It Governance And Corporate Governance Finance Essay - Free Essay Example

Sample details Pages: 5 Words: 1476 Downloads: 1 Date added: 2017/06/26 Category Finance Essay Type Analytical essay Did you like this example? This assignment work specifically based on IT governance services at ING, The IT governance can be defined as services which provided by Governance rule, and its include Senior management for direct ,measure and evaluate the use of an enterprises the resources support achievement of un-organization structure and process. 5 Description of the company and the market it operates ING is a financial institution of Dutch origin offering banking, insurance and asset management services, the company was formed in 1991 after a merger between the NMB Postbank and the insurance company Nationale-Nederlanden, the merger created the ING Group. The term ING is abbreviated as Internationale Nederlanden Groep. The companys head quarters is located in Armstedam,Netherland, After the merger the company expanded its markets beyond netherland by making acquisitionson different parts of the world on the banking and insurance sectors. ING operations are divided into three sections the banking, asset management and the insurance section, whereas in banking the company offers services in commercial banking(for coporations and institutions),retail banking as well as investment banking.In insurance the company provides retirement and life insurance services and asset management for fund distributors, institutional clients. As of 2010 the company had a net income of $77 bil lion dollars, with more than 100,000 employees worldwide, According to the fortunemagazine the company serves 85 million clients worldwide both businesses and individuals. (165) Don’t waste time! Our writers will create an original "It Governance And Corporate Governance Finance Essay" essay for you Create order A description of the IT governance used First we must to understand what is the IT governance and how its work IT governance is the process and the relationship that leads to reasoned decision making. For direct measure and evaluate the use of an organisation process, to support the structure and process This Include, what decision need to made, who is accountable for making the decision, how with the decision be made. It governance used the type which it called dashboard process, this dashboard process is carried out at the same time as INGs annual medium -term business planning exercise for provide the information necessary to develop and compare the most appropriate metrics on IT spend, performance and value, help identify positive and negative trends, enable direct comparison with specifically commissioned for group information and direct comparison of metrics among different business units. Meanwhile for to assist senior business and IT management to exercise their governance responsibilities over IT invest ments With the rapid expansion of the company the case study shows ING decided to introduce governance on its IT investment management, by doing this the company viewed its IT as investment rather than operational costs, for better managing such investment an IT governance was devised, whereas the governance stipulated all the rules and conditions that are to be followed in regards to IT investments, the fundaments of the governance was around assigning responsibilities, better communication channels, empowerment and authority, in implementing this different boards and committees were formed with specific responsibilities e.g. IT policy Board. The it governance used was structured in a way that it only fulfils the goal of accomplishing the business values of the firm, As an investment the governance was used to guide management of IT investment as a normal investment, whereby different measurement techniques were used to calculate different variations in relation to the IT such a s investment return of IT, performance, value before investing, and risk analysis. 6 The governance also empowers designated individuals to conduct continuous monitoring and evaluations of IT investments in a bid to ensure that the benefits are inclining with the business strategy and that contingencies are in place in case of deviations, and the company is not far off from the competitors. (366) A summary of the case study Since its formation in the early 1990s ING as a company has been constantly evolving its business strategy and information technology strategy, at first the company treated these two components as separate entities, i.e. there was miss-alignment between these two components, but this was not productive and the company saw itself lagging behind by not achieving its business goals, despite the company being committed to making major investments in IT resources, the return on such investments was not so visible, and since IT was the life blood of the company something had to be done. The gradual expansion of ING as a company made the company look far beyond its home base (Netherlands), and acknowledge that in order to evolve as an international company there has to be IT governance within the company strategy that is fully dedicated to provide guidelines to the management of IT infrastructure of the company. ING resolve this challenge by introducing IT Dashboard as a comprehensive framework to help organization align its strategic business objectives to its IT Investment. According to the case study Dashboard played an integral role in the rollout of ING bank strategies for global expansion. to the more success that can be demonstrate from its own IT dashboard analysis and the knowledge and the tools that have been developed, the ING is considering the potential benefit to the organisation in providing similar IT value and performance services to other organisation as an commercial service. (248) Critical Analysis By incorporating IT governance into the corporate strategy the company was able to conjoin the business strategy and the information technology strategy, since these two strategies tend to complement each other it was the right decision, because there now was a guide book on how to manage both strategies and definition of responsibilities, authority and empowerment within the company in the process making sure the IT processes are solely there to support the achievement of the companys business goals, this eliminated the probability of bad IT investments, with the increase in accountability and better communication exchange within the company. IT governance has made an impact on the board level by ensuring that the top management is constantly informed and IT investment is transparent to management, however in the case study, ING confessed the financial transparency of many IT investments is not as clearly defined as it should be therefore, ING is not always clear on the returns expected from the investment being made. 7 IT governance has made an impact on the board level by ensuring that the top management is constantly informed, about IT related issues and the governance structure is devised in a way to make sure that leaders are fully committed. Also the implementation of IT governance has encourage specialisation and division of labour within ING whereby different specific-tasked committees have been created with responsibility to deal with different aspects of IT governance, for example committees were formed for making policies, Information security, standards and IT investments. This enabled the company to make good and quick decision as a result of good communication channels and credible information. This has increased efficiency and employee productivity. By having a formal process of governing its IT operation the company has been able to control its IT expenditure on current IT infrastructure as well as new developments, this has becom e possible because of the creation of IT related committees at board level which discuss about the policies, standards that must be adhered to when it comes to IT investments, therefore it has minimised the misallocation of funds on IT projects that are not sustainable or too risky. IT governance increased transparency within the company, especially after adopting the IT Dashboard which was used as a communication channel for the companys board in making sensible decisions relating to IT investments. By having a formal structure of governance and communication exchange between business side and the information technology side within ING, it has led to clear definition of responsibilities and activities to be known by each employee, as a result it has led to strong cooperation between employees which in turn has had a positive morale on the employees of the company, since everyone knows his/her responsibility and what he/she is accountable for The IT governance has helped th e company to have formal guidelines that aid the company in IT investments, so as to protect the company from unforeseen risks that come with investments, by applying IT governance there was a formal method of assessing stages, people involved, and formalities to follow that an IT investment portfolio has to go through before it is sanctioned, by applying different IT metrics which were used to measure the risks, budgets, value, return on investments and the overall costs, Therefore the decision making process was more thorough compared to before and increased the success ratio on all IT investments within the company. Also the introduction of IT governance simplified decision making process when it comes to IT investments whereby decisions were done in a responsible and careful manner through liaising between the IT managers and business managers and the Board, by knowing whos responsible and accountable it eliminated the bureaucracy within the company and that business critical decisions relating to IT were made much quicker. (627) 8