Public and Private Sector IT Governance: Identifying Contextual Differences

Abstract

This paper highlights systemic contextual differences and the unique IT Governance issues that might arise in public and private sector organizations. Public sector organizations constitute a significant component of economic activity in most countries. Like their private sector counterparts, many public sector agencies are struggling to cope with reduced or inadequate IT budgets and are continuously looking for ways to extract maximum value from IT resources. While both sectors face similar managerial-level IT issues and challenges, we argue that there are systemic differences between private and public sector organizations suggesting that a one size fits all approach to IT Governance may not apply.

Exploring IT-Enabled Public Sector Innovation in U.S. States

“…Structural considerations are heavily governance based [24] and are made more complex in the public sector where IT spending accountability relationship spread more broadly than the private sector [12]. In general, IT governance is believed to be more effective when the legislative branch is involved in controlling and monitoring IT [25].…”

“…Research has consistently shown a strong link between IT governance and positive outcomes and firms with effective governance can expect to receive up to a 40% greater return on investment in IS and this is commonly attributed to achieving better IS-business alignment [3][4][5]. IT governance is not concerned with the location of the IT resources themselves but rather the "location distribution and pattern of managerial responsibilities and control that ultimately affect how IT resources are applied and then implemented" [6, p. 1].…”

“…Another critical way in which public sector and private sectors differ is the nature of governance and oversight [12]. The public sector does not have a Board of Directors and elected officials are usually chosen due to their position on issues and seldom agree on an overriding goal akin to profit maximization.…”

Information Technology Governance Framework in the Public Sector Organizations

“…Although the public sector and the private sector have differences both of them require effective IT governance as IT investments now play an important role for the economic and social life of the community [7]. Public sector organizations recognize the importance of effective IT governance for their success.…”

“…IT governance can be included as a combination of processes, structures and relational mechanisms in both the public and private sectors [7]. It is important to recognize that processes, structures and relational mechanisms can be applied to serve specific or multiple goals in complex alignment challenges [9].…”