1. Discussion of “Towards a Deeper Understanding of IT Governance Effectiveness: A Capabilities Approach" by Prasad, Heales, Green
Kevin Kobelsky

2. Key Comments Objective of Paper:
“Increase our knowledge of the effectiveness of IT governance by considering its relationship with IT-related capabilities (p.5)”
Work done
Impressive sample well analyzed.
Positioning/Contribution:
What’s new?
Methods
Some questions of clarification.

3. What’s New? IT
Governance
IT Capabilities
Performance

4. What’s Old?
Internal Process vs Firm-Level Performance - Both are firm level - Hard to distinguish items - Cross loadings in Table 3 very high ( ) - Why distinguish? -What does Customer Service add? Simplifying….
Performance

5. What’s New? IT IT Capabilities Performance Governance Top Management
Commitment * * * ) 2 2 8 3 R = .
154 . 2 ( 6 . 3 7 ( 2 . 6 . 3 9 2 6 7 * * )
Shared
Internal Process
IT Steering .
230
Organisational . 1 7 1
Performance
Committee ( 3 .
396
***)
Knowledge ( 2 . 5 8 7 * * ) R 2 = .
323 R 2 = .
105 . * * ) 4 5 6 5 9 ( 8 . ( 2 . 8 2 7 1 5 6 * . 2 * * )
Flexible IT
Infrastructure R 2 = .
211 IT
Governance
IT Capabilities
Performance

6. What’s Old?
IT Investment
IT Investment
The Search for Moderators to help explain variations in performance Established that all are important
Top
Management
Commitment R 2 = .
154
Shared
Internal Process
Organisational
Performance
Knowledge 2 2 R = .
323 R = .
105 n s
Flexible IT
Infrastructure R 2 = .
211
Controls
IT Capabilities
Performance

7. What’s New? IT Governance IT Capabilities Top Management Commitment *) 3 * * R 2 = .
154 6 . 2 8 2 ( . 3 9
Shared
IT Steering .
230
Organisational
Internal Process
Performance
Committee ( 3 .
396
***)
Knowledge R 2 = .
323 R 2 = . . 4 5 9 ( 8 . 2 7 1 * * * )
Flexible IT
Infrastructure R 2 =
.211 IT
Governance
IT Capabilities

8. What’s New? Focus on: IT Steering Committee
The ORIGINAL IT governance mechanism.
Used everywhere.
What is the tension concerning whether they will work?

9. What’s New? IT Strg Comm → Mgmt IT Commitment
Aren’t ITSC’s composed of top mgrs? (Karimi et al, 2000)
If so, then hypothesis is that formal mechanism will enhance commitment…little tension there.
Further, ITSC #7 defines ITSC effectiveness in terms of “ability to create top mgmt commitment.” Even if conceptually separate, measure makes them overlap, could drive findings.
Helpful to develop further.

10. What’s New? IT Strg Comm → IT-Business shared knowledge
Again, formal mechanism that requires input of business users will enhance knowledge of the other’s domain.
This notion is central to the IT Alignment literature and is well established. So, what is the tension re IT Steering Committee?

11. What’s New? IT Strg Comm → Sharing-focused IT infrastructure
Formal process for IT is associated with more integrated data sharing, formal systems standards
How could the opposite be true (tension)?
Flexibility is not the same as scope of data-sharing. Legacy systems may share enormous amounts of data, but it is not a flexible infrastructure. User vs IT support focus.

12. What’s New? IT Strg Comm → Performance?
Formal process for IT is associated with better business process/software fit? i.e. do ITSCs help pick portfolios of projects that better enhance firm level performance?
Not examined.

13. Methods Use of PLS/factor analysis
Creates a model that best explains the last (right-most) variables.
Based on above arguments, the left-most relations (IT governance to IT capabilities and performance) are those of greatest interest.
Performance variables should be formative, not reflective (e.g. selling cost per employee may decline independently of total labour costs). Factor analysis inappropriate. Helpful to clarify to reader how this was handled.

14. Methods Control for respondent type
Consider controlling for respondent type. All IT variables are positively correlated. Since single respondent for all constructs, could be that Director of MIS respondents have a more positive view of IT in all its aspects, and see their firms doing better than a CFO would.
Add dummy control variable for CFO vs non-CFO, then in separate analysis, dummy for MIS vs non-MIS.