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The continuous development of new IT technologies (Information Technology) has resulted in the need for their rapid integration in organizations and, therefore, the emergence of a new challenge such as the structural redefinition of the IT component to create added value and minimize IT risks through efficient management of all the organization's IT resources.
These changes have a great impact on the governance system of the IT component, and therefore the need arises to establish an IT governance audit methodology within organizations. An audit can be considered a risk-based strategy, which allows the auditor to analyze from the best possible angle the efficiency and effectiveness of the IT governance structure.
The acclaimed benefits induced by the IT component are balanced with relevant new IT risks. The rapid pace of technological change demands timely IT decisions with a deep understanding of the risks and opportunities associated with IT phenomena.
The management of organizations faces a new challenge: the structural redefinition of the IT component to create added value and minimize IT risks through efficient management of all the organization's IT resources.
The evolution of today's IT environment is a natural process to which the business environment must adapt. In this way, you must integrate the best techniques and tools to provide transparency and relevant data to reveal, for example, what the priorities are in the development of IT projects and investments to meet the objectives of the organization and create value. added to the organization.
IT Governance uses the premises of corporate governance, which extend into the IT area. This fact guided the directorates of the organizations to implement processes and structures that allowed the organizations to support the objectives and strategies through the IT component.
IT auditors are in charge of evaluating the efficiency of IT Governance, and the degree of implementation of this procedure. IT auditors (independent or within the organization) can perform several key roles, such as:
Implementation of IT governance programs: explain IT governance and its value to management;
Current State Assessment: Advise and assist with current state assessments, gap priorities.
Planning of IT governance solutions.
Monitoring of IT governance initiatives.
Help IT governance run as usual: Provide factual and constructive feedback, encourage self-assessments, and provide assurance to management that governance is working effectively.
IT governance framework
We could align the governance processes into three groups: Business Governance, Corporate Governance and IT Governance.
Corporate Governance could be defined as the set of responsibilities and practices exercised by the board of directors and executive management with the aim of providing strategic direction, ensuring that objectives are achieved, verifying that risks are adequately managed, and verifying that company resources are used responsibly.
Corporate Governance, could be defined as the ethical behavior of directors or other government officials in the creation and preservation of the wealth of all shareholders.
IT Governance is an integral part of enterprise governance and consists of the leadership and organizational structures and processes that ensure that the organization's IT sustains and extends the organization's strategy and objectives. IT governance is the responsibility of the board of directors and executive management. IT governance is the organizational capacity exercised by the board of directors, executive management, and IT management to control the formulation and implementation of IT strategies and thus ensure the fusion of business and IT.
IT governance reflects broader corporate governance principles while focusing on the management and use of IT to achieve corporate performance objectives. Because IT results are often difficult to measure, companies must assign responsibility for the desired results and assess how well they achieve them. IT Governance should not be considered in isolation because IT is linked to other key company assets (financial, human, intellectual property, etc.).
IT Governance Focus Area
In practice, IT Governance supports the business, adding value through IT components and minimizing IT risk. To achieve such purposes, IT Governance must cover the five main vision domains of ISACA (Information Systems Audit and Control Association):
1. Align IT strategy with business strategy
This first domain of IT Governance has as its starting point the design of an IT strategy in accordance with the general strategy of the organization. Therefore, based on the organization's strategic plan, the IT strategy committee must establish an IT strategy in line with business objectives. In particular, IT governance practices should:
Ensure that the IT strategy is aligned with the business strategy.
Ensure IT delivers on strategy through clear expectations and measurements.
Allocate IT investment budgets in accordance with business objectives.
Ensure that technology investment decisions are aligned with business objectives.
Provide high-level direction to create competitive advantages parallel to compliance processes.
Ensure a culture of openness and collaboration between the business, geographical and functional units of the company.
2. Value delivery
Based on the premises of corporate governance, and that a company should aim to maximize the value of its shares in the long term, the implementation of new computer techniques should add value to the organization due to the quality of services, optimization of expenses, supply of pertinent and useful data delivered in a timely manner. IT value delivery is defined as "delivering on time, on budget, and delivering promised benefits" without sacrificing profitability.
IT Governance should aim at adequate quality of IT services by combining budget resources and time factors.
Governance practices for IT value delivery are:
Make sure IT plans are progressing on schedule.
Guarantee the integrity, quality, and security of IT investments.
Monitor IT investments for adequate returns.
Guarantee financeable benefits through IT services.
3. Resource management
IT resource management deals with the management of IT resources and the organization of IT infrastructure within a corporation. This critical dimension of IT Governance processes is intended to provide high-level direction for the provision and use of IT resources, oversee aggregate IT funding at the enterprise level, and ensure that adequate capacity and infrastructure are in place for IT to support the current business and that expected in the future.
An important aspect to consider at this point is the issue of project management. The management of new IT projects must be properly governed, as these projects have a considerable impact on the financial position and strategic direction of the organization.
Governance practices for IT resource management are as follows:
Allocate IT resources in correlation with business priorities.
Implement appropriate controls.
Maintain adequate investment in education, development, and training of staff for IT operations and developments.
4. Risk management
Specialized authors define risk management in their writings as "the process of identifying vulnerabilities and threats in an organization's framework, as well as designing procedures to minimize their impact on IT resources." Organizational-level risk cannot be eliminated; it will exist all the time; The management of the organization is responsible for minimizing it to an acceptable level.
Risk management should be a continuous process that begins with the assessment of the organization's level of exposure and the identification of the main incident risks. Once identified, the risks must be minimized using a control procedure, and finally, the residual risk must be adjusted to an acceptable level.
We will underline that governance practices for IT risk management are:
Analyze and assess IT risks.
Monitor the efficiency of internal controls.
Implement the necessary controls to minimize IT risks.
Implement procedures to determine transparency regarding significant risks for the company.
Consider that a proactive approach to risk management can create a competitive advantage
Insist that risk management be integrated into the operation of the company.
Ensure that management has implemented information security processes, technology, and assurance to ensure that:
Business transactions can be trusted
IT services are usable, can adequately resist attacks and recover from failures
Critical information is hidden from those who should not have access to it.
5. Performance measurement
Performance measurement is concerned with determining whether IT systems have achieved the goals set by management and senior management. For IT performance measurement, IT governance practices must:
Define measures together with management to verify that the objectives are achieved.
Measure IT performance through metrics and appropriate indicators.
When implementing the IT Governance Framework, any organization must balance internal factors with relevant external factors, such as:
Technological development: The rapid development of the domain requires that IT-related decisions be made in a timely manner, with full knowledge of the risks associated with IT challenges.
Tax scrutiny: Large IT projects necessitate costly expenses that sometimes raise questions and liability for discretionary waste of financial resources.
Innovation and control over IT: In cases where innovation (new IT projects) is supported by IT, it can work against the objective of exercising control over the IT environment.
Up-to-date infrastructure: Technology infrastructure becomes outdated over time. Keeping it updated is essential for all departments.
In conclusion, we can state that government practices associated with the five fundamental domains are material factors in the decision-making process. Following self-imposed goals, IT Governance aligns IT investments with business objectives, ensures responsible use of IT resources, and ensures that IT performance is within the limits of the approved budget and plan.
By following these five principles, IT governance provides IT risk mitigation through continuous scrutiny of system threats and weaknesses and improves IT organizational performance, compliance, staff development, and outsourcing initiatives.
Lawyer Maria Alejandra Tuozzo
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