Enterprise Governance of IT

Moving From IT Governance to Enterprise Governance of IT

 

IT Governance is a concept that emerged suddenly and became an important issue in information technology. “Improving IT governance” made Gartner’s Top 10 CIO Management Priorities for the first time in 2003. In 1998, the IT Governance Institute (ITGI) was founded to disseminate the IT governance concept.

 

After the emergence of the IT governance concept, the notion received much attention. However, due to the focus on “IT” in the naming of the concept, the IT governance discussion remained mainly within IT. In the field, many IT governance implementations are driven by IT, while one would expect that the business would and should take a leading role as well. It is clear that business value from IT investments cannot be realized by IT, but will always be created on the business side. For example, there will be no business value created when IT delivers a new customer relationship management (CRM) application on time, on budget and within functionalities, if afterwards the business does not integrate the new IT system into its operations. Business value will be created only when new and adequate business processes are designed and executed, enabling the sales department of the organization to increase turnover and profit.

 

This realization that the involvement of business is crucial initiated a shift in the definition toward Enterprise Governance of IT. Enterprise governance of IT is an integral part of corporate governance and addresses the definition and implementation of processes, structures and relational mechanisms in the organizations that enable both business and IT people to execute their responsibilities in support of business/ IT alignment and the creation of business value from IT-enabled investments.1 Enterprise governance of IT clearly goes beyond IT-related responsibilities and expands toward IT-related business processes necessary for business value creation.

Additionally, the International Organization for Standardization (ISO) moved in this direction with the release in 2008 of a worldwide standard defined as “Corporate Governance of IT” (ISO/IEC 38500:2008). In this standard, ISO puts forward six principles for IT governance, addressing both business and IT roles and responsibilities, and expressing preferred behavior to guide IT-related decision making.

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