Management control includes both planning and control of IT activities for a period of one to two years. It is the link between strategic planning and operations. See figure 1 for a representation of the planning hierarchy and interaction among the various planning levels. All management control decisions are conditioned by the long-term resource allocations decided in the strategic level, and will constrain what resources will be available for operations planning and control. Objectives for management control are set in the strategic plan, while operational objectives are decided in the management control process.
Management control plays the vital role of translating strategies into actions, operations.
See figure 2 for the different architectures. The basis for this decision is the notion of transfer price , what IT services and technologies should cost to the users. IT as an expense center or as an income center . Businesses that adopt the income center concept generally create an IT subsidiary, which sells excess capacity to other businesses, and also allow users to buy IT services from outside services if the internal IT prices are higher than outsourcing. For more details read textbook pages 425-432.