The Role of IT Governance Practices in Creating Business Value in SMEs

Abstract

Much has been written about information technology governance (ITG) in larger organizations, wherein control of information technology (IT) is addressed with attention to three core elements, namely structures, processes, and relational mechanisms. These elements focus on governing the size of IT investment, the ubiquity of IT functionality to business processes and the demonstrated value from IT investment. For Small-to-Medium Enterprises (SMEs) it is less apparent how IT is or should be governed, how these core elements may contribute to ITG, and how this all contributes to the creation of business value. Through a survey of small SMEs in the Australian tourist accommodation industry regarding their use of and planning for IT investment to deliver business value, this paper delivers new understanding about SME practices related to governing IT. Findings revealed evidence of some sound practices but the opportunity to achieve greater strategic business value beyond the largely operational value already acquired. The paper concludes by proposing a redefined framework of the core elements of structures, processes, and relational mechanisms that is tailored to an SME context.