Business Monarchy In a business monarchy senior business executives make IT

Business monarchy in a business monarchy senior

This preview shows page 6 - 7 out of 17 pages.

Business Monarchy In a business monarchy, senior business executives make IT decisions affecting the entire enterprise. At State Street Corporation, the COO, CIO, chief admin- istrative officer (CAO), and senior executives leading the various business units make up an executive com- mittee. The CIO participates as an equal partner with the other leaders. The senior business executives (the CxOs or sometimes called the “C” level executives) make the IT decisions as a group. Typically, business monarchies receive input for key decisions from many sources. For example, input for IT investment decisions at many enterprises, including State Street, come from: (i) the CIO’s direct reports, (ii) the business units, through the IT leadership team, (iii) the enterprise-wide IT budget management proc- ess, (iv) service level agreements and chargeback, and (v) an activity tracking system showing all IT re- sources and how they are deployed. IT Monarchy In an IT monarchy, IT professionals make the IT deci- sions. At UPS, for example, the IT governance com- mittee, which consists of senior IT managers, makes the strategic decisions that impact IT architecture. Enterprises implement IT monarchies in many differ- ent ways, often involving IT professionals from both corporate teams and business units. DuPont has an enterprise IT architecture group with representatives from all regions, all strategic business units, and all competency centers. This group proposes architecture “rules” to the senior IT management team, which con- sists of the corporate CIO and the CIOs of the largest business units. This team makes sure the rules make sense for the business, and it takes responsibility for enforcing architectural standards. Feudal The feudal model is based on the traditions of “merrie olde” England, where each prince and princess, or their designated knights, make their own decisions to optimize their local needs. For IT governance, the feudal estate is typically the business unit, region, or function. Overall, the feudal model in our study was not very common because most enterprises were look- ing for synergies across business units. Federal The federal decision-making model has a long tradi- tion in government. Federal arrangements attempt to balance responsibilities and accountabilities of multi- ple governing bodies spanning at least two hierarchi- cal tiers, such as country and states. Charles Handy and other management writers have identified the use- fulness of the federal model in negotiating the inter- ests of both the entire enterprise and individual busi- ness units. 12 We define the federal model as coordinated decision making involving both a center and its business units (at least two levels of the business hierarchy). Busi- ness-unit representatives in a federal model can be either business unit leaders or business process own- ers, or both. IT leaders, either from business units or corporate, may also participate. In these cases, they add to the federal group, they do not take the place of one of the business groups.
Image of page 6
Image of page 7

You've reached the end of your free preview.

Want to read all 17 pages?

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture