22 May 2025
1. Identify other components of a business.
Internal auditing is supposed to be an important component in businesses. This component ensures the business is following policies and procedures. This will determine if the business’s risk management process is effective or not. The internal audit includes 5 primary procedures: “risk identification, risk assessment, risk decisions, controlling and monitoring risks, and reporting and disclosure of risks” (Weekes-Marshall, 2020, #160).
2. Where do they “fit” in the organization?
This component fits in the risk management and internal controls. This is overseen by corporate governance which would fall under “Operations” in the presentation.
3. Where does IT “fit” in an organization?
IT can provide the improvement of performance to better provide services to customers and organizations. IT is adopted by businesses to “boost creativity, competitive edge, and ultimately the revenue” (Akhtar et al., 2021, #146). In the presentation, this would mean that IT would fall under all sections of the “Typical” Organization.
4. What are the Roles & Responsibilities w/in IT?
Some examples of the roles and responsibilities according to the article cited in #3: “enables firms to manage the opportunities, innovation process, and analyses the innovation performance” (Akhtar et al., 2021, #146). This is especially beneficial for banks so that they can improve the overall business performance. IT allows businesses to also provide proper learning opportunities for the employees. However, the size of a business does affect the proper adoption of technology, thus affecting organizational learning. IT allows businesses to communicate online with customers and managers. Adoption of technology has allowed the time to communicate with others to significantly decrease, allowing more communication in a shorter time frame. Finally, IT has helped provide the cutting of costs since it allows business to conduct communications outside the business and with customers by using less paper and shipping materials.
5. How should IT itself be organized?
There are 3 principles to organize IT function: 1) organize IT to foster co-evolution between the business and the function, 2) organize IT to nurture relationship networks for visioning, innovation, and sourcing, and 3) organize IT to explicitly manage eight value-creating processes (Agarwal & Sambamurthy, 2020, 246-248). The first principal is meant to allow the business to develop over time. This is used for many businesses to create a better connection with their customers. The IT structure will capture and create a profile of a customer, showing the level of business this customer has with the business. Depending on the level of business this customer has, the business can offer individualized prices and services. The second principle is broken down into visioning, innovation, and sourcing networks. Visioning is the network between senior management and senior IT executives to collaborate creative and strategic vision of IT in the business. Innovation is the network between businesses and IT executives that collaborate “conceptualizing and implementing” (Agarwal & Sambamurthy, 2020, #247) IT applications. This is meant to enhance the avenues such as customer relationships, manufacturing, etc. Sourcing is the network between IT executives and external partners negotiating between internal and external parties. These negotiations include “managing efficient, cost-effective, and innovative uses of IT assets and services through multisourcing arrangements, joint ventures, or strategic alliances” (Agarwal & Sambamurthy, 2020, #248). Finally, the third principle has 8 value-creating processes: 1) infrastructure management, 2) human capital management, 3) relationship management, 4) value-innovation, 5) solutions delivery, 6) services provisioning, 7) strategic planning, and 8) financial management (Agarwal & Sambamurthy, 2020, 249-250). These 8 are combined into different groups to then create the 3 sets of processes. First is foundation which is the combination of 1,2, and 3. This is how IT functions help businesses differentiate strategies and provide continuous innovation through IT (Agarwal & Sambamurthy, 2020, 250). Second is primary which is the combination of 4,5, and 6. This is considered the “front office” of IT where clients can “perceive the quality, contribution, and effectiveness of the IT function” (Agarwal & Sambamurthy, 2020, #250). Last is the third is secondary which is the combination of 7 and 8. This shows the overall wellbeing of the IT function in the business.
References
Agarwal, R., & Sambamurthy, V. (2020). Principles and models for organizing the it function (5th ed.). Routledge. 10.4324/9780429286797-11
Akhtar, S., Hongyun, T., Iqbal, S., Ashraf, S. F., & Bashir, I. (2021). Information technology importance in strategic planning. The Journal of Educational Paradigms, 03(01), 146-150. 10.47609/0301012021
Weekes-Marshall, D. (2020, 10). The role of internal audit in the risk management process: A developing economy perspective. Journal of Corporate Accounting & Finance, 31(4), 154-165. Wiley Online Library. https://doi.org/10.1002/jcaf.22471