Blackshop Restaurant IT Governance Assessment

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Introduction

To begin with, there is a strong necessity to mention that proper organization of IT structure is one of the most important aspects of successful business activity. The fact is that contemporary business cannot be mentioned without a properly adjusted communication system and taking into consideration the fact that the main task of IT departments is to maintain this communication, proper organization of IT structure will be regarded in the paper from several different angles.

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Originally, the main aim of this paper is to analyze the IT structure of Blackshop Restaurant Company from the following perspectives: the organizational structure and impacts of the informational systems on the business activity, sourcing of the IT structure (in the light of HR management), the allover governance of the system. The financial side of this issue will be regarded in the latest turn, as this is generally defined by the necessities of the previously listed factors.

Organizational Structure

Communication process within the organization
Chart 1 (Communication process within the organization).

First, it should be emphasized that the organizational structure is the presupposed hierarchy of communication and the central aspect of organizational activity, as it defines the importance and authority and the communication process among the departments of the organization. The original communicational structure is represented on Chart 1

Following this chart, the hierarchy and the authority of the enlisted bodies are represented. The fact is that, per Shah (2004), this is the classic image of the team-based organizational structure. This researcher also emphasizes the following statement (Shah, 2004, p. 456):

Teams can be both horizontal and vertical. While an organization is constituted as a set of people who synergize individual competencies to achieve newer dimensions, the quality of organizational structure revolves around the competencies of teams in totality. Larger bureaucratic organizations can benefit from the flexibility of teams as well.

Another statement, that should be emphasized, is the fact that the hierarchical organization of the Blackshop Restaurant Company is divided into functional and divisional. Originally, the functional aspect of the hierarchy groups the activity together, while the division function is the allocation of the business tasks among departments: accounting, marketing, finance, engineering, and production. Currie (2005, p. 186) is his turn states the following notion:

As the training, work, and values are typically similar for people in the same function, their collaboration and efficiency is promoted within the function. This creates economies of scale and enables in-depth knowledge and skill development. At the same time coordination and cooperation with other departments is more difficult.

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From this perspective, it should be emphasized that the decision to make the OpenTable system restricted for the wide access was correct, as this system is for managerial purposes only. Surely, this would simplify the work for the technical staff, nevertheless, the divisional function of the hierarchical structure should divide the original responsibilities and assignments. (Moolani and Peng, 2009)

Sourcing

Sourcing is the factor of IT management that is aimed to arrange the strict structure for the technical maintenance of the IT-sphere within the organization. Originally, Blackshop Restaurant Company is not large enough for keeping a separate team for maintaining the IT structure. The approach, which is used for this managerial aspect is insourcing. Taking into consideration the simplicity of the hierarchical structure and the communication flow of the organization, it should be emphasized that there is no need to arrange the outsourcing management of the IT department. Thus, the approach towards managing the department should be regarded as the simplified principle of multi-departmental management, which presupposes separate responsibility for managing the organizational structure of the communication process. (Pearlson and Saunders 2010)

The fact is that the insourcing approach is based on the definite flow of commands and managerial communication. Blackshop Restaurant Company’s flow is represented on Chart 2

Insourcing managerial process
Chart 2 (Insourcing managerial process).

Thus, it should be emphasized that the IT platform, which is managed by the IT personnel of the company should be regarded as the central aspect of the allover IT management, nevertheless, the management process is not adjusted properly, as a business partnership is the weakest link in the flow. The OpenTable software is not maintained properly by the developers. By Pearlson and Saunders 2010, 310): the following statement should be emphasized:

It is argued that if a company outsources a core competency, it can lose control over that competency or lose contact with suppliers who can help it remain innovative concerning that competency. Failing to control the competency or stay innovative is a sure way to forfeit the company’s competitive advantage. Further, by outsourcing commodity work, a firm can concentrate on its core competencies.

On the one hand, the outsourcing approach could help resolve these issues, nevertheless, the company requires quick responses, and rapid control in the sphere of IT department management.

Governance of the IT System

The information system of any organization may be compared with the sails of a vessel. Originally, if the information system is arranged properly, it means that the company follows the correct direction, and will inevitably reach the destination point, stated by the business strategy and marketing plans. From this perspective, it should be emphasized that the sails of the Blackshop Restaurant Company are holed, as the information system is not maintained properly, and the managerial issues in the sphere of IT are regarded to be weakly performed. (Moolani and Peng, 2009) Taking into consideration the fact that the reservation system of the company is software-based, and, per the case study, it required essential improvement, it should be emphasized that the governance structure should be changed essentially. There are several ways of solving the appeared difficulties:

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  • Increase of the IT personnel
  • Extension of partnership with software development
  • Restructuring of IT system and the post of Chief Information Officer should be provided. (Pearlson and Saunders, 2010)

The allover governance process of BRC requires restructuring and modification of the allover approach as if the business activity is modified along with the marketing approach, the software basis and the principles of IT management should be adopted for effective performance in the circumstances of modified approaches towards business performance.

The improvement of the governance of the IS system is also required for the security of business data. Poor management of the IT department may lead to the vulnerability of the Informational Structure, thus, subjecting the confidential business information to disclosure.

Financing

On the one hand, funding IT resources depends on the organizational structure, the approaches towards managing this sphere and the managerial structure of this business aspect, nevertheless, on the other hand, if the funding is essentially restricted, it heavily influences the structure and the allover process of governing the informational system.

Following the information given in the case study, it should be emphasized that Blackshop Restaurant Company uses an allocation financing system. As Bavly (2007) states in his research, this is one of the simplest financing tools, nevertheless, it is effective enough for such companies as BRC. The following notion should be emphasized (Pearlson and Saunders 2010, p.178):

Actual usage does not need to be captured. The rate charged is often fixed at the beginning of the year. It offers two main advantages. First, the level of detail required to calculate the allocations is much less, and for many organizations that aspect saves expense.

In the light of this perspective, the concept of activity-based financing should be implemented into the financial system. It presupposes the proper allocation of the financial resources within the company and helps to decrease the expenses if the finances are not used effectively, consequently, the IT structure may be modified following the latest business tendencies. (Moolani and Peng, 2009)

Conclusion

Finally, it should be stated that the IT governance of the Blackshop Restaurant Company, following the case study, experiences essential difficulties. Despite the fact, that the software basis, which is used for reservation of tables is rather helpful for simplifying the managerial procedures, it may be used more effectively, if the IT governance, and the allover department structure is reorganized. The sourcing approach may be also changed, nevertheless, a more detailed study should be performed for a definite reply. Thus, the financial system will be changed in accordance with the new structure, and the effectiveness of managerial performance will be improved.

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Reference List

Albers, M. J. & Mazur, B. (Eds.). (2005). Content & Complexity: Information Design in Technical Communication. Mahwah, NJ: Lawrence Erlbaum Associates.

Bavly, D. A. (2007). IT Governance and Accountability. Westport, CT: Quorum Books.

Currie, W. (2005). The Global Information Society. Chichester, England: John Wiley & Sons.

Marchand, D. A. (Ed.). (2006). Competing with Information: A Manager’s Guide to Creating Business Value with Information Content. New York: John Wiley & Sons.

Moolani, K.A., Peng, M (2009) Blackshop Restaurant. Richard Ivey School of Business

Shah, S. K. (2004). Improving Information System Performance through Client Value Assessment: A Case Study. Review of Business, 22(1), 37.

Pearlson Keri E. & Saunders Carol S. (2010) Managing And Using Information Systems. A Strategic Approach, 4th Edition, Wiley.

Pearlson and Saunders (2010).

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