Digitalization is changing the importance of information technology in the company and thus also the roles of the business and IT departments. Below we present the idea of an Adaptive IT Governance with which the new requirements for collaboration between business and IT departments can be successfully mastered.

IT Governance in its Traditional Form

IT governance defines the division of responsibility between business and IT in the organization. Its importance increases with the growing strategic relevance of IT, since an appropriate IT governance is a prerequisite for the value-added use of IT. Traditional governance approaches usually imply a "horizontal" division of labor between the business and IT. The definition of strategic and operational requirements is the responsibility of the business units, while the IT department is responsible for implementing these requirements and operating the technical infrastructure.

The Road to an Adaptive IT Governance

In practice, however, this form of division of labor cannot be maintained in this strict sense: shadow IT, shop floor IT and more recently also product IT show that the departments play a more active role in the IT support of the organization. Digitalization increasingly penetrates business processes with IT. This promotes and requires an active participation of the business. We therefore put forward the following two hypotheses:

  • Hypothesis 1: Business departments no longer only consume IT services, they also create and operate them.
  • Hypothesis 2: A (central) IT organizational unit within the company remains in place to support central and cross-divisional IT services.
  • Altogether, this means that there must be a process of coordination between the business department and the IT department. This process regulates which IT services the business departments themselves should operate to what extent, which quality standards for these "Business Managed" IT services must be observed and how the cooperation between the business departments and IT should take place at the respective interfaces.

    This approach results in an IT governance concept in which the responsibility of business and IT is defined individually for each IT service or group of IT services. Governance can be flexibly adapted to the organization and must also consider changes in the environment and IT services over time.

    This approach therefore represents an "Adaptive IT Governance" and is a basic prerequisite for the long-term successful digitalization of the organization.

    Author: Prof. Dr. Christopher Rentrop