AR26607 Governance TI
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International Journal on IT/Business Alignment and Governance, 1(1), 1-13, January-March 2010 1
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Keywords: Business/IT Alignment, Enterprise Governance of IT, IT Governance, Value Creation
InTroduCTIon
When you are reading this article, you are
looking at the very first article of the inaugural
issue of the International Journal on IT/Busi-
ness Alignment and Governance (IJITBAG).
We are very pleased with your interest in this
journal and the topics that will be addressed in
this and all the forthcoming issues. With this
introductory article, we as editors-in-chief do
want to share with you our main insights in
this challenging research domain, based on our
collaborative research and practical experience
in the field the previous years.
This research and experience goes back
many years, and to strengthen our research
efforts, we have founded in 2003 the Informa-tion Technology Alignment and Governance
a resec Jey it
Eteise Gvece f
IT, Bsiess/IT aigmet
Ve CetiWim Van Grembergen, University of Antwerp Management School, University of Antwerp,
Belgium
Steven De Haes, University of Antwerp Management School, University of Antwerp, Belgium
aBSTraCT
Enterprise governance of IT is a relatively new concept in literature, and is gaining more interest in theacademic and practitioners world. Enterprise governance of IT addresses the denition and implementa -
tion of processes, structures and relational mechanism that enable both business and IT people to executetheir responsibilities in support of business/IT alignment and the creation of value from IT-enabled businessinvestments. This article introduces important theories and practices around Enterprise governance of ITbased on joint research and practical experience of the authors (and editors-in-chief of this journal) withinthe Information Technology Alignment and Governance (ITAG) Research Institute (University of AntwerpManagement School). The article is based on the authors 8-year journey into Enterprise Governance of ITand aims to outline the core themes of interest of this new International Journal on IT/Business Alignmentand Governance. In this way, this introductory article paves the way for many more research initiatives withinthis challenging research domain.
DOI: 10.4018/jitbag.2010120401
Grembergen, W. y De Haes, S. (enero,2010). A research journey into enterprise governance of IT,
business/IT alignment and value creation . International Journal on IT/Business Alignment and
Governance, 1 (1) pp. 1-13. (AR26607)
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Research Institute (ITAG) within the University
of Antwerp Management School (www.uams.
be/itag). The concept of IT governance was
emerging at that time in both academic and
practice-oriented literature and definitionsand models were developed and promoted. To
prevent the IT governance discussion to stay
within the IT area, our minds evolved over the
years towards the broaderbusiness oriented
concept of enterprise governance of IT. We
investigated how contemporary organizations
are implementing these concepts in practices,
analyzed the impact of these implementa-
tions on the complex construct of business/
IT alignment and explored the relationshipstowards achieving more business value out of
IT investments.
In this article, we introduce some of our
conclusions and insights resulting from these
main research streams. We welcome all feed-
back on [email protected] and wim.
[email protected] and do want to
invite you to submit your research articles for
consideration in the International Journal on
IT/Business Alignment and Governance in the
future (www.igi-global.com/ijitbag).
InTroduCInG ThE ConCEpToF GoVErnanCE oF IT
IT governance is one of these concepts that
suddenly emerged and became an important
issue in the information technology (IT) area. It
is not clear when exactly the concept originated
as we understand it now. Gartner introduced
the idea of Improving IT governance for the
first time in their Top-ten CIO Management
Priorities for 2003 (ranked third). In 1998, the
IT Governance Institute was founded to disperse
the IT governance concept. In academic and
professional literature, articles mentioning IT
governance in the title began to emerge late
1990s. In the context of the leading academic
conference Hawaii International Conference
on Systems Sciences (HICSS) IT governance
was defined as organizational capacity exer-cised by the board, executive management
and IT management to control the formulation
and implementation of IT strategy and in this
way ensure the fusion of business and IT (Van
Grembergen, 2002).
After the emergence of the IT governanceconcepts, the notion received a lot of attention.
However, due the focus on IT in the naming
of the concept, the IT governance discussion
mainly stayed a discussion within the IT area.
