IT governance in a flat world

In today's world when IT has become an integral part of the business and plays fundamental role to support, sustain and grow it, IT governance, which is considered as a subset of Corporate Governance is also being stressed upon by the executives in every organization. Its importance can be understood and judged by the fact that corporate information can be accessed / leaked / lost or deleted at a click of a button be it through e-mail or through hacking of IT systems of an enterprise.

IT Governance assumes further significance not only because of the pervasive use of IT in almost every industry but also because to compete, cut down on their costs and provide better services to its customers most of the organizations resort to outsourcing or off-shoring of their non-core activities including IT & ITES operations. This strategy of outsourcing / Best-shoring brings in operational efficiencies and naturally hedges country and currency risk but it creates a complex web of work being executed in chunks and pieces from various parts of the world thus making the IT systems and information vulnerable. Organizations can outsource their operations but final accountability still lies with the business that cannot be outsourced. Thus to manage its assets in a better manner and control the outsourced/off-shored work properly, every organization should have a solid IT governance plan in place.

Defining IT Governance

IT governance provides a framework - which not only helps companies align their IT strategy with Business Strategy but also reduce operational risks i.e. of non-compliance, infrastructure management etc. thus helping organizations manage their assets in an appropriate manner and also realize better ROI over their investments in IT.

Keeping in mind the above definition of IT Governance, A successful IT Governance implementation should cover the following:

• Alignment of IT strategy with the Business strategy thus helping  realize the overall goals of an enterprise. In a sense make IT an enabler for the organization.
•  Provide a basic framework / infrastructure to control and manage² business in a flat world.

Why is IT Governance required?

Top management of successful enterprises realize the significant impact that IT can have on the success of the enterprise and make substantial investments in IT to be competitive and stay ahead of the curve. But because of the ever-changing nature and new developments in IT, Organizations over a period of their existence accumulate a number of IT assets in various technologies. These assets like other tangible assets have a life span and should be retired in due course of time as better and efficient processes evolve with newer technologies. At times companies lose track of their assets and realize the issue once the problem has snowballed and starts consuming huge amount of resources of the organization. It is then that the companies realize the importance of IT Governance, whereas this problem would never have occurred if proper governance plan were in place. So instead of undertaking a huge task of consolidating all the assets and cut down on the costs, A framework which continuously evaluates various assets that a company owns and their validity / usability is required to ensure that company is not maintaining dead assets and drowning money.

In addition organizations should also understand that with benefits like productivity and efficiencies, IT also brings along various risks. These risks should be covered and managed through an IT Governance framework so as to exploit the benefits of IT to fullest. A proper IT Governance framework is also required for top management to know/understand if its IT department is working towards achieving the goals of the enterprise and whether it is resilient enough to learn and adapt to the changing needs of the enterprise.

Other factors that are making IT governance a must in today's world are as follows:

• Transparencies of enterprise
•  Protection of shareholder value
•  Unrealized ROI
•  Outsourcing leads to loss of control
•  Decentralized Organization requires a framework immediately

Having mentioned all the benefits or necessities as to why IT governance is required, one should also be aware about the other side of the coin i.e. Controls and framework provide good control over the resources of the organization but also reduce organization's ability to quickly react to changing scenarios. Thus care should be taken to not to overdo compliance and governance in any organization thus maintaining a fine balance between compliance and agility.

The author is Chief Technical Officer, Infogain Corporation