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RESEARCH ARTICLE IT CONSUMERIZATION AND THE TRANSFORMATION OF IT GOVERNANCE1 Robert Wayne Gregory and Evgeny Kaganer IESE Business School, University of Navarra, 08034 Barcelona, SPAIN { XXXXXXXXXX} {...

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RESEARCH ARTICLE
IT CONSUMERIZATION AND THE TRANSFORMATION
OF IT GOVERNANCE1
Robert Wayne Gregory and Evgeny Kagane
IESE Business School, University of Nava
a,
08034 Barcelona, SPAIN { XXXXXXXXXX} { XXXXXXXXXX}
Ola Henfridsson
Warwick Business School, The University of Warwick,
Coventry CV4 7AL, UNITED KINGDOM { XXXXXXXXXX}
Thie
y Jean Ruch
Institute of Information Systems, The University of Goettingen,
37073 Göttingen, GERMANY { XXXXXXXXXX}
IT governance describes the decision rights and accountability framework used to ensure the alignment of IT-
elated activities with the organization’s strategy and objectives. Conversely, IT consumerization refers to the
process whereby the changing practices and expectations of consumers influence the IT-related activities of
workers and managers in organizations. We propose that IT consumerization not only challenges the founda-
tions of IT governance but ultimately also transforms it. To explore this research problem, we utilize the
punctuated equili
ium theory and a case study of IT consumerization and the transformation of IT governance
in a large global bank. Our findings suggest that the widespread adoption of digital technology in everyday
life leads to “everyone’s IT,” which is a new set of shared beliefs among consumers that highlights democra-
tized access and individualized use of IT. As everyone’s IT beliefs begin to alter the IT-related activities of
workers, the result is IT governance misalignments that ultimately lead to a punctuated transformation of IT
governance that dismantles functional IT governance. The establishment of platform-based governance marks
a new equili
ium period. Our mid-range theory contributes to the IS domain with the novel concept of
everyone’s IT and a grounded explanation of IT governance transformation in the context of IT consumeri-
zation. Our theory offers a set of significant research and practical implications.
Keywords: IT consumerization, IT governance transformation, digital transformation, punctuated equili
ium
theory, case study, grounded theory method, mid-range theory
Introduction 1
The expectations and practices of consumers increasingly
influence the activities of workers and managers in organi-
zations (Ga
iel 2005; Ga
iel et al. 2015; Ga
iel and Lang
XXXXXXXXXXThis
oader consumerization phenomenon is related
to the growing direct societal impact of digital technology
(Gannon 2013; Yoo 2010) and the changing patterns of
technology-in-use (Ga
iel 2008; Mazmanian et al. 2013).
Information Systems (IS) scholars use the notion of IT con-
sumerization (Ha
is et al XXXXXXXXXXto examine the process
whereby the changing expectations and practices of con-
sumers, shaped by the wide adoption of digital technologies
in everyday life, influence the IT-related activities of workers
1Sue Newell was the accepting senior editor for this paper. Liette Lapointe
served as the associate editor.
The appendices for this paper are located in the “Online Supplements”
section of the MIS Quarterly’s website (http:
www.misq.org).
DOI: XXXXXXXXXX/MISQ/2018/13703 MIS Quarterly Vol. 42 No. 4, pp XXXXXXXXXX/December XXXXXXXXXX
Gregory et al./IT Consumerization and the Transformation of IT Governance
and managers in organizations. IT consumerization is asso-
ciated with blu
ing boundaries between production and
consumption, work and leisure, enterprise IT and consume
IT. Thus, one of the first thought pieces on IT consumeri-
zation highlighted the “dual use” of IT by both businesses and
consumers (Moschella et al. 2004).
One important but overlooked facet of IT consumerization is
that consumers can be both workers and customers. As noted
y Ga
iel et al. (2015), “workers are consumers in their own
ight, swapping hats continuously and frequently wearing two
hats at the same time” (p. 639), while there has also been “the
ise of customer sovereignty…occu
ing in the name of the
collective mass of consumers” (p XXXXXXXXXXHowever, the pre-
vious IT consumerization literature has focused exclusively
on workers as consumers and overlooked consumers as
customers (Ha
is et al XXXXXXXXXXNonetheless, this apparently
minor oversight is imperative for our understanding of the IT
consumerization phenomenon.
