Rethink the IT Governance Model: 3 Key Adaptations to Create Business Value

Recently, Rethink IT introduced 5 disruptive trends currently impacting IT and business leaders. One of the most unruly trends is that which signals IT’s shift in responsibility to the various business units within a company, bypassing IT in some instances. Given the shift in IT’s stronghold on technology and subsequently the transferal in budget allocations throughout an organization, how must governance change?    

Before we consider this important question, we first need to define the term governance.  In a broad sense of the word — governance refers to the management of IT investment. This includes hardware, software, services, people, and facilities. Additionally, governance includes the maintenance of alignment within the business practices, updating investment strategies, adhering to adopted standards and architectures, and managing the overall demand for IT services.

Traditionally, the IT governance organization consisted of the CIOs who acted as chairperson, senior IT leaders, representatives from finance, and potentially a few business leaders. The governance process focused on gathering requirements from the business units for new application functionality, compiling the needs associated with running the IT infrastructure, and bringing those together with the IT budget. This resulted in a prioritized spend for the upcoming planning period. 

Today, with a greater proportion of the IT spend originating in the individual business units, the balance of power has noticeably shifted, and the traditional governance organization no longer has the same level of authority. Therefore, the governance model – organization and processes – are faced with both adaption and adoption.

Wavestone US has identified the following key suggestions for the new-generation of IT governance:

1. Business leaders must take a more active participatory role. It is imperative they are a part of, and actively engaged, in the governance process.  They need to represent their parts of the business while also maintaining an appreciation for the priorities detailed in the enterprise’s strategic plan and make decisions in that context. 
2. The role of the governance body becomes one of ensuring the various business entities are implementing IT solutions that are complementary, company assets (i.e. data) are protected, the investment is aligned to expected benefits, and the risks are identified and mitigated. 
3. The CIO’s role becomes one of a key contributor of emerging technology opportunities, an arbiter of technology investment decisions, and an enforcer of standards designed to protect assets. While this paradigm may appear to mean the CIOs role has greatly diminished it, in fact, takes on new life. The CIO, in his new role, truly represents the needs and priorities of the overall enterprise.  The greatest challenge is changing the personal operating mode to one of facilitation and steering the governance organization to decisions that reflect those priorities.

A well thought-out governance model serves as a foundation to manage other disruptive trends affecting IT such as increased focus on social, mobility, big data and “bring your own device”.  When business leadership takes an active role and becomes exposed to the opportunities and risks these trends present, they are able to make better decisions for the enterprise and align more fully behind those decisions.

To learn more about what Wavestone US can do for your company, visit http://www.wavestone.us/capabilities/.