IT Governance is about how the organization makes and enforces IT decisions

by Ashu Bhatia – 

Time and again for almost any strategic IT initiative, I run into this issue of IT Governance either missing or not being clear enough within the organization. Whether one is doing IT spend analyses, IT value targeting, asset rationalization, or strategic sourcing, the value of good IT governance cannot be over-emphasized. And even when it comes to IT operations and IT Service Delivery, Solutions Implementation, and resource management, IT Governance is an underlying theme that needs its focus.

Makes you think. What exactly is IT governance and how can you do it well within your firm? Well, in a nutshell, IT Governance is about how the organization makes and enforces IT decisions. The key IT Governance responsibilities are:

• Maximize constituent value from IT investments
• Minimize and manage IT-related risks

It is an integral part of the overall enterprise governance. There is no ideal way for IT to be structured. It depends entirely on how the business itself is structured – centralized, federated, etc. It is business governance that determines IT governance. Alignment, operational efficiency, and accountability are enabled by effective governance. But for any kind of model, IT Governance should have following components:

Governance Processes

• Processes that enable effective decisions and management of IT through all stages of planning, delivering, and operating.
• Demand Management i.e. plan and prioritize initiative portfolio – Select the right work to do
• Implement a formal benefits realization program – Do it right
• IT asset portfolio management – Manage for cost-effectiveness and value
• Establish and Manage Standards – Drive lower long-run costs by standardization and repeatability
• Manage Service Providers – Optimize the value of service providers by managing service provider relationships, contracts and delivery levels

Operating Structure

• Structures and responsibilities that are clear, efficient, and aligned to achieving the business objectives
• Effective IT governance structures have clear accountabilities for creating and optimizing IT assets
• Deploy people with the right skills onto the right projects at the right time

Performance Metrics and Tools

• Business performance objectives and measures that provide insight and guidance to both business and IT leadership
• Monitoring progress of projects and their impact on available capacity

I know it sounds easier than it is to do. But without the structure around its components, there is only the form of governance – anarchy