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According to HP website (2009), Hewlett Packed (HP) is a technology company that operates in more than 170 countries around the world. HP was founded in 1939. It is one of the biggest companies in this industry. Moreover, HP is a Fortune 11 company, with $91.7 billion in revenue, generating $7 billion in organic growth for fiscal year 2006. It provides infrastructure and business offerings that span from handheld devices to some of the world's most powerful supercomputer installations. Also, it offers clients a wide range of products and services from digital photography to digital entertainment and from computing to home printing.
According to IBM website (2009) a merger of three 19th-century companies-the Tabulating Machine Company, the International Time Recording Company and the Computing Scale Company of America-creates the Computing-Tabulating-Recording Company (CTR) on June16, 1911. CTR is the precursor to IBM. Thomas J. Watson Sr. joins CTR in 1914 and over the next two decades transforms it into a growing leader of innovation and technology and a prototype for the newly emergent multinational corporation. This shift is signaled in 1924, when the company's name changes to International Business Machines Corporation (IBM). In addition, it is considered as one of the biggest companies in the IT industry. It offers IT products and services to its clients. These products contain software, server, system store, personal computers and so on. Its IT services contain business consulting, training and so on. It is such a huge company with 398,455 numbers of employees and $103.6 billion as revenue of the company for 2008 year.
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Over the years, the information technology (IT) has become an important element that plays significant roles in most of the organisations. Generally, it has become impossible for most of the functions within these organisations to work effectively without using it. So, IT is no longer separate from enterprise but is an essential element of it.
In addition, the complexity of today's business environment requires quick responses to the market, dealing with many external organisations and so forth. All these issues with this complex environment have to be managed and governed. As mentioned before, IT as a part of the enterprise has to be managed and governed as well. These days, many of the organisations are trying to generate competitive advantages of their use of IT. This usage is intended to create a business value rather than any thing. Base on that, this usage of IT has to be aligned with business objectives. This can lead to the definition of IT governance. There are many definitions given to the IT governance. For example, according to IT Governance Institute IT governance is "the responsibility of the board of directors and executive management. It is an integral part of enterprise governance and consists of the leadership and organisational structures and processes that ensure that the organisation's IT sustains and extends the organisation's strategies and objectives" (cited in Grembergen & Haes, 2008). This paper conducts a research on IT governance in two big IT companies which are Hewlett Packed and IBM by comparing the action and the performance of IT governance in the two companies.
Information Technology or IT: The communication or reception of knowledge through the use of electronic means.
IT Governance: The manner with which knowledge obtained from investigation, study, or instruction is managed.
Enterprise: The business organizations discussed in this paper, including their key objectives, types of products, and nature of business.
Organization: The administrative structure of the enterprises discussed herein.
Strategies and Objectives: The manner of command aimed at meeting tight competitions under conditions advantageous to one's own enterprise.
Complexity: The state in which the enterprises are made up of or involving a variety of elements.
This paper is limited to comparing only the IT governance action and performance in Hewlett Packed and IBM, with regards to the IT governance domains in a generic IT industry performance and comparisons of these domains also helped us to address the research questions. The five domains are specified as strategic alignment, value delivery risk management, and resource management and performance measurement. This paper tries to explain these factors in both the companies and explains the research questions that are mentioned below.
This paper will answer these three questions:
1- What are the accountabilities of IT governance?
2- How the IT governance help to achieve effective changes in strategic plans to implement?
After deciding on the research topic, there were many attempts to collect relevant information. Searching in the library of Wollongong databases such as proquest central, IEEE, Emerald and ACM digital library was the primary way to collect the information. This search was done by using some key terms which are "IT governance", IT governance in HP" and "IT governance in IBM", IT governance models. Then we had moved to next level to search for videos in YouTube given by few HP and IBM executives, here we got an idea of what exactly IT governance in these companies means they explained about the ITSM and COBIT. After which we had decided to search some case studies in HP and IBM websites and retrieved some papers regarding IT strategy and frameworks, from IBM we retrieved some statically data and IBM Redbook. First we analysed different frame works and their involvement by separating work according to companies and identifying answers to the research paper through which the structures are understood.
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Recently, IT plays a significant role in the business environment to support all aspects of the enterprise. This essential function of IT has led to make the IT governance an important term to all companies to care about it. According to Bernroider (2008) "The critical role of IT in enterprises has led to the view that IT governance must be managed to support or enable business objectives and mitigate risks associated with IT implementation". This view is supported by IT Governance Institute (2003)" With IT now so intrinsic and pervasive within enterprises, governance needs to pay special attention to IT". These opinions confirm the important of IT governance to the enterprise. In addition, there are many definitions for IT governance, for example, according to Sharma, Stone and Ekinci (2009) IT governance is "the process and structure that ensure that organization's deploy their IT investments appropriately to ensure that the resulting activities -whether programmers, projects or operations that they fund - are carried out properly and achieve the desired results". Moreover, according to IT Governance Institute (2003) IT governance is "the responsibility of the board of directors and executive management. It is an integral part of enterprise governance and consists of the leadership and Organizational structures and processes that ensure that the organization's IT sustains and extends the organization's strategies and objectives". This view has been backed up with in HP by saying that IT is no longer a separate essential element in the enterprise (Sallé, 2004). In IBM they have published by saying governance in IT will provide clear and transparent decision making and management services (Mueller et al. 2008). Therefore, from these two definitions IT governance is all about ensuring the implementing of IT is in the right way to get the wanted results and to meet the goals and objectives of the business.