Business divestment tends to be the result of a change in the business strategy or due to
changing economic circumstances that force a company to either close or demerge business
units that are no longer profitable or do not fit the company’s profile. Business divestment
strategy forms part of a company’s long-term business goals to ensure long-term viability,
maximise return on investment and to maintain the company’s competitive advantage.
Business divestment strategies are often a result of a company that needs to reposition itself
with regard to its competitive position in the market. Divestments and closures are often
described as strategy’s missing link.
The South African coal mining industry is a mature industry spanning a number of decades;
as a result, a large number of collieries have closed down and numerous others are
approaching end of life and will cease production in the near future. Mine closure or divestment
is an instrument of strategy to free up capital and resources and to assist the business to
refocus on core activities and to reverse over-diversification. The business success of a divestiture is usually evaluated by the measure of success in achieving the underlying strategic
goal that was set when the divestment strategy was adopted. Strategy decisions need to
embody a sound governance foundation. Al internal departments and operations need to be
aligned with the company’s goals and strategy and should persevere in focusing its actions
on obtaining these goals.
The goal of this study is to identify what the essence, content and characteristics of a
divestment framework for IT governance should be. In order to achieve this goal, the research
focused on the following objectives as reflected in the research question, sub-research
questions and chapter divisions:
• To create an understanding of the South African mining environment, but more specifically
the coal mining industry by depicting and describing the impact of the macro and market
environment in strategy formulation to align with a mine closure or divestment decision.
• To establish the impact of a divestment strategy on the IT governance model and ITbusiness
alignment and determine the steps that IT and business should take to ensure
alignment in order to support a divestment strategy.
• To determine if any of the existing IT governance frameworks and standards could be
implemented or adopted to serve as a divestment framework for IT governance.
• To establish what the content and logical steps for a divestment framework for IT
governance should include and how it should be deployed.
• To test the proposed divestment framework for IT governance for validity and soundness
at the hand of three case studies.
As a result of the literature review and study conducted for this thesis, the author determined
the following specific dimensions pertaining to the fundamental building blocks of a divestment
framework for IT governance to support company divestment, more specifically mine closure:
• The IT department needs to understand the role it needs to fulfil in the company to support
the achievement of the company’s business strategy. Information systems and
infrastructure are deployed to influence unparalleled business proficiencies, merge and
divest companies and business units, restructure industries, and expedite global
competition. The company’s IT strategy needs to align itself with the business strategy in
order to support the company when a divestment strategy is implemented. Because of the
complexity and inter-relatedness of Information Technology systems and infrastructure
with the rest of the business units business processes, a divestment initiative should
include the steps that need to be taken to de-integrate or disentangle the IT infrastructure
and IT portfolio from the rest of the company.