We have experienced this in our research many
times, where we tried to contact the CEO for
an interview on IT governance issues and im-
mediately got transferred to the CIO. In the
field, many IT governance implementations are
driven by IT, while one would expect that thebusiness would and should take a leading role
here as well. It is clear that business value from
IT investments can not be realized by IT, but
will always be created at the business side. For
example, there will be no business value created
when IT delivers a new CRM application on
time, on budget and within functionalities, and
when afterwards the business is not integrating
the new IT system into its business operations.
Business value will only be created when new
and adequate business processes are designed
and executed enabling the sales people of the
organization to increase turnover and profit.
(Van Grembergen & De Haes, 2009; Thorp,
2003).
This discussion raised the issue that the
involvement of business is crucial and initiated
a shift in the definition, focusing on the business
involvement, towards enterprise governance
of IT. As defined in our most recent textbook
(Van Grembergen & De Haes, 2009), enterprisegovernance of IT is an integral part of corporate
governance and addresses the definition and
implementation of processes, structures and
relational mechanisms in the organization that
enable both business and IT people to execute
their responsibilities in support of business/IT
alignment and the creation of business value
from IT enabled investments (see Figure 1).
Enterprise governance of IT clearly goes
beyond the IT related responsibilities and ex-
pands towards (IT related) business processes
needed for business value creation. Also the
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standardization organization ISO moved into
this direction, with the release in 2008 a new
worldwide standard defined as Corporate
Governance of IT (ISO/IEC 38500, 2008). In
this standard, ISO puts forward six principles
for governance of IT, addressing both business
and ITs roles and responsibilities, that express
preferred behavior to guide IT related decision
making. In the same line of thinking, the IT
Governance Institute (ITGI) complemented
its IT governance best practices framework
COBIT (ITGI, 2007), focusing on IT processes
and responsibilities, with the Val IT framework
(ITGI, 2008), addressing the business processes
and responsibilities in value creation. We have
been involved in the development of these
frameworks for many years and have experi-enced this broadening view towards enterprise
governance of IT as very enriching evolution
within the ITGI frameworks.
This change in naming and focus might
appear subtle and not groundbreaking, but it
implies a crucial shift in the minds of business
people. The leading role of IT people in IT gov-
ernance has always been a paradox. The same
thing happened in the era of business process
reengineering, where also in many cases IT took
a leading role reinventing business processes.
It is however clear that business processes and
business value creation can and should only be in
the ownership of business people. On the other
hand, we have to acknowledge that in practice,
this mind shift will not happen by itself or by
changing the name of the concepts. We belief
that IT management is in a unique position to
act as a change agent in the organization and to
realize the business buy-in over time.
Using similar argumentations as for en-terprise governance of IT, a rationale could be
built up to promote governance requirements for
other key assets in the organization. Typical ex-
amples could be human resources governance
and financial governance. In this context,
Weill and Ross (2004) identify six key assets
through which an organization can accomplish
its strategies and generate business value: hu-
man assets, financial assets, physical assets, IP
assets, information and IT assets, relationship
assets (see Figure 2). Using their words: Senior
executive teams create mechanisms to govern
the management and use of each of these assets
both independently and together. Governance
of the key assets occurs via a large number
of organizational mechanisms, for example
structures, processes, procedures and audits.
(Weill & Ross, 2004)Finally, it is important to note that there is
a clear distinction between IT governance or
enterprise governance of IT and IT management.
IT management is focused on the effective and
efficient internal supply of IT services and prod-
ucts and the management of present IT opera-
tions. IT governance/enterprise governance of
IT in turn is much broader, and concentrates on
performing and transforming IT to meet present
and future demands of the business (internal
focus) and business customers (external focus)
(Peterson, 2003). This higher-level focus of
IT governance/enterprise governance of IT is
confirmed in the IT governance definition of
ITGI (2003), which states that IT governance
is the responsibility of executives and the board
of directors. Pragmatically, one could say that
IT management is the prime responsibility of
the IT Director while the Chief Information
Officer (CIO) in co-operation with the busi-
ness is focused on IT governance/enterprisegovernance of IT.
