IT-governance: optimizing value-creation through IT

2021.11.17.
How can IT optimizes value-creation? What is the role of IT governance, what is its purpose? What is the connection between business strategy and IT governance? What are the areas of IT management? What is COBIT? In our article, we examine these issues.

IT has become a basic need

IT has now become an essential tool for the competitive, efficient and effective operation of organizations. Like water and electricity, almost no company today can operate without IT. Especially for companies operating complex IT systems, IT ensures and supports the full performance of corporate activities every minute of the day, every day of the year. A well-established IT system allows the company to generate value directly or indirectly. However, all this is only achieved if the IT is professionally designed, measured and managed by the company.

The connection between IT-strategy and IT-governance

The IT-strategy is derived from the current business strategy, it is based on the corporate strategy, so its aim is to help achieve the corporate mission. The framework for planning and operating IT-management is IT-governance. The goal of IT-governance is to improve the overall governance of enterprise IT and to enhance the value from information and technology investments. (Calculating the return on testing and test automation is a very complex task, which we dealt with in an earlier article.) Therefore, strategic IT-management is synonymous with improving and optimizing a company's value-creating capabilities and business processes supported by IT systems.

The task of IT-governance

IT-governance has three essential roles:

  • integration of corporate strategy and IT-strategy,
  • designating the framework for evaluation and measurement systems, and
  • laying down the principles of governance in the field of information technology.

The focus of IT-governance is on the IT function, and consequently, as a subsystem of corporate governance, IT-governance covers the areas of management, organizational structure, and processes that ensure the implementation of corporate strategy and the achievement of corporate goals through business IT, in addition, it coordinates the operation of the areas affected or served by IT.

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Why is IT-governance important?

IT-governance enables an organization’s IT to support and facilitate the achievement of a company’s strategy and goals. Thus, IT-governance frameworks enable organizations to effectively manage their IT risks and ensure that information and technology activities align with their overall business objectives. For example, a reliable corporate governance framework enables management to more effectively address corporate governance challenges because a well-functioning, organization-specific corporate governance system ensures that the company always has the information needed for proper decision-making processes and controls and presents measurable results with broader business strategies and goals.

Scopes of IT-governance

The Institute of IT Governance (a division of ISACA) divides IT-governance into five scopes:

  1. Value delivery
  2. Strategic coordination
  3. Performance management
  4. Resource management
  5. Risk management

Finding and exploiting the right technology

How do we find the most usable technology for our company? On what basis should we decide to start an IT investment? At the strategic level, this is supported by IT-governance. IT-management tools help you find, evaluate, and select the IT solutions that best suit your company’s goals. Once we have found the right technology, it will be about knowing, mapping, quantifying the current and future situation, planning the steps and preparing the decisions needed to achieve it - but this will already be the area of IT-controlling.

COBIT

COBIT is an IT-management framework developed by ISACA to help businesses develop, organize, and implement information management and governance strategies. COBIT (Control Objectives for Information and Related Technology) is thus an internationally recognized IT-governance framework that helps organizations meet business challenges in terms of regulatory compliance, risk management, and aligning IT-strategy with organizational goals. The latest iteration of the framework is COBIT 2019.

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Sources: 1 2 3


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Complete test automation service and infrastructure: test automation from design through implementation to evaluation of results. ProofIT Ltd. has been providing assistance to a wide range of services and testing infrastructure, primarily for large companies and state organizations for more than ten years.
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