Controlling IS Function: Evaluating Value for Money

Controlling the IS Function

• Concerns of the IS function include determining the optimal expenditure, ensuring value for money, and evaluating the effectiveness of IS investments.

Assessing IS Expenditure

• Determining how much to spend on IS is challenging.
• Benchmarking against competitors can be done, but it is a reactive approach and may not reflect the organization's current IS state.

Evaluating Value for Money

• Post-audit can be performed to determine if benefits are worth the cost of the project.
• This helps to assess if the organization is getting value for money from its IS function.

Control of IS Activities

• Enforcement of policies and standards can establish control over IS activities.
• Audit helps to evaluate if policies and standards are being adhered to.
• Policies and standards can be applied to both IS personnel and users of IS services.

Organizing the IS Function

• Organizations have different ways to organize the IS function, either centralized or decentralized.

Centralized IS Function

• Allows for better top-management control
• Provides economies of scale on:
  • Hardware
  • Software
  • Personnel

Decentralized IS Function

• Improves an organization's capacity to exploit IT
• Reduces cost of inter-departmental communication

Common Requirements for Both Structures

• Clear job positions and a well-defined reporting and responsibility structure must be present

Inefficient Structures to Avoid

• Centralized departments divided along traditional department lines

Ensuring Effective Control

• Separation of duties must be integrated into various job functions to:
  • Detect errors and irregularities
  • Reduce expected losses from unlawful events

The Organizing Function

• The organizing function involves gathering, allocating, and structuring resources to achieve goals and objectives.
• It is essential for top management to perform the organizing function properly to ensure effective and efficient IT systems.

Resourcing

• Acquiring resources is a critical aspect of the organizing function, including hardware, software, personnel, finances, and facilities.
• Proper acquisition processes must be performed, including funding support, vendor selection, requirements creation, proposal evaluation, and contracts creation.

Staffing

• Management should acquire the most suitable staff to perform IT functions.
• Staff should be up to date and motivated to perform their role.
• The importance of staffing is heightened by the fact that human factors, not computer problems, often cause irregularities.
• Personnel acquisition should be controlled via:
  • Background checking of references, resumes, etc.
  • Screening applicants for mental and physical health.
  • Bonding of key employees.
  • Explanation of organizational protocols to be observed.
  • General organizational indoctrination.

Staff Development and Termination

• Staff should be given adequate development opportunities, such as training and promotion.
• Employees attending training sessions should disseminate the knowledge upon their return.
• Personnel termination should be followed up with control procedures to ensure all employee access to important systems is secured.
• If possible, the leaving employee should train others on their job prior to leaving.
• Exit interviews should be conducted to determine areas of discontent and identify potential problems.