Business processes in contemporary companies often heavily rely on the supporting information systems. Moreover, today, many innovations are to a considerable extent based on new IT capabilities. In order to warrant the continuous support of existing information systems as well as the development of new IT-based solutions, organizational units are required that provide the corresponding skills and resources. In the following, the term information systems function (shortly IS function) will be employed in order to refer to the entity of these organizational units within a firm. 27 The dispersion of IT competencies throughout the organization and the structuring of the IS function have been widely discussed in the information management literature. However, due to the rapid development of information technology, the role and structuring of IS functions has been subject to constant changes over the past decades.In this chapter, major developments concerning the structuring and organization of the IS function will be discussed and the existing body of IT governance research will be presented in brief. As IT project portfolio management is embedded into a wider organizational context, it is vital to consider IT governance from a broad perspective when investigating organizational requirements for IT project portfolio management.Section 2.1 contains a brief discussion of historical developments in corporate IS functions. Following, in section 2.2, the key terms centralization and decentralization are introduced in the context of the organizational integration of the IS function. The common perception that different fields of activities of the IS function require different decision-making arrangements has led to the notion of the term IT governance. The corresponding transition in literature towards contemporary IT governance conceptions is described in section 2.3. Findings from the IT governance literature are discussed in section 2.4. Finally, in section 2.5, the requirement for alignment between the IS function and different business units is discussed in order to provide the theoretical foundation for a later discussion of coordination mechanisms in the context of IT project portfolio management.
Historical developments in corporate IS functionsStudies on the structuring and the organizational integration of the IS function have a long history in information systems research. Historically, the role and the internal organization of 27 This is in accordance with the predominant use of the term in the relevant literature.