The Five Domains of IT Governance
The essential components of IT governance can be expressed as follows:
- IT governance overall is about delivering value and managing risk.
- Value delivery, which embodies the concept of risk-related returns, is perhaps the most important.
- Value delivery is not possible without strategic alignment and resource management.
- It is impossible to provide transparency of success or failure without performance measurement.
Strategic Alignment
Strategic Alignment is concerned with how IT supports the enterprise strategy and how IT operations are aligned with current enterprise operations.
Alignment involves:
- Understanding the needs of the business
- Developing IT strategy and objectives
- Resource allocation – portfolio management
- Demand management
- Communication
Why Alignment is Important NEEDS REWRITE
Whilst recognising the importance of IT for overall strategy delivery, prominent amongst these issues was the perceived disconnect between IT strategy and business strategy. This lack of alignment leads to adverse business issues including:
- Inability of the business to reach its full potential
- Failure to identify and capitalise upon business opportunities that could be enabled by IT
- Potentially higher operating costs and, therefore, competitive disadvantage due to the failure to replace expensive labour-led processes with lower-cost (over the long term) automation
- Incorrect and ineffective focusing of IT-related resources
- Inability to recruit and retain high-quality IT and business personnel
- Higher costs overall
- Erosion of stakeholder value over time
Value Delivery
Value Delivery ensure that value is obtained from investment in information technology and is an essential component of IT governance. It involves selecting investments wisely and managing them throughout their life cycle—from inception to final retirement. It involves making sure that IT delivers appropriate quality on-time and within budget
and examines how actual cost is managed and how the ROI is determined.
and examines how actual cost is managed and how the ROI is determined.
- Identifying project value drivers
- Identifying service value drivers
- Project management
- External benchmarking
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Performance Management
Performance management looks at how IT tracks and monitors implementation strategy, how the success of project are determined, at resource usage,
and the ensuing process performance and service delivery
and the ensuing process performance and service delivery
- Customer satisfaction
- Service level management
- Business value measurement
- Process improvement
Risk Management
Risk Management is about the safeguarding of IT assets, disaster recovery and continuity of operations
including security and information integrity.
including security and information integrity.
- Organizational risk appetite
- Project and investment risk mitigation
- Information security risk mitigation
- Operational risk mitigation
- Compliance regulatory mandates
- Audit
Resource Management
Resource Management looks at how IT optimizes and manages critical IT resources
- Hardware and software asset management
- Third party service providers & Outsourcing
- Standardized architecture
- Financial management – service costing
