What Is IT Governance? (Definition, Benefits And Frameworks)

By Indeed Editorial Team

Published 13 October 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

IT governance (ITG) refers to a set of policies and procedures, usually established at the executive or board level, to maximise the value of IT assets. Organisations use ITG to improve the management of their IT services and maximise the value of technology investments. Learning about IT governance can help you understand how organisations use it to control their IT operations and business processes. In this article, we answer the question, 'What is IT governance?', highlight its importance and benefits, share how to implement it in an organisation, explore common frameworks and provide best practices for IT governance.

What Is IT Governance?

The answer to 'What is IT governance?' is that it is a framework for helping companies align their business strategies with their IT strategies. By adhering to various guidelines and best practices, companies can achieve their goals while adding value to their business and maximising returns for all stakeholders. The various objectives of ITG are:

  • Alignment: It ensures that all IT services and development activities align with an organisation's strategic goals.

  • Value delivery: It focuses on improving IT systems to generate business value.

  • Risk management: It controls or mitigates all risks related to IT, including risks pertaining to investments or operations.

  • Resource management: It acquires new IT resources and efficiently uses existing ones to meet current and future business objectives.

Related: 13 Types Of Business Needs To Improve Business Operations

Why Is IT Governance Important?

Here are some reasons ITG is important for organisations:

  • Alignment and responsiveness: Coordinating governance with IT portfolio management enhances an organisation's ability to respond to challenges and manage current and future IT investments.

  • Objective decision-making: Good governance enables leadership to improve an organisation's management and control of IT activities within a company.

  • Resource balancing: Controlling critical resources is key to planning and executing IT initiatives. This enables managers to ensure that adequate IT support is available for the current and future investments in IT.

  • Organisational risk management: Proactive risk management ensures that IT managers and leaders understand the risks related to IT initiatives. It also provides the basis for implementing risk mitigation strategies.

  • Execution and enforcement: It provides managers with the framework to organise and manage all IT initiatives and demands in a central location. It assists them in making informed decisions about IT initiatives.

  • Accountability: Good governance requires accountability. It allows managers to enforce IT programme management responsibilities.

Related: What Is Corporate Strategy? (With Types And Importance)

How To Implement IT Governance?

Here are the steps to implement an IT governance structure in an organisation:

1. Outline the organisation's path to IT governance

It is important to establish IT governance roles and responsibilities for the IT strategy committee, the board and the executives. This involves setting priorities, resource allocation and tracking IT assets. Senior managers from both the IT and business teams can collaborate to implement and adopt IT governance policies for their teams.

Related: What Are The Essential Human Resource Management Objectives?

2. Develop an IT governance implementation plan

The next step is to develop an action plan to complement the organisational needs with the current circumstances. The board can assume ownership of IT governance and assign roles to managers as per the agenda. This helps align IT goals with business requirements and apply a common methodology to employ a management framework for IT governance.

Related: What Is A Business Plan? (Types And Importance)

3. Establish a roadmap for short- and long-term goals

It is important to coordinate IT governance with both short- and long-term governance objectives. This helps board members and the management understand the important IT suggestions, ensuring that the organisation can continue and expand its operations in the future. After defining an IT governance roadmap, develop a short-term IT governance strategy to establish IT governance policies and regulations.

Related: What Is A Business Environment? (Benefits And Examples)

4. Identify IT-related opportunities and risks

Understand customer requirements using surveys or assessments of users. This helps in identifying risks and opportunities related to IT. The IT and business teams can then focus on optimising IT resources and evaluating IT governance policies.

Related: 10 IT Certifications (With Qualifications And How To Prepare)

Benefits Of IT Governance

Here are some of the benefits of IT Governance:

  • Ensures the alignment of IT with organisational goals and strategies

  • Identifies strategic goals and leverages IT to fulfil them

  • Identifies IT risks and devise strategies to control or mitigate them

  • Contributes to the development of IT strategic plans

  • Embraces IT as part of an organisation's culture

  • Provides IT services to other departments

  • Improves visibility of projects and optimises IT operations

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IT Governance Processes

As part of IT governance, it is necessary to use various IT processes and follow best practices over an extended period to achieve the desired results. As part of this continuous process, repeatable, scalable and controllable IT processes ensure that internal and external customers continue to get the results they expect. The integrated collection of ITG systems includes IT systems, architectures, services, development, networks, infrastructure and processes. Here are some examples:

  • IT architecture governance: It establishes guidelines for new developments to follow when developing IT architectures. The IT architecture governance process can help organisations avoid using more technologies than they can support.

  • IT process governance: These processes govern the development and support of IT products. Standardising processes can eliminate the reliance on single individuals and support consistent outcomes across an organisation.

  • Enterprise IT governance: It refers to software and hardware designed to meet the needs of large organisations. Enterprise IT governance processes handle the complexity and scale associated with large-scale systems.

  • Product development governance: It is the process of governing the development of organisations' in-house IT products. It also focuses on product growth strategies, compliance, risk management and trust.

Related: Governance, Risk And Compliance Tools (With Benefits)

Common IT Governance Frameworks

Creating IT management systems requires companies to follow IT governance frameworks. Depending on their goals, companies often use several ITG frameworks to guide their IT governance. Some commonly used frameworks include:

  • IT infrastructure library (ITIL) framework: ITIL is the standard for all ITG frameworks. Using it is beneficial for determining the expected life cycle of IT products and measuring the effectiveness of IT governance.

  • Control Objectives for Information and Related Technology (COBIT) framework: It helps organisations implement, monitor and improve IT management best practices. It also assists companies in determining their strategic direction based on their IT control strengths.

  • ISO 20000 framework: It enables companies to select and implement the most effective IT practices and methods to achieve success. It also assists companies in implementing and maintaining a quality management system.

  • Factor Analysis of Information Risk (FAIR) framework: It identifies and quantifies risks and aims to minimise their impact. Cybersecurity and operational risks are the focus areas of the FAIR framework.

  • Committee of Sponsoring Organisation (COSO) framework: It analyses the internal control system of a company. A COSO evaluation focuses more on business-related aspects of an IT department, such as risk management and compliance.

Related: FAQ: What Is An ITIL Certification? (With Types And Benefits)

IT Governance Best Practices

IT governance best practices are necessary for managing and overseeing specific projects, changes and processes. Some of the IT governance best practices are:

  • Identify business priorities. Ensure that the IT investment strategy aligns with the business's strategic priorities. ITG may fail if an organisation does not have a cohesive business strategy.

  • Select the right people. Selecting the right people with the right skills and abilities is vital for business success. Proper planning and implementation are essential for assembling the right team.

  • Monitor IT performance. After selecting a team for IT governance, businesses also require personnel to monitor the effectiveness of the implemented processes. It is essential for the staff to determine the challenges in implementation and propose practical solutions.

  • Define roles and responsibilities. The importance of IT to an enterprise is prompting companies to create governance committees for their IT departments. Defining roles and responsibilities is essential to providing oversight, making informed decisions and ensuring accountability.

Please note that none of the companies, institutions or organisations mentioned in this article are associated with Indeed.

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