Contact us anytime to know more — Abhishek P., Founder & CFO CISIN
IT leadership is a crucial factor. They must adhere to best practices when implementing, maintaining, and securing IT.
This requires clear procedures for mitigating risks, avoiding penalties, identifying underutilization, achieving business goals, or increasing ROI using these technologies.
What Is IT Governance?
IT governance is fundamentally a way to formalize integrating an IT strategy into an organization's business strategies.
ISO/IEC 38500 standard defines IT governance as "a system that directs and controls the use of IT in the present and the future."
IT governance is a way to ensure that IT investments are aligned with business goals and meet the needs of stakeholders.
Implementing formal frameworks helps companies achieve their goals and comply with data privacy laws.
Most companies concentrate on three key processes to ensure IT governance.
- Setting Clear Goals: includes identifying goals by evaluating stakeholder needs and options. It also involves assessing previous performance, determining goals for the future, and evaluating current operating conditions.
- Create Procedures: This involves controlling an organization through decision-making and prioritization. It includes creating policies, strategies, and internal control procedures.
- Tracking Performance: This includes monitoring performance and compliance to agreed-upon objectives and creating compliance audits and performance reports.
IT governance is often under the control of the board. Fast-growing organizations and large companies may delegate governance responsibilities, like audit committees and shareholders.
Why Does IT Governance Matter?
IT governance is the process of evaluating, managing, and monitoring IT management in a company. IT governance is crucial for several reasons.
- Solid data. It gives measurable results in line with business goals and strategies.
- Compliance and security. It ensures compliance with essential legal and regulatory requirements such as the General Data Protection Regulation.
- The analysis of current costs (determined through ROI) and the impact on business.
- Confidence of stakeholders Team members is confident in the safety of their tools.
- Improvement. It evaluates the current technology use, identifies improvement areas, and produces tangible results.
Every organization, irrespective of their industry, should be considering IT governance. Implementing an IT governance plan can take a lot of time.
There are IT governance frameworks which can help with the process. These frameworks were developed by experts to guide organizations in implementing effective IT governance.
Next, we will examine the four most popular IT governance frameworks.
Top IT Governance Frameworks
You may wonder what frameworks are now that you know what IT Governance is and why they matter. Before we get there, let's note that some frameworks (e.g.
COBIT) are more popular than others. There is no "one-size-fits-all" COBIT. It will depend on many factors to determine the proper IT governance framework.
- The location of your company
- The size of your company
- Your company's objectives
Let's now cover the basic principles of the most popular IT Governance Frameworks, such as:
- ISO 38500
- ITIL
- COBIT
- Calder-Moir
ISO 38500
ISO 38500 provides company directors with guidance on how to manage and monitor IT usage. This standard is appropriate for all businesses and aims at promoting practical IT usage across organizations.
This can be achieved by evaluating the policies, planning a strategic plan, and monitoring the compliance and performance of your IT strategy.
ISO 38500 is a global standard that helps stakeholders:
- Align through clearly defining responsibilities in the IT area.
- Plan your IT integration with a focus on ROI.
- Perform a prior analysis and validation of data before investing in IT.
- Establish clear goals by aligning IT practices with business goals.
- Respect Human Behavior by ensuring that IT meets the current and future requirements of all those involved.
ITIL
ITIL is a standard international that defines a framework to manage IT equipment and achieve business goals.
There are five main stages.
- Service Strategy: Align the IT strategy to overall business goals. You can then ensure that the IT decisions made by your organization are measurable.
- Service Design: Make sure IT services are designed to balance cost, functionality and performance. This approach meets business objectives and is fit for purpose and use.
- Service Transition: Manage IT changes quickly, efficiently, and cheaply to get high-value outcomes.
- Service Operation: Ensure that IT services are operated securely and reliably to meet business requirements.
COBIT
COBIT is an IT governance framework that businesses use. It helps companies to tackle challenges like:
- Compliance with regulatory requirements
- Risk management
- Aligning IT strategies with organizational goals
COBIT also offers structured guidance on managing IT processes and resources effectively. This IT governance framework can be a great choice to improve business performance using IT.
Calder-Moir
Calder-Moir has a unique approach, combining several IT governance frameworks to maximize benefits for organizations.
Calder-Moir offers both practitioners and members of the board with practical guidance. It simplifies IT governance and leads to better decision-making.
8 Best Practices For A Holistic It Governance Framework
This section will dive into eight best practices to help you improve your IT governance. We recommend that you:
- Clear IT process goals
- Define stakeholders governance
- Identify & monitoring your IT inventory
- Justify your IT stack
- Cybersecurity and risk management: a focus on cybersecurity
- Create your IT Governance Strategy
- Establish training programs
- Iterate continuously
Establish Clear It Process Goals
It is impossible to start a strategy without defining goals. The first step in defining your IT governance goals is to determine their goals.
