Best practices for IT governance
INSIGHT ARTICLE |
All too often, information technology (IT) is an isolated function within the corporate structure, one step removed from operational affairs and management. Unfortunately, IT is sometimes seen as merely a black box of resources. Although it has become a critical aspect of operating every area of the business, most people outside of IT have little understanding of the effort involved in running an effective IT department, and even less appreciation of IT’s role aside from simply “keeping the lights on,” or keeping the systems operating.
In truth, maintenance of the IT environment should comprise less than half of the real business of IT. The majority of this group’s responsibilities—where IT truly creates value for the enterprise—should be in support of the corporate mission and strategy. Lack of effective communication between IT and the rest of the enterprise can dangerously inhibit IT from fulfilling this goal. Alignment of the IT investment and resources with the operational needs of the business is the primary objective of IT governance.
Successful IT governance is best accomplished through the establishment of a formal governance committee made up of key individuals from all major areas of the business working closely with IT leadership to establish and monitor alignment to goals and strategies. Common members include business leaders from sales and marketing, operations, materials and purchasing, design and engineering, finance and accounting, customer service, human resources (HR) and administration, and other key departments as appropriate. Committee members provide insight into the activities and needs of their individual business areas, while collectively weighing priorities against each other and IT bandwidth.
Ideally, the IT governance committee meets monthly to review the past month’s progress, key IT metrics, new proposed projects, and the upcoming month’s goals. Each functional area representative should be able to present any new IT requests with justification for each project. In addition, they can also bring in what they observe in the marketplace—this might include competitor capabilities, market direction, emerging capabilities they encounter in their research and interaction with customers, competitors, and industry communications.
The most important result of IT governance is the alignment of business priorities with IT projects. From there, a clear set of goals for the next month and quarter should be established in order to maintain overall alignment. Lastly, allocation of budget can be managed through this process in order to ensure resources are available to drive projects forward.
As mentioned earlier, this is not a once-a-year budgeting exercise. It should be a continuous process that maintains the alignment between IT and operations, especially since today’s technologies and operational needs are changing more rapidly than ever. Visibility into the IT function has never been more important, as it helps to drive corporate strategy and enable the business.