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Saturday, 12 July 2014

What is the impact of IT Governance in your Organization?

Today we are in an era of rapid technological changes, complex operating environments and demanding consumerisation of IT.  Enterprises are forced to change gears to make the paradigm shift imminently not only to be competitive but to secure their place in business. In order IT to stay relevant and influential in this age of business,  that understanding the true meaning of IT governance is the key to our success. 
While organisations are spending time, effort and resources to scale up to new frontiers, there is no blue print to guarantee success in their endeavors.  Over and above, changing regulatory and legal compliance requirements make it a difficult proposition to sail through seamlessly.
Hence it is the need of the hour for enterprises to fall back to a robust Governance structure and control to handhold and guide them during this unpredictable journey.
Why is this important?
The recent PINK 14 conference that concluded in Vegas resonated with one clear message about Governance of IT being single greatest reason that businesses were unable to get real benefits of IT. In other words IT fails to give true business value.  Hence there is an increasing need for IT Governance to play a pivotal role in making this a reality.  While IT is getting overwhelmed with Cloud, Mobility, BYOD, Big Data and new market trends, managing complexity needs a phenomenal governance mechanism. It is important to get both IT and the business to understand how Governance can help provide true value to their customers and create customer delight.  Cobit 5.0 – Governance framework has become popular merely by the fact that it has appealed well to the business audience.
So what is Governance?
In today`s context, I see that Governance is used interchangeably with the word Management and would like to clarify a few distinctions between the two to set the context right.
IT governance is primarily concerned about two things: IT’s delivery of value to the business and mitigation of IT risks. On the other hand, Management plans, builds, runs and monitors activities in alignment with the direction set by the governance to achieve the enterprise objectives.  Governance involves executive committee and board that is independent of organization whereas the Management involves senior management staff within the same organization.
In simple words, Governance is doing the right things while Management is about doing things right.
People tend to relate Governance as an element of bureaucracy/executive control, which adds additional layers of approval and processes to ‘tightening screws’.
As a practitioner on IT Governance, I have seen several such myths perceived by the organisation that I had written in my earlier blog titled “IT Governance – 5 Myths to Break this New Year”
Let’s take a  simple example to articulate the importance of  Governance .  All of us know about the Lehmann Brothers bankruptcy.  Valukas report that was produced by an independent investigator of bankruptcy revealed some startling facts.  A) Repo 105 ( Remove B$  security inventory from balance sheet) was completely illegal under the US Law and therefore Lehman Brother had to do all of these transactions in the UK under their London unit .  b) Out of 10 Board of Directors, only 2 had  direct experience in financial industry c)  The risk management committee  only met  twice in 2006 and 2007.
These areas get clearly addressed, if governance structure was formally established to deal with due-diligence proactively.  So what has been your experience with setting up of Governance in your organization?
This Post was published at Service Desk Institue

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