In today's organisations, where such strategic importance is placed on the IT function developing and delivering complex systems to support both corporate policy and external regulations, IT governance has a major impact on business strategy.
The successful alignment of IT and the business is more critical than ever, and mature IT governance practices enhance the ability of IT to deliver strategic initiatives based on efficiency, control and value. But how do you measure the realisation of business value delivery through IT? How can assurance be provided that the IT organisation is not investing in bad projects and that there are adequate control mechanisms in place?
The IT function continues to see ever-increasing challenges from the business in the delivery of products, services and systems. The context of this delivery, and the environment in which the IT function operates, is also continuously changing. New regulatory requirements, increased competition, complex supply chains, and a diverse group of key stakeholders whose expectations need to be managed, all conspire to increase the challenge.
In the face of these significant challenges, IT governance can bring clarity around the responsibility, authority, communication and reporting flows which enhance decision making.
Accompanying policies, processes, standards and control mechanisms enable people to carry out their roles and responsibilities. Effective IT governance is therefore a key strategic enabler for growth and prosperity and helps to achieve the fusion of IT and the business. However, to achieve these ambitions it must be addressed in the context of the wider business governance, and be strategically aligned through the value chain.
Designing an effective IT governance structure around the organisation's value chain, objectives and performance goals, is therefore a significant challenge and one which needs to be approached in stages through a supporting governance framework which takes account of all the key considerations.
The IT Governance Framework, when implemented, will include supporting structure, processes and mechanisms. In this context, the processes include strategic decision making and monitoring through methods such as the balanced scorecard. The importance of the IT function justifies the use of the balanced scorecard to further assess the effectiveness of IT governance changes introduced.
The balanced scorecard
The balanced scorecard can be an effective strategic planning and management tool for aligning activities to the vision and strategy of the organisation, improving both the internal and external communications, and monitoring organisation performance against strategic goals. Ideally, the balanced scorecard should be a pragmatic tool for easily identifying how well the IT governance process is going and how it can be improved. The scorecard:
Balances both financial and non-financial measures;
Balances performance drivers (lead) with outcome measures (lag);
Balances short and long term objectives/measures.
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