What is IT Governance

Infonomics - Specialising in IT Governance

What is IT Governance?

The IT Governance Institute says that IT Governance is: "an integral part of enterprise governance and consists of the leadership and organisational structures and processes that ensure that the organisation's IT sustains and extends the organisation's strategies and objectives."

In other words, IT Governance is a collection of processes, policies, roles and tools that together enable an organisation to:

Understand its IT activities and capabilities;
Organise and align IT activity to corporate intent;
Allocate and focus IT resources;
Monitor IT activity for appropriate performance;
Reduce risk of expensive IT failures;
Detect and correct emerging IT problems.

Because every organisation is different, the detail of the IT Governance for organisations also differs. However, all IT Governance activities can be readily identified using straight forward frameworks, and thus can be evaluated for effectiveness.

And because IT does not stand alone from business activity, IT Governance must not stand alone from business governance. Indeed, since the purpose of IT is to enable business activity and performance, it is imperative that IT Governance focus on how it AND Business activities are working together.

For further and more recent discussion of IT Governance, please refer to our new series of Executive Briefs.

The Missing Link

While agreeing whole-heartedly with the IT Governance Institute, we believe that IT Governance is also closely allied with another poorly understood aspect of corporate governance - that dealing with Business Change.

In most medium to large organisations, each aspect of day to day business operation is supported by a corresponding IT system. It is pointless to govern the operational IT systems separately from the business operation - to do so would most likely see the IT rapidly lose alignment with the operational needs.

Similarly, in most organisations, Business Change initiatives generally involve a corresponding change in IT, and IT change initiatives generally involve a corresponding change in business operation. To attempt to govern the business change component separately from the IT component is a recipe for failure.

So to govern IT effectively, the IT needs to be put into context, and governed integrally with the business change and business operational activities that depend on it. By adopting this approach to IT Governance, organisations can increase the likelihood that they will be able to sustain their business, and achieve their business goals. Accordingly, we offer this definition:

IT Governance is that aspect of Corporate Governance that deals with the application of Information Technology in the achievement of Business Goals.

IT Governance is Important

Most organisations today depend on IT for their day to day operations. If the IT fails, there is a distinct and grave possibility that the business will be damaged. Further, IT projects typically involve organisations committing substantial resources and funds, and project failure can result in not just loss of the funds invested, but also of the benefits that would have accrued. From both these points of view, IT Governance is now regarded as a key issue for senior officers and company directors.

For a more in-depth view of the importance of IT Governance, see this extensive presentation by Dr Adrian McCullagh of Freehills to the Information and IT Security Conference, Sydney, 26-27 November 2002