In today’s world, governance in IT can mean various things and refer to different IT frameworks. In many cases, IT governance is often confused with implementing standards to report results and compliance. As per the Governance Institute,
“IT governance is the responsibility of the board of directors and executives, and it consists of leadership, organizational structures, and processes that make sure that the organization’s IT sustains and extends the strategies and objectives of the organization.”
Why is IT Governance Important?
The importance of governance is that it achieves the desired behavior and outcomes. The relationship between effective value creation of IT investments and IT governance has long been recognized, and it is cited as the primary reason for achieving excellence in IT management. It focuses on cost and enables effective communication between customers and providers by establishing the joint accountability of IT investments. The enforcement of the governance process is articulated by IT portfolio management which is used by IT leaders for managing the IT investments, projects and resources in order to review the opportunities. Also, it is used for reducing redundancy across the IT environment and promotes cost savings. Governance offers a formula for success and enables leaders to be active in the strategic management of IT and to ensure that the following essential elements are in place.
Alignment and Responsiveness
Governance and IT portfolio management works hand in hand to align IT investments with the organization’s objectives, enables managers to improve responsiveness towards challenges and manage their current and future IT investments. Also, it provides transparency of IT investments and ensures that tax money is spent following the organization’s mission.
Objective Decision Making
It enables leaders to actively commit to improving the management and control of IT activities in the company.
Proactive risk management shows that IT managers and leaders are aware of the risk associated with the IT initiatives and thus, they provide the basis for implementing risk mitigation strategies.
Execution and Enforcement
Governance provides managers with the framework that helps them to manage all the IT initiatives and demands, through a single point where they’re prioritized and fulfilled. This helps in standardizing technology platforms and enables managers to make informed decisions about IT initiatives.
IT governance is the process in which decisions are made around IT investments and projects of the organization; as it cannot exist in isolation. By rolling up all investments and projects into the company’s IT portfolio, a complete and comprehensive view of the entire IT portfolio emerges. This allows leaders to make better strategic decisions and proactively manage and evaluate future investment as a team.