The Art of the States. IT Governance and Organizational Performance in American State Governments.

This report presents the results of a study of innovations in the organization and management of work activities. The research question addressed was whether and how administrative innovations contribute to improving the performance of organizations, such as their efficiency and effectiveness and their ability to develop and deliver innovative products and services.
More specifically, the study looked at the performance effects of innovations in the governance and management of information technology (IT) in the 50 American state governments. Governments everywhere are trying to improve efficiency and effectiveness, and IT is seen as a key factor in achieving that goal. But delivering IT projects and services in state government is an activity that has to be organized and managed efficiently and effectively in order for states to achieve the desired benefits of using IT. The study focused on how states currently govern IT, how and why they made changes in the way they govern IT, and the performance outcomes they achieved from changing their IT governance arrangements.
Scientifically, the study aimed to test and extend current thinking about how, why, and how much administrative innovations, in general, and IT governance arrangements, in particular, can improve organizational performance. In order to make a strong test of current ideas, the study used different measurements and data collection procedures than prior studies and examined the research questions in the public sector context. By finding that some American state governments achieved IT-related performance improvements by changing their IT governance arrangements, this study increases confidence in the idea that administrative innovations are important to organizational success.
The study also significantly extends current thinking about IT governance by sho wing that governance has two dimensions — 1) organizational structure and personnel management authority and 2) decision making influence — that can each affect organizational performance, but do not necessarily go together. This means that organizations may have more choices of how to design good IT governance than is typically thought. In addition to two familiar options (centralized and decentralized), the study explored the potential of two additional governance arrangements — 1) centralization-by-standardization and 2) decentralization-by-participation. Only the first of these additional alternatives (centralization-by-standardization) was observed in the 50 American states, raising the possibility that the second option (decentralization-by-participation) is an unexploited opportunity. Although future research will be necessary before confident recommendations for action can be made, the results of this research indicate that some states are already benefiting from adopting IT governance innovations, and that other states could possibly also do so.