Figure 1. Enterprise governance of IT, business/IT alignment and business value (Van Grem-
bergen & De Haes, 2009)
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EnTErprISE GoVErnanCEoF IT In praCTICE
Having developed a high-level model for en-
terprise governance of IT does not imply that
governance is actually working in the organiza-
tion. Conceiving the enterprise governance of
IT model is the first step, implementing it into
a sustainable solution is the next challenging
step. Our research (Van Grembergen & De Haes,
2008; De Haes & Van Grembergen, 2009a)
showed that organizations can and are deploying
enterprise governance of IT by using a holistic
mixture of various structures, processes and
relational mechanisms. Enterprise governance
of IT structures include organizational units
and roles responsible for making IT decisions
and for enabling contacts between business
and IT management decision-making functions
(e.g. IT steering committee). This can be seen
as a kind of blueprint of how the governanceframework will be structurally organized.
Enterprise governance of IT processes refers
to the formalization and institutionalization of
strategic IT decision making and IT monitor-
ing procedures, to ensure that daily behaviors
are consistent with policies and provide input
back to decisions (e.g. IT balanced scorecard).
The relational mechanisms finally are about
the active participation of, and collaborative
relationship among, corporate executives, IT
management, and business management and
include announcements, advocates, channels
and education efforts. Some examples of these
structures, processes and relational mechanisms
are provided in Figure 3.
In the many case organizations we visited
(Van Grembergen & De Haes, 2008; De Haes
& Van Grembergen, 2009a), we saw that most
organizations are indeed leveraging a mix
of structures, processes and mechanisms. Of
course, it should be noted that a silver bulletapproach does not exist in this matter. Each
organization has to select its own set of enter-
prise governance of IT practices, suitable for
their sector, size, culture etc. Our case research
clearly showed that organizations tend to find
it much easier to implement structures in their
organizations as opposed to processes (De Haes
& Van Grembergen, 2008; Van Grembergen &
De Haes, 2009). However, we have also seen
that much of these structures can not be effective
without supporting processes. For example, anIT steering committee can not make appropriate
investment decisions without an appropriate and
mature portfolio management process, includ-
ing the development of solid business cases. It
also appeared that relational mechanisms, such
as training, awareness building, etc., receive a
lot of attention in the beginning stages of an
enterprise governance of IT implementation
project and become less important when the
governance framework gets embedded intoday-to-day operations. This is not surprising as
Figure 2. Key asset governance (Adapted from: Weill & Ross, 2004)
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the introduction of an approach towards enter-prise governance of IT should be regarded in
the first place as a large change program within
the organizations. Another interesting finding
to pinpoint is that our enterprise governance of
IT definition implies a prime responsibility of
the board of directors (as part of their corpo-
rate governance responsibility), while specific
mechanisms to achieve this such as IT expertise
at level of board of directors are less existent
in organizations. This can possibly be explained
by the fact that making the board of directors
more IT literate is not easy to achieve, or that
the board is still not fully aware of the strategic
importance of IT. More recently, the idea of IT
leadership emerged in many discussion fora.
IT leadership can be defined as the ability of the
CIO or similar role to articulate a vision for ITs
role to the company and ensure that this vision
is clearly understood by managers throughout
the organization. If the CIO is not able to talk
in business oriented terms at executive level,his impact at that level will be small. This
mechanism is highly dependent on the indi-vidual competencies of the CIO and not many
methods are available to manage it. However,
we have seen that good leadership can be a very
powerful catalyst to bring enterprise governance
of IT in an organization to a next level. A good
balance between leadership and the appropriate
governance structures and processes needs to
be found (Van Grembergen & De Haes, 2009;
De Haes & Van Grembergen, 2009b).
To better understand how organizations
are implementing enterprise governance of IT,
we have supplemented our case research with
delphi research, leveraging an expert panel
of academics, business and IT managers and
consultants, to try to inventorize and evaluate
structures, processes and relational mechanisms
that contemporary organizations are using in
implementing enterprise governance of IT (De
Haes and Van Grembergen, 2008). This exercise
resulted in a list of 33 enterprise governance
of IT practices, and their respective evalua-tions in terms of perceived effectiveness and
Figure 3. Structures, processes and relational mechanisms for IT governance
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perceived ease-of-implementation. Based on
this, also a minimum baseline was constructed,
as a list of practices that organization at least
should have. After several review rounds, the
expert panel categorized these 10 practices askey instruments for enterprise governance of
IT (Figure 4).
