IT governance, or how to align information systems and business strategy
In an economic context dominated by information, innovation and the race for performance, IT governance (or IS governance) seems to be emerging as one of the best strategies for optimising IT resources.
Why is this?
Because it tends to align information systems and technologies with the company's overall business objectives, in a market and working environment that are increasingly geared towards digital transformation.
But what exactly do we mean when we talk about IT governance? What are the issues involved, and what frameworks need to be adopted to deploy an information system that is as close as possible to the reality of your organisation?
Read on for the answers.
What is IT governance?
Definition of IT governance
The concept of IT governance is defined as a formal framework for developing information technologies in line with the company's overall objectives and strategy.
This process was born out of the following observation: information systems generate value, and should no longer be considered as mere logistical support:
On average, [information systems] account for 15% to 20% of company sales, or around 50% of the added value generated by companies. Globally, this represents an amount in the region of 20,000 to 25,000 billion dollars.
Manifeste pour la Gouvernance des Systèmes d’Information
💡 We often find the notion of IT governance (or information technology governance) equated with that of IS governance (information systems governance or IS governance), or even IT governance.
IT governance: COBIT or ITIL, which framework should you choose?
IS governance is based on applications described in a number of standards. Focus on the two main ones.
ITIL (Information Technology Infrastructure Library)
The aim of ITIL? To standardise best practice in information management.
IT governance according to ITIL:
- Is part of overall corporate governance, even if the repository was not initially created for this purpose;
- Provides a basis for standardising the actions of IT departments and those of the organisation;
- Defines good organisational practices to optimise business processes.
COBIT (Control OBjectives for Information and related Technology)
Another well-known benchmark in the IT world, this one is more oriented towards governance. It builds on the contributions of ITIL, but its main aim is to improve productivity and provide a managerial framework within a business-oriented approach.
To achieve this, COBIT IS governance is based on five fundamental principles:
- Take all stakeholders into account;
- Cover the company's IT needs from end to end;
- Apply a single integrated reference framework;
- Implement a global approach to information systems;
- Separate governance and management.
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The difference between IT governance and IT management
After reading these few points, you may be wondering how IT governance differs from simple IT management.
In reality, there are nuances:
- IT governance is driven by the objective of supporting the company's success and growth over the long term. This is why it is often carried out by a steering committee, which includes representatives from the IT department, as well as other key players in the company (company directors, certain business managers, etc.).
- IT management ensures that day-to-day activities and processes run smoothly. More technical profiles work on these tasks.
The challenges of IS governance
Creating value
Technology is only the means, not the end.
Manifeste pour la Gouvernance des Systèmes d’Information
Companies have now realised that IT is no longer purely operational... but strategic!
This awareness goes hand in hand with the fact that IT is no longer seen as a cost item to be contained: in a constantly changing society and market, business costs are no longer linked solely to hardware or capital.
👉 Today, information reigns supreme, becoming a ' raw material' to be produced, exploited, monetised and so on. Hence the importance of having a high-performance information system to manage data and extract value from it.
All in all, information systems are one of today's most value-creating jobs. This implies co-ordination with the decision-making processes of senior management.
Improving business processes
With the emerging challenges of function automation, digital transformation and dematerialisation, the various processes and businesses are increasingly dependent on information systems.
Implementing IT governance means optimising all these workflows, and therefore increasing productivity and efficiency at every level of the organisation.
Optimising costs
Optimising processes also means optimising costs. In other words, IT governance rationalises IT investments in line with real needs and priorities.
This means reducing the budgets allocated to non-priority items, while focusing on those that generate the most added value.
Managing risk
IT governance and risk management go hand in hand. IT Departments must be able to anticipate them:
- through preventive measures such as incident management
- by taking account of the regulatory context.
Taking IT risks into account when establishing the overall strategy provides a more realistic view of the company's situation, as well as greater visibility over future expenditure, and is also a real competitive advantage.
Enhancing performance and competitiveness
By improving control over business processes and optimising information management, IS governance is proving to be a lever for performance and competitiveness.
Ultimately, the ultimate goal of IT governance remains to gain an undeniable competitive advantage, thanks to :
- adding value to IT services
- strategic alignment with the real needs of the business and the market.
© Journal du Net
How should IT governance be managed?
Identify the objectives to be met
Implementing IT governance involves :
- being in line with the company's strategy and short-term and long-term objectives;
- supervising and measuring IT performance;
- ensuring that information systems create business value and generate a good ROI (Return On Investment);
- manage IT risks;
- anticipate future needs and developments, so as to guide its IT actions in the best possible way;
- instil a culture of IT governance throughout the company.
Defining an IT strategy
To achieve this, it is necessary to create a strategic plan and define the best practices to be followed within the organisation. Within this framework, roles are also specified, so that everyone knows what actions need to be taken.
If we follow the advice of the Manifesto for Information Systems Governance, this involves activities in :
- planning and organisation: implementing a proactive approach and planning activities in line with the company's actual priorities, budgets and resources, all in accordance with business requirements;
- steering: making sure that operations are in line with forecasts, and making adjustments if necessary (resources, budgets, etc.). This role generally falls to the CIO (chief information officer);
- coordination: coordinating the flow of requests, but also the actions of all the company's stakeholders;
- control: to ensure that the actions implemented are as accurate as possible, and that they are measured (using KPIs and dashboards, for example) to ensure that they are always perfectly aligned with the company's needs, and by extension those of its target customers.
Using the right tools for good IT governance
Given the various imperatives inherent in good IT governance, it goes without saying that the use of appropriate software is essential for the IT Department, in order to :
- Gain an overview of projects, resource management and budgets,
- manage all IT projects as effectively as possible.
We can rely on several types of software:
🛠️ IT management solutions:
Advantage: they focus on issues specific to the management of the IT department in the broadest sense.
For example, Abraxio, developed by former IT Directors who are aware of business issues, specialises in managing IT department activities, whether in terms of projects, budgets, teams or suppliers. This platform makes it possible to manage a portfolio of IT projects in line with the company's vision, while fostering collaboration between teams.
🛠️ ITSM (Information Technology Service Management):
Advantage: they are used to manage the company's IT services in order to improve their operational efficiency.
Example: EV Service Manager is a solution developed in line with ITIL best practice. Among other things, it streamlines processes by using workflows and automating low added-value tasks. It also manages the IT budget with greater precision, thanks to visibility of financial data. All in a perfectly agile way.
🛠️ Portfolio Project Management (PPM):
Advantage: they support the company in the overall management of all its projects.
Examples:
- Planisware Orchestra is a PPM perfectly suited to the complete management of IT projects, from the launch of an idea right through to its completion. What's more, you have a consolidated and reliable view of all the company's projects, so you can better align them with global objectives. All through a user-friendly interface.
- Project Monitor is a tool for prioritising and communicating the IT Department's roadmap within teams. Thanks to this PPM software, you can objectify project arbitration, effectively manage resource workloads and manage portfolio planning and budget preparation.
- Triskell goes further than a PPM, positioning itself as a governance solution for SMEs and major accounts. With this platform, you can address the entire business management value chain, from strategy to operational execution. This strengthens collaboration between management, the business and IT departments.
IT governance and change management
IT governance therefore seems to fit in perfectly with performance-driven organisations, offering both a technical and organisational response to the increasing complexity of the market.
But while it is built around control and standardisation, it is important that the business and its stakeholders take ownership of the subject, so as not to lose agility and innovation. That's why IT governance includes change management, which is essential if all the teams are to buy into the project and work together to effectively meet the same objective of creating value.
Article translated from French