ISYS90038 Chap.7 Operating Model and ICT Governance Arrangements
Operating Model and ICT Governance Arrangements
Week 7 defines ICT governance, after Weill and Ross, as deciding who holds which decision rights and who is accountable, so that the use of ICT is steered towards desirable behaviour. It is a subset of corporate governance, it must answer what decisions are needed, who makes them and how they are monitored, and AS8015 gives six principles for it. The subject then introduces two of its three design tools.
The operating model places an organisation, or each of its functions, on two dimensions, business process standardisation and integration, giving four models: diversification, coordination, replication and unification. The model chosen shapes the architecture the organisation needs and the decisions that must be shared.
The governance arrangements matrix records, for five decision types from ICT principles to investment and prioritisation, who provides input and who decides, using six archetypes from business monarchy to anarchy. Weill and Ross's data shows a pattern: federal input almost everywhere, IT monarchy for architecture and infrastructure, and business monarchy, federal or duopoly arrangements for investment.
The worked case evaluates an escalation right that lets one executive bypass a federal committee, the kind of judgement question the practice exam sets.
What this chapter covers
- 01
ICT governance as decision rights and accountability, within corporate governance
- 02
Three questions governance must answer, and AS8015's six principles
- 03
The operating model: standardisation, integration and four quadrants
- 04
Several operating models in one organisation, and the model as a vision
- 05
Six archetypes: the two monarchies, the federal and feudal models, the IT duopoly and anarchy
- 06
Five decision types and the difference between input and decision
- 07
Top performers' patterns and how to evaluate an escalation right
Worked example · free
Place an organisation in the operating model and draw the implication
- 1Standardisation is high: one operations manual governs every outlet (P2, L5–7).
- 1Integration is low: franchisees keep separate customer and sales records (P3, L3), so the chain is in the replication quadrant.
- 1Implication: standard processes and the infrastructure behind them can be decided centrally, while customer data decisions stay with franchisees unless the chain chooses to integrate.
Key terms
- Decision rights
- The authority to make a particular type of ICT decision, recorded in the governance arrangements matrix.
- Business process standardisation
- How far a process runs the same way regardless of who performs it or where.
- Business process integration
- How far units are linked through shared data and systems.
- Replication model
- An operating model with standard, repeatable processes run by autonomous units with little shared data.
- IT duopoly
- A governance archetype in which IT executives decide together with one group of business leaders.
- Feudal model
- A governance archetype in which each business unit or process leader decides for their own unit.
- Escalation right
- A rule that sends certain high-risk decisions past the usual body directly to one senior role.
Operating Model and ICT Governance Arrangements FAQ
What are the four operating models?
Diversification has low standardisation and low integration; coordination has low standardisation and high integration; replication has high standardisation and low integration; unification has both high. One organisation may need a different model for each major function.
What is the difference between input and decision in the matrix?
Input records whose views are gathered before a decision; decision records who actually makes it. Weill and Ross's data shows broad federal input is common even where the decision itself sits with a monarchy or duopoly.
How do I classify a decision as federal?
Look for C-level executives deciding jointly with business representatives from all operating groups, with or without IT. Check the chair and the membership, and rule out an IT duopoly by noting whether IT is part of the deciding group.
How many governance archetypes are there?
Six: anarchy, feudal, IT duopoly, federal, and the business and IT monarchies. One module page and the Week 7 tutorial refer to five, but the matrix page, the summary and the Q&A all list six.
Exam move
Draw the operating model grid and the arrangements matrix from memory until both are automatic, with the six archetypes in order and the five decision types across the top. Then practise on the Week 7 to 9 tutorial case: place the organisation, citing one line per axis, and fill one row of the matrix with input and decision separately.
For judgement questions, rehearse a three-part paragraph: the benefit, the cost, and a stated position. Keep the top-performer pattern in mind as a benchmark, and present departures from it as needing a reason rather than as automatic failures.
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