This minimum baseline contains a mixture
of more strategic oriented (e.g. IT strategy
committee at level of board of directors) and
management oriented (e.g. IT project steering
committee) practices. It is also clear that prac-
tices such as IT steering committee, portfolio
management, project governance/management
constitute the core framework to describe howinvestments in organizations emerge, are pri-
oritized and realized. In that sense, most of the
practices above clearly contain both business
and IT oriented roles and responsibilities.
Eteise Gvece f IT Bsiess/IT aigmet
In our definition of enterprise governance of IT,
we state that it should be an enabler for busi-
ness/IT alignment. But what does alignmentbetween the business and IT exactly mean?
Henderson and Venkatraman were the first to
clearly describe the interrelationship between
business and IT in their well-known Strategic
Alignment Model or SAM model. According
to their model, Business/IT alignment is the
fit and integration among business strategy, IT
strategy, business structures and IT structures
(Henderson & Venkatraman, 1993). Business/
IT alignment clearly is a complex construct,
even more because there is not a universal way
to measure business/IT alignment in an organi-zation. Many measurement models have been
developed, each having their own assumptions
and approaches (Van Grembergen & De Haes,
2009; Chan & Reich, 2007).
A well known business/IT alignment ma-
turity model has been developed by Luftman,
which analyses business/IT alignment around
six attributes: communication, competency and
value measurement, governance, partnership,
scope and architecture and skills. (Luftman,2000) In parallel with other researchers, we
have been using this model within our ITAG
Research Institute, concluding for example
that the Belgian financial sector is positioned
at a maturity of 2.69 on a scale of 5, that many
other sectors worldwide are hovering between
average maturity levels of 2 and 3, and that
the financial services sector globally spoken is
only performing at an average level compared
to other sectors. (Van Grembergen & De Haes,
2009; Luftman & Kempaiah, 2007).
To provide practitioners with hands-on
guidance in the business/IT alignment domain, a
research project by the UAMS - ITAG Research
Institute and the IT Governance Institute worked
on developing pragmatic insights into how con-
crete business goals can drive IT goals and vice
versa, as visualized in Figure 5. If maintaining
Figure 4. Minimum baseline practices for enterprise governance of IT (De Haes & Van Grem-
bergen, 2008)
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the enterprise reputation and leadership is an
important business goal, a supporting IT goal
could be ensuring IT services can resist and
recover from attacks (Van Grembergen, De
Haes, & Van Brempt, 2008).
This delphi method based research was
executed across multiple industries and led
to the identification of a generic list of IT
related business goals and IT goals and how
they (could) relate (see Figure 6). In practice,every enterprise will have their own distinct
sets of business and IT goals. Priorities within
these sets will differ depending on a variety of
internal and external factors, such as company
size, industry, and geography.
The results of this research provide practi-
cal guidance for professionals in the attempt
to build up a cascade of business goals and
IT goals for their specific organization and
in this way obtain a better insight in the busi-ness/IT alignment issue. Enterprises can do
that efficiently by starting from these generic
business and IT goals, selecting what applies
to them and updating it for enterprise specific
situations. We have been using this approach in
our practice in a number of organizations and
experienced often that some of their business
goals were not supported by IT goals and that
some IT goals did not refer to business goals
indicating a low business/IT alignment. In
some cases, very operational (technical) were
defined, suggesting that they were still in an
IT factory mode.
Such practical business/IT alignment
analysis is a good starting point towards imple-
menting enterprise governance of IT, assuming
that enterprise governance of IT is an important
enabler for business/IT alignment. Our recent
research underpins this assumption, coming to
the conclusion that organizations with a mature
mix of enterprise governance of IT structures,processes and relational mechanisms very
likely achieve a higher degree of business/IT
alignment maturity compared to other similar
organizations (De Haes & Van Grembergen,
2009b). In this research, we measured busi-
ness/IT alignment in 10 Belgian financial sec-
tor organizations, using Luftmans alignment
maturity model (see above). In an extreme
case research approach, we extracted the two
best and two worst performers of this sampleand tried to explain the difference in alignment
maturity by looking at the maturity level of their
enterprise governance of IT practices (cf. list of
33 practices, see above). It was demonstrated
that all the organizations, both with high and
low business/alignment maturity, did have a lot
of practices in place, but the average maturity
of these practices was below maturity level 2
in the poorly aligned organizations and clearly
higher in the highly aligned organizations. In
their governance efforts, organizations shouldstrive for getting structures, processes and
Figure 5. Business goals driving IT goals (Van Grembergen Wim, De Haes Steven, & van Brempt,
2008)
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Figure 6. Linking IT goals to business goals (Van Grembergen Wim, De Haes Steven, & van
Brempt, 2008)
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relational mechanism at least at maturity level
2 which implies that these practices have de-
veloped to the stage where similar procedures
are followed by different people undertaking
the same task.
