Aligning enterprise risk management with business strategy and information systems

Business leaders recognise effective risk management as one of the main success drivers for enterprises. Even though the Enterprise Risk Management (ERM) concept has evolved significantly in the past years, in the aftermath of recent economic crises it became evident some of its critical challenges still need to be addressed. The review of subject literature led to a conclusion that current ERM approaches failed to protect enterprise value in turbulent and risky market conditions. Therefore, this paper aims to provide a conceptual analysis of the most common ERM practices and frameworks, in order to identify their shortcomings and areas requiring development. It is further aimed to provide guidance to business practitioners in implementing more integrated and effective Enterprise Risk Management (ERM) solutions. This research recognises the importance of aligning ERM programmes with business strategies, and with consolidated Information Systems. A “New Approach ERM Model” is developed as guidance for a successful alignment of ERM with enterprise business strategy, and for an effective adaption of Information Systems to requirements of ERM programmes. The “New Approach ERM Model” steers risk management initiatives and strategies in the same direction, and consequently allows enterprises to improve organisational effectiveness, increase shareholders value, and gain competitive advantage in the market

The Role of Boards in Reviewing Information Technology Governance (ITG) as Part of Organizational Control Environment Assessments

IT Governance (ITG) is an important topic as US companies must now monitor ITG under the provisions of the Sarbanes-Oxley Act (2002) (Hoffmann, 2003). Trites (2003) indicates that directors are responsible for strategic planning, internal control structures and business risk. The control environment is defined in Australian Auditing Standard AUS 402 to mean "the overall attitude, awareness and actions of management regarding internal control and its importance to the entity". This paper contributes to the knowledge of ITG by forming an integrated ITG Literature (IIL) which links prior research to four key dimensions of ITG. The paper presents a review of literature on ITG performance measurement systems which assess the ability of organizations to achieve these four ITG dimensions. A revised ITG Dimensions Model offered for consideration. The final contribution of the paper is to propose critical issues Boards should consider as part of their assessment of organizational control environments

Using tactical and operational factors to assess strategic alignment: an SME study

The strategic use of Information Technology (IT), better known as strategic alignment, has significantly increased, as a result of the strong dependence of organisational activity on Information Systems (IS) and their related technologies. Strategic alignment is considered as a key element to improve performance on organisations, enhance efficiency and allow organisations to be more competitive in their respective industry. One of the first steps towards achieving strategic alignment is to have adequate means to measure it. Current assessment approaches, though, are mainly focused at the strategic level but provide little insight at tactical and operational levels, which are recognized as important areas for achieving strategic alignment. Furthermore, most of the existing approaches are tested in large organisations and there is little research on assessing the effectiveness of these approaches for Small and Medium Enterprises (SMEs). This paper proposes an alternative instrument that rather than focusing only at the strategic level it aims to have a better understanding by measuring alignment at tactical and operational levels. Finally this paper presents the findings of applying this instrument on an SME

An investigation of aligning project management to business strategy: A review and conceptual framework

Copyright (C) 2011/12 ISEing.This paper discusses in depth the factors that lead to misalignment between the project management and the business strategy by investigating four case studies in the telecomunications industry in Saudi Arabia. Project management has been an important issue for many years and for many companies worldwide. Many implementations of project management (PM) have been successful, while others have failed to deliver the outcome of the project. The literature indicates that misalignment between large projects and the business strategy leads to 30% of all projects failing. Indeed, the literature highlights few internal factors (e.g. effective communication, executive support, involving the project manager in the business strategy development, and the project manager leadership competence) that may tie the project management to the company's business strategy. However, this study indicates very important external factors that affect the implementation of the company's business strategy. A framework will be developed to provide a clear guide to the project management efforts towards a competitive business strategy

IT in construction: aligning IT and business strategies

The extent to which information technology (IT) infrastructures and strategies are aligned with business processes and strategies varies widely along firms. The objective of this paper is to explain the success or failure of IT in construction firms by focusing on the alignment (or lack of it) between business strategy, IT strategy, organizational infrastructure, and IT infrastructure. It is hypothesized that the ‘fit’ among these elements, the domains of the Strategic Alignment Model, is positively related to the Business Value of IT in Construction. The IT Business Value is evaluated in terms of efficiency, effectiveness and business performance. By applying the Strategic Alignment Model to the Dutch construction industry, it is shown that the inadequate alignment between these domains is a major reason for the modest added business value from IT investments in this industry. The first lack of alignment is the technology shortfall: hence IT contributes in an inadequate way to strategic processes of construction firms. The second lack of alignment is the strategy-shortfall: hence the firm strategy impedes the implementation of IT that could generate a high business value

A framework to review performance measurement systems.

This paper describes a structured review framework for managing business performance. The framework entails the review of both business performance, including thestrategic relevance of the measures, as well as the efficiency and effectiveness of the performance measurement system itself. A range of approaches and tools are employed in the framework which features a review card providing a high level view of the review process, showing the different types of review perspectives and their interactions

Operational excellence assessment framework for manufacturing companies

Operational Excellence (OE) is a consequence of an enterprise-wide practises based on correct principles that can be classified under four dimensions; Culture, Continuous Process Improvement, Enterprise Alignment and Results. To achieve OE, organisations have to attain a high maturity level and measurable success in the four dimensions as assessed externally by accredited institutions or consultants. External assessment is costly and can be inaccurate due to the lack of in depth knowledge of the organisation by external assessors, on the contrary, self-assessment of an organisations OE is cost effective and accurate if performed with a complete tool which assesses all four dimensions of OE. A complete OE self-assessment tool is currently unavailable, thus this study focuses on the development of a complete OE self-assessment tool. Using a matrix to critically evaluate and compare existing self-assessment tools in areas such as dimensions assessed, scoring criteria and usability, a complete self-assessment tool is then developed based on the combination of existing assessment tools. The tool is validated through the application, by managers, within a manufacturing company that already implements aspects of lean in order to self-assess its OE. The results of the assessment form the basis on which a roadmap to achieving OE is then developed