Information technology (IT) is a standard component of businesses in virtually every sector, largely due to the increasing importance of data analysis. It plays a pivotal role in remaining competitive, but it isn’t enough to simply have the latest applications and equipment.
Winning the digital arms race also requires organizations to develop a road map for managing their IT infrastructure, which is where IT governance (ITG) comes into play.
The IT Guide to Workflow Management
Build the best version of any workflow for any team.
IT governance (ITG) definition
ITG is the process of ensuring that an organization uses IT effectively and efficiently to achieve its goals. It includes the evaluation, prioritization, and funding of IT investments, along with their implementation in realizing specific benefits. This process helps with making decisions and maintaining oversight of IT resources, including regulatory compliance.
Diverse approaches to ITG
ITG is essential for sustainable success in modern business, although many approaches exist for its implementation. These possibilities have the potential for transforming a business, aligning IT strategy with an organization’s business goals, and optimizing its resource management.
How ITG transforms business
ITG extends an organization’s mission by directing IT processes so that it can leverage opportunities and maximize its return on investment (ROI) in IT. Modern enterprises typically combine technical and non-technical capabilities to establish IT priorities, requiring a close relationship between these roles. ITG has the potential to greatly impact IT performance, stakeholder involvement, and training.
Aligning IT strategy with business goals
Effective ITG ensures that IT investments and decisions directly contribute to the realization of an organization’s strategic goals. This alignment is essential to avoid wasting resources on projects that don’t provide a quantifiable business value.
Optimizing resource management for efficiency and innovation
IT resources like hardware, software, and personnel are often some of the largest investments for businesses, so ITG should ensure they are allocated efficiently. The lack of a clear strategy can cause these organizations to overspend on resources or underutilize those assets, either of which results in financial inefficiency.
ITG frameworks
ITG frameworks help organizations assess the functioning of their IT departments, including the management of their key performance indicators (KPIs) and the ROI that IT investments are providing for the company. Many frameworks exist, each with its own origin, core principles, and use cases. Factors to consider when selecting an ITG framework include corporate culture and stakeholder buy-in.
COBIT
Control Objectives for Information and Related Technology is an internationally recognized ITG framework that helps organizations align their IT strategy with their business goals, in addition to risk management and regulatory compliance. The latest iteration of this framework is COBIT 2019, which was released in November 2018. It builds on the previous iteration, COBIT 5, by introducing developments that affect enterprise IT.
COBIT is based on the following principles for effective governance of enterprise IT:
- Meeting Stakeholder Needs
- Covering the Enterprise End-to-End
- Applying a Single Integrated Framework
- Enabling a Holistic Approach
- Separating Governance from Management
These five principles are built on the following seven enablers:
- Processes
- Information
- Organizational structures
- Meeting stakeholder needs
- Culture, ethics and behavior
- Enabling a holistic approach
- People, skills and competencies
- People, policies and frameworks
- Covering the enterprise end to end
- Applying a single integrated framework
- Services, infrastructure and applications
- Separating governance from management
The combination of principles and enablers allows COBIT to realize the value of its IT investments by aligning them with business objectives. Organizations primarily use COBIT for risk management by improving and maintaining the quality of information used to support business decisions. It also helps them use IT more effectively in achieving business goals and promoting operational excellence. Additional uses of COBIT include helping with regulatory compliance.
Implementing an ITG framework often uses an integrated approach that combines parts from multiple standards and frameworks to provide a desired result. COBIT has integration at the heart of its design, as it aligns with other frameworks like Information Technology Infrastructure Library (ITIL), ISO 20000, and ISO 27001.
ITIL
ITIL is a framework for IT service management (ITSM) that’s widely adopted throughout the world. It’s used by many large corporations, like British Airways, Disney, Hewlett Packard, Microsoft, NASAm and Shell. Government departments like the UK’s Ministry of Defense and National Health Service also use ITIL as their ITG framework.
ITIL includes a set of detailed practices for ITSM that focus on the alignment of IT services with business needs. ITIL also describes checklists, procedures, processes, and tasks that are specific to any particular organization, yet can still be integrated with organizational strategies to help deliver value and maintain minimum competency.
The latest iteration is ITIL 4, which was released in February 2019. It’s supported by ISO/IEC 20000-1:2018, an international standard for achieving independent ITSM certification. New features of ITIL 4 include the introduction of an end-to-end digital operating model to help IT teams create, deliver, and operate IT products and services that align with their organization’s business strategy.
ITIL uses a service value system (SVS) that’s supported by the following seven guiding principles:
- Focus on value.
- Start where you are.
- Optimize and automate.
- Think and work holistically.
- Keep it simple and practical.
- Collaborate and promote visibility.
- Progress iteratively with feedback.
These principles evolved from the nine guiding principles of ITIL 3, which in turn are based on IT methodologies like Agile, DevOps, and Lean. Their goal is to support organizational actions and decisions that meet stakeholders’ needs. ITIL also helps organizations follow best practices for adopting ITSM for their business needs, maturity and other circumstances specific to each organization.
COSO
The Committee of Sponsoring Organizations of the Treadway Commission (COSO) develops guidelines for helping organizations evaluate their internal controls, manage risk, and deter fraud. It initially published the Internal Control – Integrated Framework in 1992, which was released again in 2013. It’s organized into five components that are subdivided according to 17 principles. Each of these components must be functional and integrated together for COSO to work effectively in achieving an organization’s goals.
COSO focuses less on IT than other ITG frameworks, as it concentrates more on business issues like fraud deterrence and enterprise risk management (ERM). Businesses in the U.S. commonly use this framework to design, implement, and conduct systems that provide internal controls over financial reporting.
CMMI
The Software Engineering Institute initially released the Capability Maturity Model Integration (CMMI) framework in 2003. The latest release is version 3, which was released in 2023. The primary goal of CMMI is to assess an organization’s IT performance, quality and maturity level based on a scale of 1 to 5. This approach allows users to make objective, qualitative measurements of risk.
FAIR
Factor Analysis of Information Risk is a model of risk assessment initially released in 2013. It focuses on cybersecurity and operational risk, with the goal of making more informed decisions in these areas. FAIR is more recent than other ITG frameworks, but it’s already gaining a lot of traction among Fortune 500 companies.
Enhancing performance management through IT governance
ITG enhances performance management by optimizing the effectiveness and efficiency of an organization’s operations, generally through the use of KPIs. Organizations establish and monitor KPIs to assess the performance of IT processes and services, providing a data-driven approach that aids in identifying areas for improvement. ITG should foster a culture of continuous improvement in IT by performing assessments, benchmarking, and feedback loops on a regular basis, thus enhancing IT capabilities over time.
Navigating risk management in an IT context
Risk management is another fundamental aspect of ITG. This aspect is becoming increasingly important to the rising frequency and complexity of IT threats like data breaches and compliance failures.
The ability to help organizations understand and prioritize risks is also essential in ITG for mitigating risks through the development of controls, plans, and policies.
Implementing ITG in your organization
Implementing an effective ITG strategy requires careful planning and execution, beginning with the establishment of clear objectives. Stakeholder buy-in is also a key component for ensuring this strategy aligns with organizational business goals. Many ITG frameworks are available, making it crucial to select one that suits an organization’s industry and size.
Pipefy is an intuitive, no-code application that enables businesses to implement effective, cost-efficient business process management. It also helps teams meet their ITG requirements with built-in security features like permission management, single sign-on (SSO), two-factor authentication (2FA), audit logs and business rules. These features increase your organization’s visibility and control over IT processes, allowing it to protect data and maintain regulatory compliance.
