IT alignment is dependent
on the organization. The IT governance in enterprise is related to the monitoring and evaluate the
performance of the IT implementation in the organization. It is also concerned about the value
organization is achieving through the IT implementation. The IT governance in enterprise is
only concerned about the performance of the organization from the IT business perspective. On
the other hand, enterprise governance is concerned about synchronization of business unit and IT
unit.
It can be said that in both cases, the monitoring and evaluation of the IT performance is done.
However, in the enterprise government, the evaluation also includes other aspects of the business
and the value of IT implementation is measured through the business perspective.
4. Discuss the impact of cultural differences on business / IT alignment maturity.
The cultural differences makes a significant impact on the business/ IT alignment. The
difference in the alignment due to the cultural differences is measured through the Hofstede
framework.
Part D
1. Describe the concept of the IT black hole.
The IT black hole is a concept that defines the probability that the money invested for the
IT implementation may not return back through the expected results. This concept is related to

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the IT business value. In order to mitigate the probability of the IT Black hole, tangible and
intangible costs are needed to be measured before the IT implementation in the organization.
2. Explain why and how the business case could be used in the context of an IT-
enabled investment.
The measure of IT investment is dependent on various factors like risks, requirements
and the cost along with time. In order to manage all these things during the implementation
phase portfolio management, program management and project management can be beneficial.
3. Explain how the balanced scorecard can be applied to the IT function.
The balanced score card is applied in the context of the IT function along with the
processes and the projects. There are four perspective of the balanced score card those are
needed to be translated in this case. These four perspectives are- Operational Excellence, User
orientation, Business contribution and future orientation. Each of these perspectives are mapped
into the metrics for the organization.
4. How can you leverage the IT BSCV as a management and alignment instrument
IT BSCV assigns different scores for the different perspectives. There are two
perspective present in this case- measurement of outcome and drivers for performance. A well-
developed score card will have a good combination of two metrics. Through this framework, the
linkage is done between the perspective from the business contribution and the business.

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5. Explain and illustrate the difference between outcome measures and performance
drivers.
Outcome measures develops the process of the communication between the IT and the
business department for achieving the organizational objectives. On the other hand performance
drivers measures the effectiveness of the strategy taken for the improvement of the business.
Outcome measures Performance drivers
Develops the communication between IT and
business department.
Measurement of the effectiveness of the
business.
Does not dependent on the efficiency of the
employees
Is dependent on the performance of
employees.

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