Information technology plays a crucial role in today’s organizations, and it’s becoming more important than ever to ensure that the significant investments a company makes in IT line up with its overall business objectives.
This alignment is the main function of IT governance, and many businesses want to implement an effective IT governance program. But with many frameworks to choose from and potential pitfalls to encounter, it can be hard to know where to begin.
Today, we’ll discuss seven ideas to help you ensure effective IT governance best practices for your organization. We’ll talk about the benefits of IT governance, IT governance objectives, what is IT governance framework and how to implement it without too many roadblocks, why you should use software and automation to your advantage, and more.
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1. Familiarize yourself with the concept of IT governance and its benefits.
To implement effective IT governance principles, you first need to have a clear understanding of what IT governance is and how it can benefit your organization.
What Is IT Governance?
Gartner explains that the definition of IT governance (sometimes referred to as ITG) is “the processes that ensure the effective and efficient use of IT in enabling an organization to achieve its goals.”
IT governance is a vital component of the larger umbrella of corporate governance, but it centers on IT operations. It uses a formal framework to make sure that organizations’ IT-related decisions, systems, and resources align with their overall business objectives. When IT strategy perfectly aligns with business strategy, benefits abound.
For instance, IT governance enables companies to maximize the value their IT departments bring to the table, both internally and externally. Managing IT investments, operations, costs, and risks through an official IT governance program helps the department and company as a whole operate at peak efficiency.
When done well, IT governance involves various structures, policies, and procedures like project management, compliance, IT decision-making, and risk management. It takes the needs and interests of stakeholders and staff into account as well.
Because IT governance creates a structured approach to the overall management of information technology within an organization, it tends to improve companies’ overall performance by producing measurable results and guaranteeing that IT consistently adds value.
A 2022 Statista report stated that as of 2017, 21.4% of mid-market companies had mature IT governance programs with established processes, and 46.2% were in the process of building and developing IT governance processes and structures.
What Types of Organizations Need IT Governance?
Whether your organization is public or private, large or small, it can benefit from IT governance. All organizations must ensure their IT operations fall in line with their overall business goals, and IT governance provides a framework to do so.
IT governance also maximizes the value and efficiency of IT systems and resources, which is advantageous to all businesses.
However, IT governance doesn’t always look the same. It can easily be customized to fit your needs and the resources you have available.
For example, small to midsize businesses often employ just a few essential IT governance methods. Meanwhile, large enterprises usually have the resources and budget to implement a fully-developed IT governance program. The complexity of an organization’s IT governance framework often depends on the compliance and regulatory requirements it’s subjected to.
In addition, organizations in certain industries, such as tech and finance, typically need robust IT governance programs because they deal with large volumes of sensitive data.
Roles and Objectives of IT Governance
We’ve touched on a few of IT governance’s main roles, but let’s delve a bit deeper and look into some other common objectives:
- Align IT decisions with business goals
- Mitigate risks, liabilities, and issues stemming from IT
- Generate business value and guarantee value to investors and stakeholders
- Measure and oversee IT manager and team performance
- Support IT investments that will achieve tangible results
- Monitor the utilization of IT resources to ensure they’re used to their full potential
- Optimize the ROI of IT resources, such as equipment and services
- Ensure compliance with various internal and external regulations
- Maximize operational efficiency
Generally, the IT governance team makes up part of the overall leadership team, and IT governance reports are sent directly to senior leadership, as it can ensure that all IT decisions are moving the organization toward its goals.
Benefits of IT Governance
IT governance comes with many advantages, including the following:
Alignment of IT investments with business priorities: When IT spending is aligned with a business’s overall objectives, companies can make the most of their IT resources, increase cost savings, and reduce redundancies.
Streamlined IT operations: IT governance involves implementing a clear framework that standardizes various processes, eliminating bottlenecks and other challenges impacting efficiency.
Unbiased IT decision-making: With an IT governance framework in place, all IT investments are guaranteed to add value and bring the organization closer to reaching its goals.