An unaddressed but seminal question for IS scholars is how
IT consumerization impacts IT governance, the decision
ights and accountability framework used to ensure the align-
ment of IT-related activities with the organization’s strategy
and objectives (Brown and Grant XXXXXXXXXXBy encouraging
desirable behavior in using IT, IT governance had arguably
een the main source of influence on the IT-related activities
of workers and managers in an organization. However, the
ise of customer sovereignty and worker empowerment high-
lights IT consumerization as a competing influence on this
ehavior. This highlighting raises the question of whether IT
consumerization leads to the transformation of IT governance.
The previous IS research has focused either on the transfor-
mation of the IT function, wherein IT governance is viewed
as simply one component of an IT function profile (Gregory
et al. 2015; Guillemette and Paré 2012b), or on evolutionary
changes of IT governance. In this latter category, studies on
IT governance change explored the shifting locus of IT
decision making (Olson and Chervany 1980), the evolution of
IT governance modes (George and King 1991; King 1983;
Williams and Karahanna 2013), and the contingency con-
ditions that influence their adoption (Sambamurthy and Zmud
1999; Tiwana and Kim XXXXXXXXXXHowever, we know little
egarding how more profound shifts in IT governance unfold
and, most importantly, what role IT consumerization plays in
such transformations.
To explore the interplay between IT consumerization and IT
governance, we use the grounded theory method (Birks et al.
2013) to rigorously analyze data collected at a large bank,
GlobalBank. Consistent with the idea that fieldwork is done
with an “open mind” but not with an “empty head” (Dey
1999), we utilize the meta-theoretical lens of punctuated equi-
li
ium theory (Tushman and Anderson 1986; Tushman and
Romaneli 1985) and view IT governance as a part of an
organization’s deep structure, that is, a set of fundamental
choices an organization has made concerning the basic
organizing parts and activity patterns that maintain its
existence (Gersick XXXXXXXXXXWe address the following research
question: How and why does IT consumerization transform
IT governance in large organizations?
Addressing this research question is important due to the
growing evidence that IT consumerization vastly expands the
scope of IT use in organizations (Leclercq-Vandelannoitte
2015) and
idges the knowledge gap between IT profes-
sionals and end-users, including employees (Ja
ahi et al.
2017) and customers (Zureik and Mowshowitz XXXXXXXXXXThis
finding puts in question the ability of the IT function, the
primary unit of analysis to date (Guillemette and Paré 2012a),
to manage and lead all IT-related activities in a firm. The
focus shifts to governing IT across organizational boundaries;
thus, the importance of IT governance in today’s organi-
zations transcends that of the IT function (Peppard 2018).
Indeed, as the editors of the special issue on IT and
organizational governance in the Journal of Management
Information Systems note:
Information technology (IT) has spawned previously
infeasible forms of organizational governance, and
these new logics have simultaneously amplified the
need for effective IT governance…[while] emergent
governance a
angements have altered the conven-
tional notions of organizational boundaries (Tiwana
et al. 2013, p. 7).
To fully understand what drives these changes in organiza-
tional boundaries and IT governance forms, one needs to
consider IT consumerization, the associated changes in IT-
elated activities of key organizational stakeholders, and the
ensuing transformation of structural a
angements.
In this paper, we develop a mid-range theory that contributes
to the IT governance literature (e.g., Tiwana et al XXXXXXXXXXwith
a compelling explanation of how IT consumerization leads to
IT governance transformation in large organizations. Further-
more, our concept of “everyone’s IT,” highlighting the
democratization of IT access and the individualization of IT
use, extends the emerging body of literature on IT consumer-
ization (e.g., Ja
ahi et al XXXXXXXXXXIn what follows, we provide
an overview of IT governance evolution and the literature on
IT consumerization, introduce the punctuated equili
ium
meta-theoretical lens, describe our research process, present
key findings from the case study, construct the mid-range
1226 MIS Quarterly Vol. 42 No. 4/December 2018
Gregory et al./IT Consumerization and the Transformation of IT Governance
theory propositions, and discuss their implications for theory
and practice.
