IT governance: What is it, and why does it matter?

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IT governance: What is it, and why does it matter? | Pleo Blog
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In today’s digital world, technology drives almost every part of a business – regardless of your industry. But without proper management, IT can quickly become chaotic, costly and risky. That’s where IT governance comes in.

IT governance is all about making sure your IT efforts support your business goals, minimising risks and helping you get the most out of your tech investments.

In this article, we’ll cover what IT governance is, why it’s important for your business and 5 best practices for effective IT governance.

What is IT governance?

IT governance is the process of managing and overseeing a company’s key IT decisions to improve its IT management.

IT governance ensures the company’s IT investments and resources are aligned with its business goals while also managing risks and making sure the company gets value out of its tech.

Key aspects of IT governance include:

  • Strategic alignment: A central element of IT governance is making sure IT initiatives and projects support the company’s mission and overall objectives – in short, that they’re aligned with the company’s business goals.

  • Value delivery: IT governance focuses on ensuring IT delivers the value it promised. This means keeping costs down, improving service quality and driving innovation.

  • Risk management: Risk management is all about finding and dealing with IT-related risks – e.g. cybersecurity threats and operational disruptions. It’s key for protecting the company’s information and systems.

  • Resource management: An important part of IT governance is making sure IT resources like people, processes and tech are used efficiently. This involves planning and managing the IT budget, staff, infrastructure and overall capabilities.

  • Performance measurement: This is about tracking how well IT is doing by using performance metrics and KPIs – it’s one of the ways IT governance helps the company see if its IT investments are paying off.

  • Compliance: Compliance is a crucial part of IT governance. It’s about ensuring IT operations follow internal rules and external laws and regulations – e.g. GDPR, HIPAA or SOX.

The purpose of IT governance is to set up clear processes, accountability and oversight to make sure IT is doing its part to support the company’s objectives. This is particularly important in industries where technology plays a central role in delivering products and services.

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Frameworks and standards for IT governance

It’s important for companies to get the most out of their IT governance processes. IT governance frameworks are here to help with that: they’re sets of guidelines created by neutral third parties to help companies implement effective IT governance processes.

There are several frameworks that provide guidelines and best practices for IT governance, and which are widely recognised across the world.

Some of the most well-known frameworks include:

  • COBIT (Control Objectives for Information and Related Technologies): One of the most popular frameworks for IT governance. COBIT provides a comprehensive structure for managing and governing enterprise IT.
  • ITIL (Information Technology Infrastructure Library): A set of best practices for IT service management. ITIL helps to align IT services with business needs.
  • ISO/IEC 38500: An international standard for corporate governance of IT. ISO/IEC 38500 outlines principles and a model for effective IT governance.
  • CMMI (Capability Maturity Model Integration): A process improvement framework that guides organisations in improving their processes – including those related to IT.

Many organisations incorporate parts of several frameworks to structure their approach. However you choose to do it, make sure your chosen framework is the right fit for your business.

The benefits: Why IT governance is important for your business

We mentioned above that IT governance is particularly important in industries where technology plays a central role in delivering products and services. However, that doesn’t mean it won’t benefit companies in other industries.

In an increasingly digital world, strong IT governance is essential for all companies – regardless of which industry you’re in.

Here are some of the most important benefits you can experience from effective IT governance:

  • Better decision making: IT governance gives you a more transparent and structured approach to decision making surrounding your IT investments.
  • Risk mitigation: With IT governance, you can quickly identify and take care of IT risks that can disrupt your operations or result in data breaches.
  • Optimised performance: When your IT efforts align with your business objectives, they help boost your performance – and that helps you create the most value for your business.
  • Regulatory compliance: Following the rules and regulations helps you reduce security risks and avoid legal trouble, and that builds confidence among both your customers and investors. 
  • Cost management: Effective IT governance helps you get the most value out of your IT assets. It helps you control your budgets and avoid unnecessary expenses – and your bottom line will thank you for it.

As you can see, there are plenty of reasons to invest in IT governance – you just need to make sure you’re doing it right. That’s what we’ll get into next.

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5 best practices for effective IT governance

IT governance is a continuous process that should be top of mind in your company’s daily work. To help you keep it that way, we’ve compiled a list of five best practices to help you stay on top of your IT governance.

1. Align IT with your business strategy

IT should always support your overall business strategy – not just running off doing its own thing. Make sure your IT projects and spending are actually helping your company.

If your IT and business leaders are on the same page and having regular meetings to keep things aligned, you’re all set to avoid wasting resources and ensure every IT decision adds value to your business.

2. Set up clear roles and responsibilities

When it comes to IT governance, everyone needs to know who’s in charge of what. Deciding on projects, overseeing operations or executing tasks – whatever it’s about, accountability is key.

Set up a governance committee or designate specific roles for IT oversight. This ensures nothing falls through the cracks, makes decision making smoother and helps you avoid confusion about who’s responsible for what.

3. Stay on top of your risk management

Risk management isn’t something you can introduce and then forget about. You need to stay on top of it to make sure your company is protected and keep your operations running smoothly.

Regularly check for IT risks – e.g. cybersecurity threats, system failures or compliance issues – and take care of them before they become big problems. Set up processes to identify, assess and deal with these risks. In short, be proactive with your risk management.

4. Monitor your performance

Performance monitoring isn’t just about keeping score – it’s about making sure IT continues to add value to your business and identify opportunities for improvement.

Keep track of how well IT is doing by setting up KPIs and using metrics to measure progress. If your IT investments aren’t delivering the expected results, adjust your strategy until they do.

5. Balance flexibility control

IT governance should give you enough control to manage risks and reach your business goals – without putting too many limits on how IT operates. You want the right level of oversight without getting in the way of progress.

Work to find that sweet spot where your IT teams have the flexibility to innovate, move quickly and stay agile and responsive to new opportunities while sticking to governance guidelines.

Wrapping up

IT governance isn’t just about keeping your tech in check – it’s about ensuring your IT investments deliver real value, stay aligned with your business goals, and help your organisation grow safely and efficiently.

By following the best practices above, you’ll be all set to stay on top of your IT governance and keep your business on track and ready for the future.

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