Open Access

IT Governance (ITG) is crucial due to its significant impact on enabling innovation and enhancing firm performance. Hence, in the last decade ITG has become important in both academic and in practical research. Although several studies have investigated individual aspects of ITG success and its impact on single determinants, the causal relationship of how ITG promotes firm performance remains unclear. Thus, a more comprehensive understanding about the link between ITG and firm performance is needed. To address this gap, this research aims at understanding how ITG and firm performance are related. Therefore, we conducted a systematic literature review (1) to create an overview on how current research structures the link between ITG mechanisms and firm performance, (2) to uncover key constructs as potential mediators or moderators on the general link between ITG and performance, and (3) to set the basis for future studies on the ITG-firm performance relationship.

Digital transformation has changed corporate reality and, with that, firms’ IT environments and IT governance (ITG). As such, the perspective of ITG has shifted from the design of a relatively stable, closed and controllable System of a self-sufficient Enterprise to a relatively fluid, open, agile and transformational system of networked co-adaptive entities. Related to this paradigm shift in ITG, this paper aims to clarify how the concept of an effective ITG framework has changed in terms of the demand for agility in organizations. Thus, this study conducted 33 qualitative interviews with executives and senior managers from the banking industry in Germany, Switzerland and Austria. Analysis of the interviews focused on the formation of categories and the assignment of individual text parts (codings) to these categories to allow for a quantitative evaluation of the codings per category. Regarding traditional and agile ITG dimensions, 22 traditional and 25 agile dimensions in terms of structures, processes and relational mechanisms were identified. Moreover, agile strategies within the agile ITG construct and ten ITG patterns were identified from the interview data. The data show relevant perspectives on the implementation of traditional and new ITG dimensions and highlight ambidextrous aspects in ITG in the German-speaking banking industry.

With significant advancements in digital technologies, firms find themselves competing in an increasingly dynamic business environment. Therefore, the logic of business decisions is based on the agility to respond to emerging trends in a proactive way. By contrast, traditional IT governance (ITG) frameworks rely on hierarchy and standardized mechanisms to ensure better business/IT alignment. This conflict leads to a call for an ambidextrous governance, in which firms alternate between stability and agility in their ITG mechanisms. Accordingly, this research aims to explore how agility might be integrated in ITG. A quantitative research strategy is implemented to explore the impact of agility on the causal relationship among ITG, business/IT alignment, and firm performance. The results show that the integration of agile ITG mechanisms contributes significantly to the explanation of business/IT alignment. As such, firms need to develop a dual governance model powered by traditional and agile ITG mechanisms.

Digital transformation has changed corporate reality and, with that, corporates’ IT environments and IT governance (ITG). As such, the perspective of ITG has shifted from the design of a relatively stable, closed and controllable system of a self-sufficient enterprise to a relatively fluid, open, agile and transformational system of networked co-adaptive entities. Related to the paradigm shift in ITG, this thesis aims to conceptualize a framework to integrate the concept of agility into the traditional ITG framework and to test the effects of such an extended ITG framework on corporate performance. To do so, the thesis uses literature research and a mixed method design by blending both qualitative and quantitative research methods. Given the poorly understood situation of the agile mechanisms within the ITG framework, the building process of this thesis’ research model requires an adaptive and flexible approach which involves four different research phases. The initial a priori research model based on a comprehensive review of the extant literature is critically examined and refined at the end of each research phase, which later forms the basis of a subsequent research phase. As a result, the final research model provides guidance on how the conceptualized framework leads to better business/IT alignment as well as how business/IT alignment can mediate the effectiveness of such an extended ITG framework on corporate performance. The first research phase explores the current state of literature with a focus on the ITG-corporate performance association. This analysis identifies five perspectives with respect to the relationship between ITG and corporate performance. The main variables lead to the perspectives of business/IT alignment, IT leadership, IT capability and process performance, resource relatedness and culture. Furthermore, the analysis presents core aspects explored within the identified perspectives that could act as potential mediators or moderators in the relationship between ITG and corporate performance. The second research phase investigates the agile aspect of an effective ITG framework in the dynamic contemporary world through a qualitative study. Gleaned from 46 semi-structured interviews across various industries with governance experts, the study identifies 25 agile ITG mechanisms and 22 traditional ITG mechanisms that corporations use to master digital transformation projects. Moreover, the research offers two key patterns indicating to a call for ambidextrous ITG, with corporations alternating between stability and agility in their ITG mechanisms. In research phase three, a scale development process is conducted in order to develop the agile items explored in research phase two. Through 56 qualitative interviews with professionals the evaluation uncovers 46 agile governance mechanisms. Moreover, these dimensions are rated by 29 experts to identify the most effective ones. This leads to the identification of six structure elements, eight processes, and eight relational mechanisms. Finally, in research phase four a quantitative research approach through a survey of 400 respondents is established to test and predict the formulated relationships by using the partial least squares structural equation modelling (PLS-SEM) method. The results provide evidence for a strong causal relationship among an expanded ITG concept, business/IT alignment, and corporate performance. These findings reveal that the agile ITG mechanisms within an effective ITG framework seem critical in today’s digital age. This research is unique in exploring the combination of traditional and agile ITG mechanisms. It contributes to the theoretical base by integrating and extending the literature on ITG, business/IT alignment, ambidexterity and agility, all of which have long been recognized as critical for achieving organizational goals. In summary, this work presents an original analysis of an effective ITG framework for digital transformation by including the agile aspect within the ITG construct. It highlights that is not enough to apply only traditional mechanisms to achieve effective business/IT alignment in today’s digital age; agile ITG mechanisms are also needed. Therefore, a novel ITG framework following an ambidextrous approach is provided consisting of traditional ITG mechanisms as well as newly developed agile ITG practices. This thesis also demonstrates that agile ITG mechanisms can be measured independently of traditional ITG mechanisms within one causal model. This is an important theoretical outcome that allows the current state of ITG to be assessed in two distinct dimensions, offering various pathways for further research on the different antecedents and effects of traditional and agile ITG mechanisms. Furthermore, this thesis makes practical contributions by highlighting the need to develop a basic governance framework powered by traditional ITG mechanisms and simultaneously increase agility in ITG mechanisms. The results imply that corporations might be even more successful if they include both traditional and agile mechanisms in their ITG framework. In this way, the uncovered agile ITG practices may provide a template for CIOs to derive their own mechanisms in following an ambidextrous approach that is suitable for their corporation.