IT Governance

Definition

IT Governance builds structure around how companies align their IT strategies with business strategies. IT Governance enables companies to make sure that the companies stay on the right direction to accomplish their strategies and goals. In addition, it can be implemented to measure IT performance of companies.

Concepts and Methods

Concept: Business IT Alignment - is used to ensure that a company is able to effectively use Information Technology (IT) to achieve its business strategies and goals (Wikipedia, 2014). While organizational models continue to evolve and management techniques continue to change, IT business alignment, its close relative and process technology alignment remain as the major goals for many organizations. According to Gartner (2013), "How technology will support growth and results is a fundamental question for the future. It's no longer sufficient to tend the IT garden and declare success. Digital technologies provide a platform to achieve results, but only if companies adopt new roles and behaviors to hunt for digital value. A new agenda that secures IT's future strategic role, funding, and skills is necessary."

Method: IT Steering Committees - are people who ensure that a company is heading in the right direction and aligning with its IT strategies (Barclays, 2014). The purpose of the Information Technology Steering Committee of a company is mainly to: 

• Oversee major IT related strategies, projects and technology architecture decisions; 
• Monitor if the company’s IT programs effectively support the company’s business goals and strategies; 
• Consult with the company’s senior IT management team; 
• Inform the higher-level directors on IT related matters.

Tools and Best Practices

Heller (2012) introduces the five best practices for IT Governance as the following comprehensive terms:

1) Get your business priorities straight
Align IT investment with strategic business objectives.

2) Use the rear-view mirror
Look at the success and funding of previous IT projects to make determinations about future expenditures.

3) Keep it small and elite
Keep involvement of governance to executives and business leaders.

4) Don’t mistake good governance for project success
Governance is not the same as project management. Don’t forget about a project after it has been approved by the governance committee.  Make all those involved accountable to ensure project success.

5) Right-size your approach and stick with it
Match company's governance strategy with the size and complexity of the organization and maintain it that way.

The information represents valuable knowledge that can be easily explained and adapted to any organization’s governance practices regardless what particular industry they might be in. 

My Approach

Heier et al (2009) described "increasing IT pervasiveness and the growing difficulty for executives to avoid IT decision making." This strengthens the correlation with the importance of IT governance and business success. My approach to using IT Governance in a cost-effective manner is to keep governance processes up to date with current business and IT strategy. Horne and Foster (2013) emphasized that companies should prioritize more on capabilities, not projects. This approach is more for highly innovative capabilities which have an long-term payoff analysis. An overview of current business capabilities is performed and determined whether or not to proceed with the project. It acknowledges that there are successful ways to govern IT which have the potential to create significant business value for a company that might be looked over.

Secondly, my approach is demonstrated by the Accenture Company (2012). They identified that in order to develop value through IT Governance, it is crucial that high-performing businesses are successful in adopting the right governance structure and implementing good IT value practices. Particularly, the following success factors are also identified by the Accenture Company (2012):

1. Establish an overarching IT Governance framework
2. Focus on tight business and IT alignment
3. Make IT a business driven activity
4. Plan IT demand professionally
5. Bridge the skill gap between business and IT
6. Run IT as a business

Those factors demonstrate the importance of cohesion and integration of both business and IT. The real objective of IT Governance is to be able to manage IT as the business is managed. Nevertheless, much of the success of those ideas lies in the employees working within a company. Adopting the correct governance strategies and employing the right people leads to value in the form of higher profits, better business returns on IT investment, and positive impact on shareholder value (Accenture, 2012).