Introduction to IT Governance
It is clearly perceived in the vocabulary of managers, whether from the IT area or not, that the term “Corporate Governance” is increasingly popular and has gained much importance.
According to the IBGC (Brazilian Institute of Corporate Governance), Corporate Governance is “the system by which organizations are directed, monitored, and incentivized, involving relationships between owners, the board of directors, management, and control bodies. Good corporate governance practices convert principles into objective recommendations, aligning interests with the purpose of preserving and optimizing the organization’s value, facilitating its access to capital, and contributing to its longevity.”
This means that Corporate Governance depends entirely on the company’s management model, and also on the way this management is being conducted and supervised.
When governance practices are well utilized, the benefits are quite clear: Better controls and decisions in top management and a reduction in the cost of capital through increased investor confidence. Corporate Governance is also recognized as essential for companies to increase their visibility, strengthening shareholder confidence through an image of control, transparency, and predictability.
Bearing in mind major economic and social disasters such as the Enron, Worldcom, and Tyco cases, not only Corporate Governance, but the proper use of it has become a recurring topic in discussions among both large and small companies, while its misuse has become the plot of documentaries, dramas, and even comedies.
We cannot fail to mention the case of poor management, and consequent terrible governance, which is already on the tip of every Brazilian’s tongue: Banco PanAmericano. Several factors negatively influenced the failure of Banco PanAmericano, ranging from a lack of integrity in top management, through a total failure in risk management, and culminating in deficiencies in competence, morals, and ethics of some of those involved.
Knowing what Corporate Governance is, its benefits, and also the consequences of its misuse, we can ask ourselves: What is the role of IT in this scenario?
Corporate Governance is composed of six main assets, namely: (1) Human, (2) Financial, (3) Physical, (4) Intellectual Property, (5) Relationship, and (6) Information Technology (IT);
To think about IT Governance, we must take into account that a company’s business area is backed by IT Applications, which in turn depend on the entire IT Infrastructure, and that this information must be – always – reliable.
This is in accordance with the definition by Professor João Peres (FGV), who tells us that IT Governance is “a set of structured practices, standards, and relationships undertaken by executives, managers, technicians, and IT users of an organization, with the purpose of ensuring effective controls, expanding security processes, minimizing risks, enhancing performance, optimizing resource application, reducing costs, supporting better decisions, and consequently aligning IT with the business.”
To ensure the proper use of IT Governance, and consequently of Corporate Governance as a whole, numerous frameworks and tools have been created, among which we can highlight:
It is worth remembering that the mere adoption of one of these tools or frameworks does not guarantee the success and effectiveness of Governance itself. To take full advantage of Governance principles, one must choose among all available options which ones address best practices and also which items will be most adherent to the business, culture, and identity of the organization while adding value and bringing greater benefits to the company.
Quite a few companies are already taking advantage of good IT Governance practices; thirteen case studies can be read in Good Governance Case Studies, and we can also cite the following corporations: Microsoft, Xerox, GE, HSBC, Embratur, ANP, TSE, and Teclógica.
Teclógica invests massively in IT Governance and has been reaping the good fruits of these investments, holding CMMi-SW and CMMi-SVC certifications, both at level 2, being the first 100% Brazilian company to implement CMMi-SVC, and also a pioneer in version 1.3 of the model. In addition, Teclógica adheres to other good IT Governance practices, such as ITIL and PMBOK.
In future articles, we will discuss more specifically each of the Governance tools and their application in the current IT market.
Jonatan Neves
Systems Analyst