Eteise Gvece fIT Bsiess Ve
Our most recent research goes beyond business/
IT alignment and tries to explore the associa-
tion between enterprise governance of IT and
business value from IT-enabled investments.
After all, the end goals of investing in enterprise
governance of IT practice is achieving more
value out of IT enabled investments. Previous
research streams have worked on this issue
through the concept of business/IT alignment.
Studies by Chan et al. (2001) and Sabherwal
and Chan (1997), for example, confirm the
hypothesis that alignment between business and
IT strategies improves business performance.
Building on these research results, it can be
concluded that the whole cascade as presented in
Figure 1 is supported with empirical evidence,
demonstrating that enterprise governance of ITenables business/IT alignment (see previous
section of this article), which in turn enables
business performance.
A more specific approach was adopted
in our latest research, which focuses on the
relationships between the implementation of
enterprise governance of IT frameworks COBIT
4.1 and Val IT 2.0 and the achievement of IT and
business goals. COBIT 4.1 and Val IT 2.0 are
two best practice process models developed by
the IT Governance Institute (ITGI, 2007; ITGI,
2008), which are receiving more and more at-
tention in the field as frameworks to implement
enterprise governance of IT. COBIT defines 34
IT processes, categorized into four domains:
planning and organization (PO), acquisition and
implementation (AI), delivery and support (DS),
monitoring and evaluation (ME) (ITGI, 2007).
Val IT presented 22 IT related business pro-
cesses, which are categorized in three domains:
value governance (VG), portfolio management(PM) and investment management (IM) (ITGI,
2008). The assumption in this research is that
by applying Enterprise Governance of IT prac-
tices as presented in COBIT and VALIT, the
likelihood of achieving the IT goals increases.
Achieving IT goals in turns increases the likeli-hood of achieving business goals such as client
satisfaction and revenue growth; business goals
that can be used as a proxy for business value
(see Figure 7).
The research was based on an interna-
tional survey, gathering over 500 data entries
covering 91 variables. The Pearson correlation
technique was used to assess the different as-
sociations within this dataset. This analysis
clearly revealed positive relationships between(1) the implementation status of COBIT/Val IT
processes and the achievement of IT goals, and
(2) between the achievement of IT goals and
the achievement of business goals. This result
suggests that the implementation of COBIT/Val
IT practices ultimately results in the achieve-
ment of business goals, or in a better business
value if we can assume that the achievement of
business goals is a good proxy for organizational
performance.
Looking at the correlations into more detail,
it seemed that especially IT processes (COBIT)
dealing with strategy, direction, IT investment
and risk and with acquisition of applications
and infrastructure have the highest impact on a
specific set of IT goals (see Figure 8). Regard-
ing the business processes (Val IT), the high
impact processes are fully distributed over the
three domains of Val IT (value governance-
VG, portfolio management-PM, investment
management-IM). On the other hand, someprocesses were identified that did not reveal
strong correlations with any of the IT goals. For
example, it was found that the implementation
of the COBIT process Define the information
architecture seems to have no direct impact on
the achievement of any of the IT goals. One
can only assume that, although this process is
relevant, it is still less known or it plays a role
at an intermediate level.
A broad set of specific IT goals was found
attributing most to the achievement of some
general business goals, typically referring to
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improving business processes and cost opti-
mization (see Figure 9).We did not only measure the associations
between the achievement of IT goals and
business goals, but also compared these re-
sults against our previous research where we
reported on the most important IT goals and
(IT related) business goals for organizations
across different sectors (Van Grembergen, De
Haes, & Van Brempt, 2008). This comparison
revealed a knowing-doing gap for some im-
portant goals, implying that organizations areaware of the importance of these goals but do
not manage to realize them in a proper way.