Guaranteed compliance: IT governance puts policies in place that ensure employees maintain compliance with governmental and internal regulations. This cuts back on risk and limits the organization’s liability.
Objective measurement of IT performance: Most IT governance frameworks provide full visibility that enables companies to measure and analyze the IT department’s performance. This way, it’s simple to see how the department is doing and where it can improve. IT governance can also identify the ways in which the IT department is benefiting the entire business.
Increased organizational trust: Stakeholders tend to have more trust in organizations with an IT governance program in place, as these organizations maintain compliance, align their IT investments with their business objectives, and make informed decisions regarding IT.
Ensured content quality: Any material or content produced by the organization will meet company quality standards per the IT governance framework.
Achievement of desired outcomes for customers and stakeholders: IT governance ensures that procurement is focused on returns on resource management, productivity, or customer satisfaction, all of which can contribute to the achievement of desired outcomes for stakeholders and customers.
Easier buy-in from customers, partners, and stakeholders: When companies take the initiative and implement an IT governance program, it inspires confidence and assures customers, partners, and stakeholders that the organization is serious about what it’s doing.
2. Choose an effective IT governance framework for your organization.
An IT governance framework serves as a guide for an organization to follow as it sets up an IT management system. There are many frameworks already in existence, so it’s not necessary to create your own. Instead, you can use one or multiple frameworks that align with your organization’s goals and customize them as needed. Below is an overview of several of the most common IT governance frameworks.
ITIL (Information Technology Infrastructure Library)
ITIL is a globally recognized framework, and it’s considered the standard for all other IT governance frameworks. It includes five best practices for management to ensure that IT operations, service strategy, transition, design, and service improvement support core business processes.
COBIT (Control Objectives for Information and Related Technologies)
ISACA (The Information Systems Audit and Control Association) created the COBIT framework, which is generally the most popular option for organizations because it was designed with enterprise IT in mind. COBIT 2019, the latest version of this framework, is particularly focused on mitigating and managing risks, but remains customizable and flexible. It’s also quite detailed, referencing 37 IT processes and discussing inputs, outputs, objectives, and performance metrics for each one.
ISO/IEC 20000
This framework offers guidance on many of the best IT practices to help businesses make progress toward their goals. It measures the success of ITIL implementations.
ISO/IEC 38500:2015
ISO/IEC 38500:2015 focuses on evaluating, directing, and monitoring IT systems with an emphasis on the ethical and legal obligations associated with IT.
Balanced Scorecard
The balanced scorecard framework considers multiple organizational elements, including finances, internal processes, the customer’s perspective, and innovation.
COSO (Committee of Sponsoring Organizations of the Treadway Commission)
This framework features more of a general approach, rather than focusing only on IT operations. It integrates business aspects like risk management and fraud prevention. COSO Framework mainly focuses on compliance, operations, and reporting for effective internal control.
CMMI (Capability Maturity Model Integration)
CMMI’s main focus is performance improvement, with overall performance, quality, and profitability all playing roles. It uses a scale of one through five to assess the maturity of organizations, with businesses at levels four and five thought to be highly mature. At these levels, organizations are quite flexible and continually evolve to meet customer and stakeholder needs.
FAIR (Factor Analysis of Information Risk)
The main goal of the FAIR framework is to identify and quantify risks that IT departments may face, especially operational and cybersecurity risks. By focusing on these risks, FAIR helps organizations make better, more informed business decisions.
Choosing an IT Governance Framework
To choose the best IT governance framework for your organization, consider your most important IT goals, as different frameworks have different focuses that can address various issues.
For instance, FAIR, COSO, and COBIT are viable options if your goal is to manage risk. Meanwhile, CMMI is a great choice if your priority is improving performance.
Think about your corporate culture and stakeholders’ priorities as well; certain frameworks may be a better fit than others. Keep in mind that you can use more than one framework. ITIL, especially, can be easily integrated with other IT governance frameworks.
Most frameworks include implementation guides that can help you phase them into your organization smoothly.