Background
IT Governance: A Historical View
IT governance is defined as the decision rights and account-
ability framework deployed through a mix of structural,
processual, and relational mechanisms and used to ensure the
alignment of IT-related activities with the organization’s
strategy and objectives (Sambamurthy and Zmud 1999;
Tiwana and Kim 2015; Wu et al XXXXXXXXXXOn the basis of the
special issue on IT governance (Tiwana et al XXXXXXXXXXand ou
analysis of the IS governance literature (see Table A1), we
identified three key dimensions of IT governance that map
closely onto its definition: (1) focus of IT governance (what
to govern), which refers to what IT-related activities and
artifacts must be aligned with organizational strategy and
objectives; (2) scope of IT governance (who to govern),
which refers to which actors and stakeholders are held
accountable for ensuring IT’s contribution to the organization;
and (3) patterns of IT governance (how to govern), which
efers to what mechanisms are put in place to ensure
“desirable” IT-related activities and outcomes. In what fol-
lows, we provide a
ief historical overview of the evolution
of IT governance along these three dimensions.
While the term IT governance did not become prominent in
the literature until the second half of the 1990s (Sambamurthy
and Zmud 1999), studies of related concepts, such as
computer systems management controls and control of infor-
mation systems (Olson and Chervany 1980), existed in the
late 1960s and early 1970s. At the time, the focus of what
would later become IT governance was centered on organi-
zational IT assets, such as mainframes, to facilitate data
processing and task automation. The scope of IT governance
was bounded to the “computing inner circle” of individuals
with specialized technical skills who held exclusive rights to
access and operate enterprise IT (Niederman et al. 2016).
During this period, the first IT (a.k.a. data processing or com-
puter services) departments were formed, and the relationship
etween IT and business leaders began to formalize (Po
a et
al XXXXXXXXXXHardware was expensive; hence, concerns ove
how to optimize its utilization dominated the agenda (Gannon
2013).
From the late 1970s to the early 1990s, the use of IT in organ-
izations exploded,
oadening the focus of IT governance to
accommodate the emergence of minicomputers and late
personal computers (Markus and Bjørn-Andersen 1987;
Niederman et al XXXXXXXXXXWhile the autonomy of end-users
grew significantly during this time, IT professionals ulti-
mately needed to do more, not less, work (Po
a et al. 2006).
Thus, the scope of IT governance remained largely confined
to the IT function, which was responsible for user support as
well as the design, development, and maintenance of IT
systems (Niederman et al. 2016).
With the
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1 . CFOs and IT leaders on IT costs:
CIOs believe that the IT costs are  cost centric  where they are taking the role of the new trusted business partner for the adaption of the technology which resulted in the not requirement of the IT director  who is mostly involved in the budget spending of the business systems and services. This shift resulted in the decentralisation and no longer one -to-one relationship between the CFO and CIO where the people are buying their own cloud-based solutions to meet their objectives. The top priority of CIOs is IT strategy management.
To shift to the new management operations the CFO should be invited for the successful implementation of the ideas and they should work in close harmony to study the IT spends of the business which creates a common ground. Shared desire of the transparency between the IT leader and the CFO  is to take ground decisions will generates a difference in making to move IT from cost centre. It will be fruitful if It leader works with finance department regarding It budget which makes business expansion as well as the profits  as part of the digital transformation.to overcome the constraints of the IT department the finance teak will satisfy the shareholders by the technology initiation.
2. IT cost center or not
IT remains as the cost center and is being used for the evaluation of every organisation and it also relies on the global economy and in many businesses it is viewed as a burden rather than the catalyst which is used for the improvement of the business to achieve the firm long-term larger goals. most of the IT budgets will rely on the maintenance of the existing applications and the infrastructure and can be viewed as an expensive burden. To cut down the cost the IT department is focussing on new vendors and products and looking for new solutions which can cut down the cost to
ing a technology into the market. Hence the cost will rise resulting in the pain to the business and new investments should be made to minimise the costs. Hence, IT is considered as...
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