In practice, governance needs to be a complementary part of strategic management. IT Governance discipline should include not only IT-driven business solutions but also IT PMO, IT Policies, IT Processes, IT Change Management, etc. It all depends upon the complexity, size, and maturity of the business. The formal IT governance can be established via the logic steps and cover the full spectrum of business practices.
Business Management- Projects, Innovation, Demand: IT is in a unique position to oversee the business, and it possesses the widest breadth of view of the company including projects, innovation, and demand. It’s a natural evolution as most business initiatives today involve IT. IT governance enforcement starts with understanding business as a dynamic complex and adaptive system. Identify IT pain points which perhaps have surfaced (Delayed Projects, Cost Overrun, No Innovation, No business involvement, Rogue IT – Every organization will have some quandaries with IT).
Another area to practice IT governance might be the conception, development, and deployment of solutions and exploration of business innovation. Innovation usually happens at the intersection of people and technology, a robust IT governance program can be the medium through which innovation is fostered. Proper IT Governance will have incorporated a process for change and innovation.
IT Operations - Service Catalog, SLA: IT governance is primarily operational with the focus on directing how IT enables business operations through people, process, service catalog, SLAs, reporting, etc, gaining an understanding of the operating style of the organization; knowing what view each of the CXO roles has on organization priorities and the role they consider IT has in the organization.
IT leaders should assess objectively and give a clear idea about the maturity of IT function and they need to communicate well and dedicate themselves to planning and execution. The IT dollars are enterprise resources and are finite, and they must be leveraged to the benefit of the enterprise. There is no reason the executive team shouldn't be completely aware of where and how IT assets are being deployed. The purpose of governance is to facilitate all business units in competing for the dollars based on the benefit to the enterprise.
Sourcing, Vendor Management, and Control: IT governance enforcement makes complex things less complex. IT service/solution delivery, cost optimization, availability of talents, scalability of operations, 24x7 global operations can be effectively delivered through the on-demand model, or other sourcing solutions. There needs to be a good mix of sourcing solutions, vendor management, and control so that employees, customers, and IT management can safely meet together over short path decisions.
For example, moving to a SaaS services model is not the panacea for IT management issues, and in many cases brings more challenges with less control. Effective service providers typically have a wide range of exposure and are not tied to any one network, solution, or technology, they gain insight from working on hundreds of environments across many verticals. An effective IT governance discipline helps to standardize and make a better choice to improve sourcing and vendor management maturity.
Organization Structure, Learning, Leadership Development: IT governance evolves the leadership and organizational structures and processes that ensure the IT organization sustains and extends the enterprise strategies and objectives. Governance principles need to be assessed, evaluated, and modified to address the latest technology trend as well as enforce IT manageability via collaborating their geographically dispersed structures and talents. You need some way of growing talent that understands your particular business, and comfort with technology to help envision and architect what the future of the business should look like.
Fundamentally, governance needs to focus on business effectiveness - doing the right thing. Organizational leaders need to check: If you redesigned the IT department, what factors drove the restructuring? How is the structure of your IT department aligned with the organization? Does IT drive team building and organizational learning? Do you want to be in a constant learning mode? Design an IT structure to optimize business processes, improve productivity, encourage employees to be learning agile, and embrace digital mindsets, methodologies, and practices.
Data, Process, Architecture: Data is an asset that needs to be protected and used properly. Data governance is critical especially as we move to the exponential digital era with a sea of data. You can correctly see data management as being the tasks and responsibilities delegated to management as part of the governing body’s governance activities. It's important to leverage ITA as a balanced tool to light up the full cycles of information management and emerging properties (trends, opportunities) to create the business synergy.
Processes underpin business competency. business process management needs to become more dynamic and people-centric. The process effectiveness and efficiency achieved through standardization and optimization directly impact strategy management success. Thus, strong business process governance has a better chance to deliver premium performance results. IT leaders and architects should work both within IT and on IT, across the business scope and seek ways to deal with enterprise complexity and manage dynamic processes smoothly.
Risk Management and Compliance – Information Security, Risk, and Compliance: The governance is an organizational capability for risk mitigation, that’s why it has usually been put into the overarching GRC (Governance, Risk, Compliance) umbrella. GRC is not a single process, but a collection of processes with other governance mechanisms, such as roles and technologies. There are potentially multiple joint business/IT processes that could define the scope of IT Governance, Risk, and Compliance.
IT governance has costs associated with it and partly it is to do with the way a business perceives risk, as opposed to focusing on the benefits that a well-governed business can bring to its strategic stance. IT departments that have their own house in order and have absorbed compliance and operational risk management can move on to greater, more strategic business needs.
A simple definition of IT governance is how to manage IT in different aspects. There’s no fundamental difference between the disciplines of financial control/planning/etc and architectural perspective. Both provide views, methods, and rules that address the different aspects of governance. One helps you to address the financial aspects of business, and other technological aspects. Each organization is different; hence, IT governance should be looked at more holistically in an enterprise, and follow the logical steps to improve organizational effectiveness and maturity.
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