There are many reasons your company should implement an IT governance framework. The process doesn’t end at implementation. IT governance requires proper design, communication, and maintenance. To deal with this complex process, it is best to seek third-party assistance. An experienced team of practitioners can help your enterprise implement various IT frameworks, namely:
- Integrated Business and IT Risk Management
- Optimization of IT Resources and Performance
- Business IT Alignment
- Regulatory Compliance and Corporate Requirements
What Is IT Governance?
It can be defined as a key fragment of corporate governance geared towards IT systems, their functionality, and risk management. IT governance can also be viewed as an effective framework which incorporates roles, leadership, processes, and organizational structures to ensure that IT resources are aligned to deliver the set goals.
When it comes to IT governance, all stakeholders have a say in the decision-making process. As you can see, it is an amalgam of factors that have to work in tandem.
What Is the Biggest Challenge of IT Governance?
Due to the proliferation of mobile devices and the rapid evolution of cloud services, IT governance has become an increasingly important subject. More than ever before, organizations want to monitor closely their services, products, processes, and investments. Governance entails responding effectively to the management, market forces, and organizational development challenges. It also touches, to a big extent, the leadership. It can, therefore, be taken as an intervention for change management.
Deploying governance strategies to change the leadership positions of the involved professionals is fundamental to the success of an organization.
However, poor IT governance can lead to:
- Poor decision making
- Implementation of IT functions that don’t support business
- Poor delivery of services
- Discovery of underlying IT problems when it’s too late
- Missing market opportunities because the IT department cannot act quickly
- Inaccurate projection of the demand for resources
- Increased IT costs
- Low value for money because employees are taking ages to deliver what’s needed
- IT department failing to meet the expectations
At its core, outsourced IT governance puts a crystal clear picture of what is expected and how those expectations suit your organization’s objectives.
IT Governance and Third-Party Consultancy
Since good IT governance is vital in creating a flawless IT environment in a business, you should give it priority attention at the contracting phase if you decide to outsource a deal. During the negotiation stage, focus on governance and be very clear on the tasks that the third-party agency should accomplish.
Consulting a team of specialists ensures that your IT governance model is implemented in the required rigor and discipline. No doubt, IT governance is a principal value worth outsourcing. When you consult a third-party IT governance agency, there are three main areas that will be taken care of:
- Roles and duties
- The management framework and
1. Roles and Duties
Good IT governance involves 4 stakeholders at the highest level: Chief Information Officer (CIO), Chief Executive Officer (CEO), Chief Financial Officer (CFO), and Chief Risk Officer (CRO). In the contract, their rights in decision making must be clarified. The CIO basically determines the necessary IT deliverables to meet the business needs. You certainly don’t want to take initiatives without clarifying the deliverables.
The responsibilities of the CFO are equally important in the contract. He is responsible for funding and sanctioning IT activities. In the contract, the outsourced consultant identifies the activities that must be approved by the CEO. Such activities include major IT changes, organizational projects, price changes, and major changes in service levels.
The roles of the CRO are also defined to avoid power wrangles among the team members. These duties are defined in the Statement of Work. This stakeholder plays a big role in the implementation of approved plans and successful IT relationships.
2.The Management Framework
The management structure of an organization should support the execution of the aforementioned roles and duties. There is a need for a forum that reviews the requirements of a business and monitors various activities. That is the ideal structure of an organization but it’s not always the case. Third-party IT governance is the perfect opportunity to build the ideal organizational structure.
To ensure that the stakeholders carry out their duties as per the contract, a team of IT governance specialists may suggest three committees: user, operational, and executive committee.
Outsourcing IT governance offers an opportunity to introduce a wider IT reporting scope that supports the roles stipulated in the contract. User committees normally call for progress reporting of the approved projects service-level reports, and enhancement backlog reporting. The operational committee requires similar reporting depending on their role in the execution of IT services.
When it comes to the executive committee requirements, the reports are summarized into a balanced scorecard report and highlight the critical aspects such as budgeting, service quality, strategic directions, customer satisfaction, and business contributions. The IT governance agency will specify the necessary reporting needed to monitor services and relationships.
Does Your Company Have a Defective IT Development Strategy?
A business strategy without an efficient IT governance framework is considered incomplete. IT governance secures the core business of any organization. Third-party services can better align your IT with the goals and special needs of your organization. They offer solutions to such issues as the technical requirements in the short or long term, IT priorities, the ideal architecture, allocation of funds, and calculation of ROI on IT.
A team of certified IT governance specialists examines the current situation of your business and its IT services, analyzes your business goals and requirements, and maps them over the IT department. Depending on the collected information, they develop a custom roadmap that the IT projects should take. That way, you can clearly see your enterprise’s competitive edge through IT and related services.
Note that you will also be able to identify the accountabilities for results achievement. This is the exact mechanism you need to enhance the results of the governance strategy.
Organizations are now making IT roles their main priorities. But most businesses are falling short in the IT governance spectrum, particularly when it comes to outsourcing IT functions. If you make good governance an important area of your organization, you’ll be doing a great job in setting business expectations and will significantly increase the chances for a win-win situation for every stakeholder in your company.
An outsourced IT firm takes governance seriously. If IT governance is not enforced the right way, your project is less likely to hit the targets. Hopefully, you now understand the key issues you should address in your organization to achieve good governance. Ensure that you understand what your business needs are at a strategic level. Using the current procedures, make sure that what your company is doing supports its main goals rather than what seems easier.
It is imperative that you sit down with your in-house IT team and explain what is needed at a strategic level. Support the team and see if they need to improve the prevailing processes. They might challenge your requests but don’t forget that reducing their projections arbitrarily could be counterproductive.
Rather, emphasize an organized walkthrough of their estimated projections against the deliverables needed. The time required to improve your business even after consulting managed IT services would be greatly reduced. Keep in mind that these services are continuous rather than a one-time solution.
Consider developing a long-term relationship with a trusted managed services agency that better understands your company needs.