Chapter 1: Introducing EGIT, alignment and value
1. Define ‘EGIT’ and explain the mental shift associated with moving from ‘IT governance’ to
‘EGIT’.
EGIT means Enterprise Governance of IT and concerns issues related to ensuring appropriate
control over IT to enable the creation and protection of IT business value. It involves the
implementation and definition of processes, structures and relational mechanisms that
enable both business and IT stakeholders to take their responsibilities in support of
business/IT alignment, and the creation and protection of IT.
At first, the focus was mainly on the IT side. CIO’s always were IT people, IT governance was
really about governing the IT. But research indicates that business value is not generated by IT
but still generated by business side. For example no business value from CRM if CRM is not
integrated in business operations. Thus the involvement of business stakeholders in the
governance of IT is crucial. EGIT goes beyond the governance of IT and extends to the
business processes needed to create and protect IT business value.
2. Explain and discuss the components of the concept ‘business/IT allignment’ as described in
the strategic alignment model (SAM).
Business/IT alignment is the fit and integration among business strategy, IT strategy, business
structures and IT structures. It answers to major questions: “How is IT aligned with
business?” and “How is business aligned with IT?”.
SAM is based on 2 building blocks: ‘strategic fit’ and ‘functional integration’. Strategic fit
concerns an internal and external domain, functional integration concerns strategic and
operational integration. To avoid underestimation of 1 of the building blocks, a multivariate
approach should be used, so that its ensured the organization focuses on both the internal
and external domain.
3. Discuss why business/IT alignment can be difficult to achieve in organizations.
There arise three type of barriers when dealing with the alignment challenge:
- Expression barriers: lack of direction in terms of business strategy. Leads to insufficient
understanding of the organization’s strategy by operational management.
- Specification barriers: business and IT management that conduct 2 different monologues.
Business and IT strategies are developed in isolation.
- Implementation barriers: Technical, political or financial constraints on the current
infrastructure. Example: difficult integration of legacy systems.
4. Explain the concept of ‘IT business value’ and discuss why it is difficult to measure.
IT business value is how and to what extent the use of IT contributes to organizational
performance. It is difficult to measure as there exist both tangible and intangible aspects, as
well as internal and external aspects of IT business value. There are also different levels of
measuring the IT business value: firm-wide IT infrastructure, business unit IT applications,
business unit operations, business unit financials. Strong IT investments have impacts on
measures from all the hierarchical levels, weak IT investments only show impact on the lower
hierarchical levels.
, Multi-criteria methods may solve this difficulty: BSC, information economics, …
5. Describe and discuss the relationship between EGIT, business/IT alignment, and IT business
value.
EGIT addresses the definition and implementation of relational mechanisms, structures and
processes that enable both IT and business stakeholders to execute their responsibilities in
support of business/IT alignment and the creation and protection of IT business value. This
means that EGIT is an important enabler of business/IT alignment. Business/IT alignment is
about ensuring that the business needs are aligned with the IT needs, as defined in the SAM.
This again is an enabler for IT business value, which means that IT itself will not generate
business value, but value from IT will only be realized if both IT and business are involved.
Measuring this however, is not easy, therefore exist multi-criteria methods.
Chapter 2: Enterprise Governance of IT (EGIT)
1. Discuss and illustrate an EGIT structure.
EGIT structures include organizational units and roles responsible for making IT decisions and
for enabling contacts between business and IT management decision-making functions. An
example of a structure is the IT steering committee. This is a committee where both business
and IT people come together on a regular basis. In this committee, they discuss the decisions
to be made about IT investments and make sure the interests of business and IT are and stay
aligned. Another example of a structure is the reporting line. A CIO should always report to
CEO instead of CFO to look at IT as an asset instead of a cost.
2. Discuss and illustrate an EGIT process.
EGIT processes refer to the formalization and institutionalization of strategic IT decision-
making and IT monitoring procedures, to ensure that daily behaviors are consistent with
policies and provide feedback to decisions. An example of such a process is portfolio
management. This is a prioritization process for IT investments and projects in which business
and IT is involved.
3. Discuss and illustrate an EGIT relational mechanism.
EGIT relational mechanisms are about the active participation of, and collaborative
relationship among, corporate executives, IT management, and business management. An
example of a relational mechanism is job rotation. This means that IT staff is working in the
business units and business staff is working in the IT units. Another example is co-location,
where business people and IT people are physically located together.
4. Discuss and illustrate EGIT mechanisms that are relevant to effectuate board involvement.
It is widely recognized that the involvement of the board in IT has a significant positive impact
on the organizational performance. This is justified by the definition of EGIT (‘… is an integral
part of the corporate governance, for which the board is accountable, …’) and this is backed
by numerous study on this topic. Although this is so widely accepted, it remains more of an
exception in practice rather than a convenience.
