IT Governance: Oil or Sand in the Wheels of Innovation?

Abstract

The purpose of this study is to understand how IT Governance (ITG) can foster or hinder the development and roll-out of radical or disruptive IT-enabled innovations. Propositions derived from the extant literature guide the analysis of seven embedded case studies of different innovation initiatives within a single large Dutch multinational bank with various contingency factors affecting ITG across the cases. Our findings confirm and extend earlier studies that emphasize the importance of proper business-IT communication and identify challenges caused by long gatekeeping processes and by the use of novel technologies in a traditional IT landscape. Radical or disruptive innovations also add new challenges, as they often cross business lines and therefore may be exposed to a heterogeneous set of ITG mechanisms. Our study further demonstrates that these innovations demand a different approach on an IT-functional level and a reconsideration of the risk capability structure to optimize efficiency.