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Enterprise governance of information technology: achieving alignment and value, featuring COBIT 5 (2nd ed.)
De Haes S., Van Grembergen W., Springer Publishing Company, Incorporated, New York, NY, 2015. 167 pp. Type: Book (978-3-319145-46-4)
Date Reviewed: Sep 2 2015

Enterprise governance of information technology (EGIT) represents a modern concept, which is an integral part of corporate governance (CG). CG includes the policies, processes, procedures, customs, institutions, internal rules, laws, and industry regulations used for directing, administering, and controlling a company. Also, it governs the crossed relationships between the company shareholders, the board of directors, and corporate management. Management is distinct from governance, and its level is located under the governance level, so the governance processes direct and control the management processes and all these processes include different activity types. In this way, CG directs and monitors the management to ensure company executives are clearly defining and following the company’s strategic business goal and objectives, while the EGIT managed and controlled by the board of directors is intended to cover the two strategic areas of IT and business processes. From this perspective, the authors define EGIT as overseeing the definition and implementation of corporate processes, structures, and relational mechanisms in the company, which enable both IT and business people to execute their responsibilities in support of business/IT alignment, as well as the creation of business value from IT-enabled business investments. These introductory concepts represent the basic support of this material dedicated to the modern, emerging EGIT knowledge domain in corporations.

The seven chapters of content are intended to serve a large target audience from academic and industry fields including master’s students using it in conjunction with IT courses, executive students in business schools for MBA courses on IT management, and industry practitioners (IT managers, business managers) looking to design and implement an EGIT framework. Chapter 1 deals with basic concepts of EGIT, the business/IT alignment and interrelationships, and the business value from IT investments. The second chapter is dedicated to EGIT implementation in practice. It includes an assessment template of EGIT practices maturity, the practices for EGIT implementation, and the top ten principles of EGIT on how IT and business should collaborate. A case study describes the EGIT at KLM Company, followed by a presentation of relationships between EGIT and the board, and those of the modern intraorganizational governance of IT or “network governance.” The viable system theory (VST) and its related model (VSM) including five subsystems are used for describing the needed functions of an IT governance model.

Chapter 3 details the business/IT alignment. The main topics include approaches for measuring the business/IT alignment, aligning the business and the IT goals, managing relationships among EGIT and business/IT alignment, and exploring the national cultural influence over the business/IT alignment. The authors propose the Hofstede framework with five dimensions for characterizing the national culture and its application for exploring the cultural impact on business/IT alignment. Chapter 4 is dedicated to IT-enabled value, respectively the business value creation from IT investments. It analyzes the “IT black hole” paradox related to IT productivity, by which large sums of money enter the IT departments for investments but no clear evidence of returns, as derived value, are coming out. Further subchapters deal with concepts on how to measure and manage the value of an IT-enabled investment through a business case process. Also, the book addresses concepts about measuring and managing performances and resulting value at an IT department level, using the balanced scorecard (BSC) framework.

Chapters 5 and 6 deal with the COBIT 5 (Control Objectives for Information and Related Technologies) framework for IT governance. Chapter 5 analyzes the five core COBIT principles, enabling processes, domains, and ways to translate them for EGIT. Chapter 6 continues with COBIT concepts as a framework support for executing the IT assurance/audit assignments. Templates are presented for value-based scoping, risk-based scoping, control design testing, and control weaknesses impact testing. Chapter 7 provides guidelines for general EGIT implementation. It outlines the usage of the IT BSC method and associated metrics in order to measure and manage the outcome of an EGIT process. Each chapter includes many diagrams, figures, tables, and flowcharts, and presents specific “assignment boxes” for introducing concepts from references and exercises. Finally, each chapter includes a content summary, study questions, and related references.

This very advanced and valuable book is a must-read for those who want to implement and manage a modern EGIT framework.

Reviewer:  Mihail Sadeanu Review #: CR143741 (1511-0952)
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Project And People Management (K.6.1 )
 
 
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