Information Technology Governance
IT governance is a formal framework that provides a structure for organisations to ensure that IT investments support business objectives. The need for formal corporate and IT governance practices across organisations was fueled by the enactment of laws and regulations.
Essentially, IT governance provides a structure for aligning IT strategy with business strategy. By following a formal framework, organisations can produce measurable results toward achieving their strategies and goals. A formal program also takes stakeholders' interests into account, as well as the needs of staff and the processes they follow. In the big picture, IT governance is an integral part of overall enterprise governance.
Why do organisations implement IT governance infrastructures?
Organisations today are subject to many regulations governing the protection of confidential information, financial accountability, data retention and disaster recovery, among others. They're also under pressure from shareholders, stakeholders and customers.
To ensure they meet internal and external requirements, many organisations implement a formal IT governance program that provides a framework of best practices and controls.
Both public- and private-sector organisations need a way to ensure that their IT functions support business strategies and objectives. And a formal IT governance program should be on the radar of any organisation in any industry that needs to comply with regulations related to financial and technological accountability. However, implementing a comprehensive IT governance program requires a lot of time and effort. Where very small entities might practice only essential IT governance methods, the goal of larger and more regulated organisations should be a full-fledged IT governance program.
How do you implement an IT governance program?
The easiest way is to start with a framework that's been created by industry experts and used by many organisations. Many frameworks include implementation guides to help organisations phase in an IT governance program with fewer speedbumps.
How does it Benefit & Why Worthwhile
This is an example of outcomes achieved by one of our clients after successfully delivering this service.
X-Airways company flies to more than 100 destinations in over 60 countries and operates nearly 700 flights per week across six continents. It was launched in 1985 with two leased aircraft from a rudimentary airport. Its phenomenal growth is reflected in the 130-plus aircraft in its rapidly expanding fleet – a mix of the latest wide-body Airbus and Boeing. In addition, it’s a major player in the air freight industry, carrying 1.3 million tonnes of cargo in 2008, which amounted to almost 20% of the airline’s $1.37 billion net profit that year.
The IT governance department is responsible for the "Quality at Source" objective, including process management using CMMI, ITIL and COBIT frameworks, IT performance measurement, portfolio management and IT Strategy, in addition to managing the IT investment portfolio for the company.
Actions Taken: Hadramout Consulting Home (HCH) adviced IT governance department to do the following:
- The initial phase of the implementation project was the formation of a project team consisting of five members from the security, operations, business consulting, and application development and support units in the IT department.
- The implementation project started by identifying the tangible and intangible IT assets and their owners.
- After the identification of IT assets and owners, the control owners and the responsible employees of IT processes included in the project were determined.
- Then, the gap analysis was performed by documenting the existing controls and control deficiencies.
- In the future, the IT Department will use COBIT to measure the performance of IT processes, as performance measurement is vital for effective IT governance.
- The IT department’s goal is to develop a process performance model, enabling the organisation to keep track of performance of IT goals based on how they deliver and what they need to deliver.
- Key performance indicators (KPIs) and key goal indicators (KGIs) will be decided for each IT process.
- With the cooperation of IT and business senior management, standard performance targets and metrics of IT processes will be determined.
- In the future, the IT Department will use COBIT to measure the performance of IT processes, as performance measurement is vital for effective IT governance. The IT department’s goal is to develop a process performance model, enabling the organisation to keep track of performance of IT goals based on how they deliver and what they need to deliver. Key performance indicators (KPIs) and key goal indicators (KGIs) will be decided for each IT process. With the cooperation of IT and business senior management, standard performance targets and metrics of IT processes will be determined.
- Despite the fact that corporations are beginning to experience success with implementing IT governance mechanisms to better manage their IT resources, individual governance mechanisms cannot alone promise the successful implementation and execution of IT governance policies and procedures. Companies must be able to better understand the complex playing field of their competitive environment and be able to put together a reliable set of governance techniques that are simple, are easily shared and implemented, and that engage managers who make key decisions for the company.
- The IT department and IT governance philosophies can no longer be a "black box," with board-level executives deferring to IT leadership for critical organisational policy decisions. With its critical contribution to corporate strategy, and the risk an organisation faces by its mismanagement, IT governance can no longer be ignored by senior executives. Many organisations these days are struggling with getting IT governance implemented. The results of this research has provided a better guidance and explanation on which processes, structures, and relational mechanisms they can leverage to support a better alignment in their organisations.