In an emergency, managing, coordinating and deploying existing information technology resources play critical roles in minimising disruptions in service delivery. Organisations must take that into consideration when choosing between centralised IT governance systems and decentralised ones. Jiyong Park, Yoonseock Son and Corey M Angst write that during the COVID-19 crisis, centralised coordination of IT resources helped some universities perform better than others that relied on decentralisation.
The COVID-19 pandemic forced organisations to react and adjust to new ways of delivering services to consumers. It also showed the value of a robust and resilient information system that affords organisations the capabilities to adapt to a rapidly evolving business environment. Although the pandemic was a rare event that had profound impacts on businesses all over the world, there is little doubt that unexpected disruptive events will continue to occur in certain industries, or in specific geographic regions, or result from political environments that create turmoil in the business world. The recent pandemic serves as testimony to the importance of information technology (IT) in managing such unplanned transitions and continuing service operations during crises. Given limited time and resources immediately following the identification of a crisis, management, coordination, and deployment of existing IT systems and resources play critical roles in minimising disruptions in service delivery and maintaining business continuity.
Prior scholarship has highlighted the trade-offs between different IT governance structures: the coordination efficiency of centralisation versus the responsiveness facilitated by decentralisation. The common understanding has been that the decentralised governance of IT benefits organisations facing a higher level of environmental uncertainty, as it enables them to be more responsive to dynamic and uncertain environments. However, our research shows that the opposite is true in the case of an extreme level of uncertainty, such as the one brought on by the pandemic.
Our new paper (Park et al. 2023) examines the effects of centralised and decentralised governance of IT in the context of the COVID-19 pandemic and the need for a rapid transition to online content delivery and support at US higher education institutions (HEIs). In response to the crisis, most US universities discontinued in-person classes and made an abrupt transition to online classes, so-called emergency remote teaching. The transition to emergency remote teaching during the pandemic is characterised by an abrupt, unplanned, and temporary shift of instructional delivery to the remote mode, without sufficient time for adapting and redesigning the courses to an online environment. While it was evident that IT would play an instrumental role in the transition to emergency remote teaching, the lack of understanding on managing and coordinating the existing IT capabilities and resources to meet the organisational goal jeopardised many of HEIs. In this notion, we assessed how IT investment and governance contribute to supporting HEIs to maintain the students’ satisfaction levels under extreme levels of environmental turbulence and uncertainty.
To assess the role of IT governance in managing the pandemic-driven online transition, we employed a difference-in-differences model, in which we compared how the impact of the pandemic shock on student satisfaction with classes differs across institutions with different IT governance. To this end, we constructed a unique dataset on IT investment, governance, and course evaluations from 463 US four-year colleges from 2017 to 2020, which comes from three sources: (1) RateMyProfessor.com for course evaluation across US institutions, (2) EDUCAUSE for HEIs’ survey responses on their IT investment and governance, and (3) Integrated Postsecondary Education Data System for universities’ characteristics.
Our findings show that centralised IT helped HEIs adapt better to the pandemic in terms of maintaining student satisfaction with classes during the pandemic. We also found that the benefits of centralised IT are greater for universities with a smaller number of students and higher dissimilarity of local units (academic departments, instructional programs). This highlights that centralised IT governance, geared toward facilitating organisational coordination, should be considered a key precursor to digital resilience, providing the necessary means to enable organisational agility that allows firms to continue to deliver high-quality services.
Moreover, our findings emphasise the importance of the strategic role of the chief information officer (CIO) in leveraging centralised IT to cope with rapid organisation-wide transitions during the crisis. Thus, organisations could consider granting more authority to CIOs and senior IT leaders by strategically positioning them in the organisation to align IT activities with organisational priorities and establish rapid adaptation strategies in response to a crisis. For instance, as central authorities are (re)assembled during a disaster, a task force can be established with CIOs in key decision-making roles with authority to temporarily centralise IT resources across the organisation, even in organisations without centralised IT governance structures. We further obtained opinions from CIOs of multiple US universities about how they dealt with the institutional necessity of emergency remote teaching during the pandemic, which lent support to our arguments and empirical findings.
While our empirical context is specific to higher education, we believe our findings are generalisable to other organisations in service sectors that face rapidly changing environments. Interestingly, our analysis of the heterogeneous impacts of different organisational IT systems within higher education reveals that the driving forces leading to a higher level of student satisfaction are not IT applications that are specific to the education sector. Instead, rather than applications such as learning management systems that are specific to HEIs, general IT management, and institution-wide information systems and IT infrastructure play instrumental roles in supporting and coordinating the processes of systematic changes and internal operations. These types of IT systems and infrastructure are also key components of any organisation in the service sector. Therefore, when any disruptive event interrupts physical operations and forces organisations to shift work from in-person to remote, we suggest that IT investment and governance—particularly general IT management and institution-wide IT systems and infrastructure—will be the key drivers that enable business continuity.
The conventional norm of effective IT governance might not be applicable and appropriate when it comes to managing disasters and emergency situations in a tumultuous environment. The unprecedented nature of the disruption forced many organisations into a rapid emergency response mode that heightened the importance of being nimble and responsive in the face of limited resources across the organisation. In the higher education context, our research demonstrates that the institutions that utilised centralised coordination of IT resources performed better than those that relied on the purported flexibility benefits enabled by decentralisation. As the conventional wisdom may not hold in circumstances with unparalleled uncertainty and the lack of blueprints in responding to a crisis, our study echoes the need for reconsideration and reconciliation of the trade-offs imposed by different types of IT governance structures and their role in building digital resilience.
- This blog post is based on The Value of Centralized IT in Building Resilience During Crises: Evidence from U.S. Higher Education’s Transition to Emergency Remote Teaching, MIS Quarterly.
- The post represents the views of its author(s), not the position of LSE Business Review or the London School of Economics.
- Featured image by Lucas Law on Unsplash
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