Information Technology Governance in Information Technology Investment Decision Processes: the Impact of Investment Characteristics, External Environment, and Internal Context

Xue et al./IT Governance in IT Investment Decision Processes

RESEARCH ARTICLE

INFORMATION TECHNOLOGY GOVERNANCE IN INFORMATION TECHNOLOGY INVESTMENT DECISION PROCESSES: THE IMPACT OF INVESTMENT CHARACTERISTICS, EXTERNAL ENVIRONMENT, AND INTERNAL CONTEXT1

By: Yajiong Xue College of Business East Carolina University Greenville, NC 27858 U.S.A. xuey@ecu.edu Huigang Liang Fox School of Business Temple University Philadelphia, PA 19122 U.S.A. hliang@temple.edu William R. Boulton College of Business and Economics Western Washington University Bellingham, WA 98255 U.S.A. william.boulton@wwu.edu

Abstract

This study identifies governance patterns for information technology investment decision processes and explores the impact of organizations’ investment characteristics, external

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environment, and internal context on the shaping of those patterns. By identifying the lead actors of the initiation, development, and approval stages in IT governance, the patterns of 57 IT investment decisions at 6 hospitals are analyzed. The results reveal seven IT governance archetypes: (1) top management monarchy, (2) top management–IT duopoly, (3) IT monarchy, (4) administration monarchy, (5) administration– IT duopoly, (6) professional monarchy, and (7) professional– IT duopoly. Each archetype is analyzed by taking into account four specific factors: IT investment level, external influence, organizational centralization, and IT function power. This study makes several contributions to IT governance theory and practice. First, IT governance is reframed to include pre-decision stages, highlighting the importance of participants other than the final decision maker. Second, the variation of IT governance archetypes suggests that even when top management approval is required, the IT department may not play a key role in the IT investment decision process. Third, governance of the pre-decision initiation and development stages is found to be jointly affected by several contextual...