- Analyze your business's success metrics by identifying relevant KPIs and defining commercial goals.
- Based on your previous knowledge, analyze which company goals require improved IT use.
- Understanding how IT governance fits into these goals is essential. Your goal is to improve employee performance by evaluating your SaaS software's security and usage policies.
A solid plan is essential. Aligning IT with your business goals is crucial to the long-term success of your IT governance and your company's ROI growth.
Define Stakeholder Governance
You must identify key stakeholders once you've defined your IT governance goals. It's essential to keep everyone informed about the progress and responsibilities.
Each member of the IT team should:
- Understanding how to collaborate to achieve IT governance goals effectively
Finance can assist with IT budgeting. The HR team can measure employee satisfaction with technology and give valuable insight into the impact of IT projects on the company culture.
You can make sure that:
- Your IT projects have been successful
- Information is current and used to make decisions
Rationalize Your It Stack
IT stack rationalization defines your team's efficiency in using their IT stack. You may be surprised by a few things during the rationalization process.
- It is unacceptable to duplicate or use technology that has been duplicated.
- The NDAs for certain technologies do not include any concrete security measures.
The details will depend on the technology and the level of governance required.
Regarding SaaS stacks for companies, it is also essential to consider integration points and costs. In addition, SaaS-specific factors, like unreported applications (also called Shadow IT), need to be considered.
Implementing software management solutions that provide complete visibility over your SaaS applications and allow you to optimize and control subscriptions is essential.
Cybersecurity And Risk Management
Recognizing that IT is always a source of potential risk is crucial. To mitigate these risks, developing and implementing an IT governance strategy is essential.
For example, in the case of SaaS, compliance with regulations is a priority to protect customer, corporate and team data from possible cybersecurity attacks.
It is essential for large companies because a SaaS breach can severely impact them.
We suggest you allocate enough time and resources to manage the risk associated with your IT stack effectively.
- Regular security audits
- Updating software and hardware
- Provide ongoing employee training for good cybersecurity practices
You can prevent costly data breaches and other security incidents by prioritizing risk.
Read More: How Machine Learning Will Transform Your Governance Strategy
Create Your It Governance Process
You can now draft an IT governance process using the insights gained from the previous steps.
To begin writing the policy, you can:
- Introduce the policy by explaining its purpose and scope.
- Explain the specific procedures and the importance of following these for each department.
Make sure to review and update the policy regularly. You can then verify whether it is still in line with the company's objectives and remains effective at controlling ever-changing technology.
Remember that your policy should be written using clear, concise language. It will then be easier to understand for everyone involved, and it can be enforced effectively.
Establish Training Programs
You are an IT professional who understands the dangers of poor IT governance. Everyone should be involved in developing and maintaining these IT governance guidelines.
The team members should know how to use the technologies efficiently and safely. You can:
- Workshops: Workshops are a great way to remind people of the importance of adhering to privacy policies and to teach them different tools.
- Documents: Make sure that employees have a place to go for information.
Continue Iterating
You already know that implementing an effective IT governance policy involves planning several actions across the entire technology cycle.
Included in this are:
- Guideline for the acquisition of technology
- Guideline for Implementation
- Employee Technology Guidelines
Remember that implementing a policy is only the first step. You will need to monitor and adjust your IT governance process continuously.
Often, companies struggle to keep their technology inventory current.
Automating specific tasks, such as SaaS subscriptions, is essential to control all tools fully. This includes:
- Ensure that your confidential data is stored in the correct place
- Shadow IT
- Reduce unnecessary costs caused by duplicate or unused equipment
- Ensure that each employee has access to the appropriate tools
Increase Your Saas Security Compliant With A Saas Management Solutions
This post will cover everything you need to implement an IT governance process within your company. Controlling equipment and assessing its effectiveness and security in relation to business goals is difficult for companies that rely heavily on technology.
It is particularly true for SaaS-based tools. These tools are essential to all aspects of the company and, if they fail, can delay processes and reduce employee productivity.
Steps And Model To Developing A Technology Services Governance Framework
Step 1. Traditional IT Model
In an unstructured organization, a business user sends requests to the IT department. This is done without any support from a structured process.
In a typical scenario, the IT department will process the requests once the requirements have been "frozen". Only at the UAT (user acceptance test) can the IT department intervene. The request-to-delivery cycle has remained critical despite organizational processes and methods improvements.
Below are some of the disadvantages of this method.
From The IT Department To Business Users
The user of the IT department is constantly requesting things. These requests result from the changing emotional urgency the responsible business area feels.
The business department may perceive its interaction with the IT Department as "something we have to do", but this can distract time and energy from the "real work" we should be doing.
"I am a marketer; I should do marketing, not analysis for IT." This complaint is understandable and results in poor user requirements specification and a final solution that does not meet the community's expectations.
IT Department Handling User Requests
Sometimes, the IT project managers do not know the total resources available and commit to requests that will either not be fulfilled or only partially.