3. Ensure smooth IT governance implementation.
Once you’ve chosen an IT governance framework, it’s time to implement it. Here are a few tips to help things proceed without too many complications.
Employ Change Management Principles
Good change management principles are key to the smooth implementation of a new IT governance program.
Any time there are major changes in the workplace, it’s crucial to clearly communicate with all employees to make sure they understand the change at hand (in this case, the IT governance framework), its purpose, how it will benefit the company, and how it will affect their specific job and day-to-day responsibilities.
Be sure to keep lines of communication open, encouraging all those involved to ask any questions they may have and providing regular updates and progress reports on the project.
Hold Training Sessions
We also recommend holding comprehensive training sessions, particularly for the IT department, so they can be fully informed and prepared for the implementation of the new IT governance framework. The associated requirements, goals, and benefits, as well as any new policies and procedures, should be thoroughly explained.
Get Executive Buy-In
It’s vital to ensure you have executive buy-in regarding the IT governance program. Consider which business representatives and key stakeholders will play the most significant roles in the implementation process.
Measure and Monitor Progress
Another important part of ensuring smooth implementation is measuring and monitoring its progress to make sure that it doesn’t go off track–and stepping in to rectify things if they do begin to go off the rails. Track and analyze the framework’s effectiveness, quickly identify any gaps or other issues, and address them as needed.
Bring In Experts
It’s smart to work with IT governance experts and consultants, particularly if you’re implementing a new IT governance framework at a large enterprise. Small and midsize businesses that are only implementing a few basic IT governance principles may not need expert guidance as they’ll likely be handling a smaller-scale, simpler program.
4. Prioritize the involvement of the IT department.
As the IT department is responsible for the IT system’s management and day-to-day operations, it will have a critical role in keeping IT governance on track.
Not only does the IT department have considerable knowledge of the business’s IT systems and processes, but IT staff are also familiar with mitigating possible vulnerabilities and risks to the organization’s information technology assets.
Clearly, the IT department’s wealth of knowledge enables staff members to offer valuable input during IT governance implementation and beyond.
In general, the IT department needs to make sure the organization’s IT infrastructure and systems are managed effectively, that investments align with business objectives, and that the IT systems remain secure.
For the IT staff, governance might just seem like extra work, but it can be beneficial. When IT staff keep the department aligned with the organization’s overarching objectives, it’s easy for them to show the value they bring to the company.
There are several ways in which your organization can encourage the IT department to focus on IT governance. The first is providing plenty of training on the IT governance framework, new standards, policies, and procedures, and best practices. If the IT staff don’t have a good understanding of IT governance in general and how it can specifically be advantageous to your organization, then it’ll be hard for them to do their due diligence when it comes to IT governance.
It’s also best to set clear expectations and explain that IT governance is a priority. Put straightforward guidelines and policies in place that outline your organization’s IT governance framework.
Be sure to include the IT department in decision-making as well. You’ll get better buy-in from the IT staff when it’s evident to them that their opinions matter and their input is valued.
Another way to get the IT staff more involved is to incentivize them with promotions and bonuses for achieving various IT governance goals.
5. Use software and automation to simplify IT governance.
Many software and automation options can make IT governance simpler.
For example, various types of software can automate the monitoring and reporting processes. Automating these processes, rather than monitoring and creating reports manually, improves data accuracy and makes it easier to pick up on and handle problems in real time.
Software can also be used to automate audits, approvals, and documentation, which streamlines workflows, reduces errors, and increases efficiency.
You can create a data center for all IT governance information using software as well. This ensures the data will be easy to access and analyze, and it can help with compliance and decision-making.
Finally, you can integrate your IT governance software with many of your other IT systems to integrate IT governance into all other aspects of IT operations within your organization.
Embracing automation and using software comes with plenty of benefits, most notably increased efficiency and visibility, as well as reduced risk and improved compliance.
