MGT 505 Module 7 IT Governance and Alignment Example

Who Decides What the Buses Run On? IT Governance and Alignment at a Regional Transit Authority

Student Name

Master of Business Administration, Aspen University

MGT 505: Managing in an Age of Information Technology Change

Instructor Name

Month Day, Year

Who Decides What the Buses Run On? IT Governance and Alignment at a Regional Transit Authority

Susquehanna Valley Transit, a composite public transit authority, operates 64 buses and 22 paratransit vans across three counties in central Pennsylvania, carrying about 3.1 million trips a year. In the past three years, it adopted three major systems. The board approved a contactless fare system after a vendor presentation. The operations department bought a scheduling package from its own budget. The IT department upgraded the radio and vehicle location system with a state grant. Each choice made sense to its sponsor, but the systems cannot share data. Riders cannot see real-time arrivals in the fare app, paratransit dispatchers retype trips between systems, and the authority cannot measure on-time performance reliably. The executive director has asked how technology decisions should be made.

Who Decides Now

Weill and Ross (2004) argued that IT governance is about specifying who has decision rights and accountability for IT decisions. They identified five domains of IT decisions: IT principles, describing how IT will be used; IT architecture, the standards that let systems work together; IT infrastructure, shared services such as networks; business application needs; and IT investment and prioritization. They described archetypes for who decides: business monarchy, where senior executives decide; IT monarchy, where IT leaders decide; feudal, where each unit decides for itself; federal, combining central and unit input; duopoly, joint decisions by IT and business; and anarchy, where individuals or small groups decide alone. In their studies of many firms, those with clear, well-understood governance earned higher returns on IT investment.

What Alignment Requires

Chan and Reich (2007) reviewed research on business and IT alignment and found that it has several dimensions. Strategic alignment links IT plans to business strategy; structural alignment concerns where IT decisions sit; social alignment concerns mutual understanding and commitment between business and IT leaders; and cultural alignment concerns shared values about technology. They concluded that alignment is a continuing process rather than a state, and that informal relationships often matter as much as formal plans. At Susquehanna Valley, the IT director and the operations director rarely talk, which explains why the scheduling package was bought without checking whether it could connect to vehicle location data.

Measuring Maturity

Luftman (2000) proposed a model for assessing business and IT alignment maturity across six areas: communications, value measurement, governance, partnership, scope and architecture, and skills. Organizations are rated at five levels, from initial, where alignment is ad hoc, to optimized. An assessment by the executive team placed the authority at level 1 or 2 in most areas, with governance and value measurement lowest.

Why Each Group Acted Alone

Interviews explained the separate decisions. The board approved the fare system because a neighboring authority had adopted it and riders had asked for contactless payment; no one asked whether it could show arrival times. Operations bought scheduling software from its own budget because IT's queue was long and the old package was failing. IT applied for the radio grant because the deadline was weeks away and the grant required no coordination with other departments. Each group was solving a real problem quickly; none had a forum to see how its choice affected the others. This is the feudal and anarchic pattern Weill and Ross describe.

What Riders Lose

The cost of poor governance falls on riders. A rider waiting at a stop in winter cannot see whether the bus is five minutes or twenty-five minutes away, though the authority's radio system knows. Paratransit riders, many of whom are elderly or disabled, wait on hold while dispatchers retype trips between systems. Ridership surveys show that real-time arrival information is the feature riders want most.

The New Governance

A technology committee, chaired by the executive director and including the directors of operations, finance and IT and a board member, will meet monthly to approve technology investments above $25,000, including grant-funded ones. Architecture standards, set by the IT director with operations, will require any new system to exchange data with the vehicle location system. Departments will define their needs, and IT will help translate them into requirements.

Building the Relationships

Chan and Reich's emphasis on social alignment means structures alone will not fix the problem. The IT director and operations director will hold a standing weekly meeting, and an IT analyst will spend one day a week in the operations center learning how dispatchers and planners work. When operations next needs a system, IT will help write the requirements from the start rather than review a purchase afterward.

Connecting the Existing Systems

Governance also has to address the systems already bought. The committee's first project will connect the vehicle location data to the fare app, giving riders real-time arrivals within a year, and will link scheduling and paratransit dispatch so trips no longer need retyping. These projects show riders and staff that governance produces results, not only meetings.

Quarterly Portfolio Review

Each quarter, the committee will review all technology projects against the authority's service goals: on-time performance, rider information and paratransit efficiency. Projects not contributing will be reconsidered.

Costs

The committee costs staff time, about four hours a month for each member. Connecting the existing systems is estimated at $210,000, which the authority will seek through a state transit technology grant, now reviewed by the committee before submission.

Measures

The authority will track the number of systems exchanging data, on-time performance reporting, paratransit retyping time and Luftman maturity levels each year.

Conclusion

Susquehanna Valley's technology problems came from how decisions were made, not from poor choices of individual systems. Weill and Ross's domains and archetypes show where decision rights must change, Chan and Reich's review shows that relationships matter as much as structures and Luftman's model gives a way to measure progress toward technology that serves riders.

References

Chan, Y. E., & Reich, B. H. (2007). IT alignment: What have we learned? Journal of Information Technology, 22(4), 297-315. https://doi.org/10.1057/palgrave.jit.2000109

Luftman, J. (2000). Assessing business-IT alignment maturity. Communications of the Association for Information Systems, 4, Article 14. https://doi.org/10.17705/1CAIS.00414

Weill, P., & Ross, J. W. (2004). IT governance: How top performers manage IT decision rights for superior results. Harvard Business School Press.