This type of behavior damages the relationship between business users and IT. It introduces several inefficiencies to the IT side.
IT is operating in "continuous emergencies", which ultimately takes a toll in terms of resources, quality, and efficiency.
This results in a less-than-optimal use of resources and a considerable period between the business's request and the solution's production.
Step 2 - IT Governance Model Proposed
Among the benefits of applying this model are:
Business initiatives are appropriately managed through a portfolio-management process. This allows for assessing all relevant factors and prioritizing initiatives that fit the organization's strategy.
The IT management is in complete control of every aspect that impacts the IT department, including costs, efficiency, the relevance of initiatives, timeliness etc.
).
Demand Management has a good understanding of business processes. It is, therefore, able to structure requests for IT efficiently.
It is also responsible for monitoring the implementation and release of every solution.
Each competency area (i.e. billing, sales, etc.). Each competence area is focused on their duties and uses standards and tools that have been well-used in the adjacent areas.
Step 3: The New IT Organization Model
To help you understand the application of the model, we have provided a detailed description for each area.
Demand Management: Facilitating The Request-To-Delivery Cycle
It was necessary to create a formal yet simple process to ensure that requests from business users were prioritized, understood, formalized and implemented according to standards that had been mutually agreed upon.
All employees would use this process and follow a well-known and widely shared procedure. Ensuring that the organization and the business users received the highest accuracy, efficiency, and speed was essential.
IT Demand Management processes and organizations have become more relevant in the past few years in all industries.
The rapid changes in the IT market and the constant development of new products and services, as well as the short time-to-market requests from the business community, are the main reasons for this.
Step 4. Functional Demand Management
By understanding them better, the step validates user requests while still considering the "bigger picture". The people who work in this area are familiar with their internal clients and can be facilitators and consultants on both sides.
This organization allows each business unit to interact with its Demand Management office. Sales Demand Management, for example, will handle the request if a price modification is needed. The Sales Demand Management team works with billing development (the people who are most affected) to determine the best solution.
Sales Demand Management tracks the business request from the requirements phase to the production implementation and validates the expected benefits.
Program Management Office - Monitoring For Execution
Here, the goal was to control and monitor the most critical initiatives that management wanted to initiate. The Program Management Office put in place tools and processes that enabled the organization to monitor and undertake all initiatives within the IT Strategic Program.
The "value creation" blocks are represented by Step 5. These "building blocks" are set up and fine-tuned to ensure that all projects are well executed and contribute significantly to the organization's critical objectives.
Step 5: Value Creation Building Blocks
Having a centralized PMO to ensure all project managers are familiar with the same project management processes and tools is a good idea.
The PMO provides an overview of all project statuses and reports on improvements in project delivery over time. The PMO helps project teams communicate using standard processes, deliverables, and terminology.
Development
The Development area's objectives are to implement new software solutions into the company's development pipeline, maintain existing solutions to remain effective and improve their support for business processes.
They also support Demand Management while evaluating business requests by providing suggestions for feasibility studies and evaluating technical options to address issues and business needs better. The Development department is also responsible for documenting and updating the detailed design of solutions to be implemented.
Operation
The Operations department ensures that IT operations are running smoothly and all necessary measures have been taken to prevent service disruptions.
The Operations department will ensure that the service is delivered competitively compared to industry standards. The Operations department is responsible for:
Step 6: IT Value Framework
This framework comprises three layers covering all aspects relevant to an efficient, well-structured department.
Strategic Planning: Make decisions about IT investment, strategy and planning.
IT Business Management: Manage the IT business unit and ensure leadership and coordination within and outside the IT department.
IT Governance: Maximize the return on IT investment in the present as well as the future
Guidelines for Architectural Design: Develop a flexible technology framework to support innovation and systems
Management of Innovation: Develop new products, services and business models to support profitable growth.
Sourcing Management: Define a sourcing strategy that involves suppliers and makes them partners to contribute higher value.
Programme Management: Ensure that IT projects, programs and services are available to clients within the agreed time frame and in an acceptable manner.
Delivery Management: Optimize the development and release of IT products and Services requested by clients.
Management of Human Resources: Make the right resource available at the right time. Handle the process of evaluation and professional development.
Request management: Ensure that the internal client gets the maximum benefit from the IT unit, and IT can satisfy requests in the best possible way for the whole organization.
Operational Management: Administer the technology environment effectively and with an acceptable level of risk.
Conclusion:
A well-structured governance framework for technology services is essential to organizations that want to maximize the potential of technology while minimizing risks and ensuring compliance.
Businesses can create a solid foundation to manage technology services by aligning their technology initiatives with their business strategy, defining roles, creating efficient decision-making procedures, and focusing on risk management and performance measurements. By embracing the power of governance frameworks, your organization will be better able to navigate the complexity of the digital age.