6. Monitor your organization’s performance with KPIs.
Be sure to establish procurement key performance indicators or KPIs to monitor the effectiveness of your organization’s IT operations and investments. You can then use these KPIs to continuously improve your IT governance. This is an excellent way to monitor and measure your overall IT governance performance.
Here are several KPIs to consider:
IT Systems Performance
- System uptime
- Availability
- Response time
Risk Management
- Number of security incidents/data breaches
- Amount of data compromised or lost
- Time taken to identify and respond to incidents/breaches
Compliance
- Percentage of audits passed
- Number of noncompliance incidents
- Number of policy violations identified and resolved
Cost Savings
- Reduction in IT infrastructure costs
- Reduction in regulatory and legal fines
When your organization tracks KPIs, it’s easy to see where the IT governance program is doing well and where it needs to be improved. Monitoring performance with various metrics enables data-driven decisions that bring your business closer to its goals.
7. Be aware of common IT governance mistakes.
Below, find several common pitfalls organizations run into with IT governance, as well as how to avoid them.
Failing to keep up with tech trends and standards: When you’re not staying up-to-date with changes in the world of technology, risks abound, and IT investments may lose alignment with the organization’s overall strategy and goals. To avoid this mistake, put regular effort into learning about current trends and recent changes in the industry.
Implementing an overly complicated framework: Unnecessary complexity can make it hard to get the results you want out of your IT governance framework. Instead, keep it as simple as possible so that it remains user-friendly, which can increase employee buy-in and the framework’s overall effectiveness.
Poor communication: Any major change in an organization is sure to fall short of expectations if it’s not properly communicated to all who will be affected by it. Not only should employees be educated about the new IT governance framework initially, but you should also communicate with everyone regularly regarding the program’s goals, progress, and impact.
Lack of support from senior leadership: Without executive support, it’s unlikely the IT governance program will receive the attention and resources it needs to thrive. Be sure to get buy-in from all necessary stakeholders ahead of time and determine how the IT governance program will be prioritized.
Loss of alignment with business priorities: Considering the main objective of IT governance is to maintain alignment with business objectives and strategies, losing alignment can have undesirable effects. Although the natural inclination is often to avoid changing IT governance once it’s in place, it’s crucial to update it as needed to keep it in line with overall business priorities.
Overlooking threats from shadow IT: Organizations often use their IT governance frameworks to focus on external threats, but the truth is that internal threats like shadow IT can lead to major financial consequences and reputational damage. Get serious about shadow IT by setting up your framework to manage both internal and external risks.
IT Governance Best Practices: Main Takeaways
- IT governance refers to processes that ensure IT is used efficiently and effectively to move an organization toward its goals.
- All organizations can benefit from IT governance principles.
- IT governance aligns IT investments with business priorities, streamlines IT operations, contributes to unbiased decision-making, guarantees compliance, increases organizational trust, and ensures content quality.
- Common IT governance frameworks include ITIL, COBIT, ISO/IEC 20000, ISO/IEC 38500:2015, Balanced Scorecard, COSO, CMMI, and FAIR.
- For the smooth implementation of a new IT governance framework, use change management principles, hold training sessions, get executive buy-in, measure and monitor progress, and bring in experts if needed.
- Be sure to prioritize the involvement of the IT department during the implementation stage of the IT governance program and beyond.
- Use software and automation to simplify various IT governance processes.
- Establish KPIs to monitor your organization’s IT governance performance.
- Steer clear of common IT governance mistakes, like failing to keep up with tech trends and standards, implementing an overly complicated framework, not communicating effectively, lacking support from senior leadership, losing alignment with business priorities, and overlooking internal threats like shadow IT.
TPG’s IT Experts Are Here to Help
At Technology Procurement Group, we have decades of experience in the industry, and we want to use our knowledge to your advantage. Just as IT governance best practices work to help you achieve your business objectives, we’re here to guide you to meet your goals (and enjoy cost savings).
We offer a variety of services, such as IT procurement services, RFP management services, telecom procurement strategy consulting, telecom contract negotiation, and both wireless expense management, and wireless expense reduction services.
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