MSG Team's other articles

11540 The Misconceptions about Poverty

Many governments all over the world have made attempts to abolish poverty. However, most of them have not succeeded. The theme of eradicating poverty has been common to both socialists as well as capitalists. However, no one seems to have been able to solve the problem. It is likely that the problem itself has been […]

9326 The Financial Effects of an Indo-Pak War

The relations between India and Pakistan have never really been cordial. Ever, since the Islamic Republic of Pakistan was carved out of British India, the two countries have been at loggerheads. The countries have fought four wars until now, and the disputed territory of Kashmir has been at the centre of three of those wars. […]

10682 Power Shift: How the Internet has Spawned a New Class of Powerbrokers in All Fields

How the Internet has Shifted the Balance of Power in All Fields of Our Lives It would be an understatement to say that the Internet has revolutionized and transformed all aspects of our lives. From the way we shop, work, and live, there is no part of our lives that has been fundamentally reshaped by […]

9778 Identify the Vital Inputs in Six Sigma Project

The list derived from the detailed process map needs to be shortlisted. This can be done in multiple ways. The different tools that are commonly used in six sigma projects to meet the purpose have been written down. They are as follows: Cause Effect Matrix: The cause and effect matrix takes the list of inputs […]

12146 The Opportunities and Challenges of Project Management in Virtual Workplaces

Why Project Managers Might Find Managing Remote Teams Challenging As workplaces became virtual and employees started working from home due to the Covid 19 Pandemic, organizations found that there are many challenges in managing such virtual workforces. For instance, Project Management is challenging when managers cannot meet employees face to face and instead, have to […]

Search with tags

  • No tags available.

Introduction: What is IT governance and why it is important?

It is not enough for corporations to have IT systems and expect them to deliver strategic value to them. Instead, there needs to be a mechanism in place to regulate, monitor, and govern the value creation efforts of the IT systems.

This governance mechanism of IT systems deals with the performance and risk management of those IT systems in a manner that would create value for the organizations and ensure that the intended alignment of the IT and business objectives is on track. Hence, IT governance deals with identification, establishment, and linking of the mechanisms of the IT systems to both manage risks and at the same time ensure that their performance is in tune with the stated objectives.

The need for IT governance is felt because the interests of the organization and those managing the IT systems can be at odds or in other words, there is a conflict between these two imperatives. Thus, IT governance is needed to ensure that the IT systems are doing their assigned duty and that the objectives of the CEO and the CIO are the same.

Indeed, it can be said that IT governance includes all the key stakeholders in the organization starting with the executive management and the boards and including the staff, customers, and ending with the regulators and investors.

There are many definitions of IT governance and for the purposes of this report, the definition that is closest to our discussion is that IT governance is the alignment of leadership, organizational structures, and processes to actualize and sustain the organizational objectives through the use of IT.

Further, IT governance is also defined as the governance of IT in a manner that would be directed and controlled and consists of evaluation and monitoring the plans for the IT systems so that they are in alignment with the objectives of the organization.

Apart from this, it also needs to be mentioned that corporate governance and IT governance must not be viewed in isolation but must act and move in tandem. Indeed, many experts point to the fact that IT governance is a subset of corporate governance and that both must be framed in a mutually dependent manner.

Broadly speaking, the objectives of IT governance can be summed up as assuring the creation of value through the use of IT; oversight of the management’s performance; mitigation of the risks associated with the use of IT; and a general tendency to have oversight over the IT systems so that there is alignment between the organizational goals and the goals of the IT systems.

Key terms explained

The terms IT governance, IT management, and IT controls are often used interchangeably though this is fallacious as each of these terms refers to different aspects of organizational imperatives.

The primary objective of IT governance is the marshaling of the IT resources available to the organization and the stewardship of the IT systems in a manner that would create value for the organization.

On the other hand, IT management is all about the plans to operationalize the use of IT resources, directing and controlling the use of such resources, and organizing the management of such resources.

Similarly, IT controls are the mechanisms put in place to ensure that the organizational IT systems are being monitored and tracked. Thus, as we can see, there is a difference in each of these terms, which is more than semantic and instead, extends to the scope as well as the depth of the organizational mandate for each of these terms. We have used the term organizational mandate, as IT governance is a higher-level business imperative whereas the other terms are more micro-managerial in nature.

The best way to think about IT governance is to ask the question as to what can be achieved through the use of IT and how well the existing IT resources can be leveraged for the benefit of the organization.

In other words, IT governance can be seen as a superstructure that encompasses the other terms defined above. Moreover, IT governance is itself a substructure in the overall superstructure of corporate governance and business governance. This means that IT governance is effective only when there is a vertical and horizontal alignment between these various elements of the organizational structure.

Framework of IT governance

There are many IT governance frameworks that are used by organizations worldwide and the most widely used framework is COBIT or the Control Objectives for Information and Related Technology). This framework prescribes a set of 37 different IT processes and the means of managing these processes through identifying the inputs and outputs along with key process activities, performance measures, and process objectives to ensure that the IT systems are indeed delivering business value.

The key reasons why organizations use the IT frameworks are to ensure that they use the IT systems in an efficient and effective manner. Further, risk mitigation and performance management are key business imperatives, which the organization must follow so that there are no surprises for its operations and that the business objectives are being met.

Conclusion

IT governance has emerged as a key imperative for organizations as during the 1990s there were several corporate failures and disasters arising out of poor corporate governance as well as lack of alignment between business objectives and the IT objectives.

To conclude this report, it would be pertinent to note that to avoid such instances of business failure, organizations would be well advised to actualize effective and efficient IT governance along with responsible and reliable corporate governance.

Article Written by

MSG Team

An insightful writer passionate about sharing expertise, trends, and tips, dedicated to inspiring and informing readers through engaging and thoughtful content.

Leave a reply

Your email address will not be published. Required fields are marked *

Related Articles

Components of Commercial Value Chain

MSG Team

The Changing Face of Business Environment

MSG Team