A typical example is the IT goal Align the IT
strategy to the business strategy which was
ranked as the most important goal (rank 1) but
only ranked 7th regarding actual achievement
status. As an opposite example, the IT goal
provide IT compliance with laws and regula-
Figure 8. High impact IT processes and high impacted IT goals (IT goals numbers refer to number
in Figure 6) (Van Grembergen, De Haes, & Van Brempt, 2009)
Figure 7. Governance practices and business value (Van Grembergen Wim, De Haes Steven, &
van Brempt, 2009)
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tions was ranked on the 5th place in terms of
importance, but received the highest rank for
achievement status.
ConCluSIon
In this article the authors describe their eight
year research journey into IT governance. Over
the years, they came to the conclusion that, in
order to focus more on the business involvement,
a shift in name towards Enterprise Governance
of IT was needed. Enterprise Governance of IT
is defined as the definition and implementation
of processes, structures and relational mecha-
nisms that enable both business and IT people
to execute their responsibilities in support
of business/IT alignment and the creation ofvalue from IT-enabled business investments.
In the context of their Information Technology
Alignment and Governance (ITAG) Research
Institute, they conducted multiple research
projects trying to reveal which Enterprise
Governance of IT practices are implemented
in organizations and what their relationship is
with business/IT alignment and business value.
As reported in this article, their explorative
research led to the identification of 33 Enter-
prise Governance of IT practices and showed
associations between these practices, alignment
and business value.
The researched topics introduced in this
article will remain the central research themes
within the ITAG Research Institute. These
topics are also the central subjects of this new
International Journal on IT/Business Alignmentand Governance (IJITBAG). The mission of the
journal is to further advance theory building and
practice regarding management and governance
issues within the IT-related business domain.
The journal encourages practice-oriented re-
search articles from academics, case studies,
and reflective articles from practitioners. Both
quantitative and qualitative research articles are
welcome, and special attention is giving to ex-
plorative research reports that leverage innovate
research methodologies to explore new insights
in the practitioners field and theory.
rEFErEnCES
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Figure 9. High impact IT goals and high impacted business goals(IT and business goals numbers
refer to number in Figure 6) (Van Grembergen, De Haes, & Van Brempt, 2009)
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Copyright 2010, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global
is prohibited.
Chan, Y., & Reich, B. (2007). IT Alignment: whathave we learned.Journal of Information Technology,22, 297315. doi:10.1057/palgrave.jit.2000109
De Haes, S., & Van Grembergen, W. (2008). An
exploratory study into the design of an IT gover-nance minimum baseline through Delphi research.Communications of the Association for InformationSystems, 22.
De Haes, S., & Van Grembergen, W. (2009a). Anexploratory study into IT governance implemen-tations and its impact on business/IT alignment.Information Systems Management, 26(2), 123137.doi:10.1080/10580530902794786
De Haes, S., & Van Grembergen, W. (2009b).Exploring the relationship between IT governance
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Wim Van Grembergen, PhD, is professor at the Economics and Management Faculty of the
University of Antwerp (UA) and at the University of Antwerp Management School (UAMS).
He teaches information systems at bachelor, master and executive level, and researches in IT
governance, IT strategy, IT performance management and the IT balanced scorecard. Within his
IT Alignment and Governance (ITAG) Research Institute (www.uams.be/itag) he also conductsapplied research in these domains. Dr. Van Grembergen is a frequent speaker at academic and
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professional meetings and conferences and serves in a consulting capacity to a number of firms.
He has several publications in leading journals and published books on IT governance and the
IT balanced scorecard. His most recent book with Steven De Haes Enterprise Governance of IT:
Achieving Strategic Alignment and Value is published in 2009 (Springer).
Steven De Haes, PhD, is professor information systems management at the University of Antwerp
Management School (UAMS) and the Economics and Management Faculty of the University
of Antwerp (UA). He has teaching assignments in many executive and master programs in the
domain of IT governance, IT assurance, strategic alignment, value creation, IT performance
measurement, etc. He is actively engaged in applied research within the IT Alignment and
Governance (ITAG) Research Institute (www.uams.be/itag) and acts as an advisor to firms in
these domains. He has several publications in leading academic and professional journals and
has presented research results at many international conferences. In 2009, he co-authored with
Wim van Grembergen the bookEnterprise Governance of IT: Achieving Strategic Alignment
and Value (Springer).