IT Governance

IT governance is composed of the processes, reporting relationships, roles, and committees that an organization develops to make decisions and manage their IT resources and activities. IT governance focus on five areas : risk management, value delivery, strategic alignment, performance measurement, and resource management. "IT governance is a continuous life cycle that can be enter at any point"( IT Governance Institute, 2007, p.5).

The five focus areas of IT governance

1. Risk management

The Enterprise risk may come in many varieties. The management board should manage the risk by determining the significant risk to the enterprise, risk taking or risk avoidance policy. " Effective risk management begins with a clear understanding of the enterprise’s appetite for risk and a brainstorming session on the high-level risk exposures of the enterprise"( IT Governance Institute, 2007, p.6).

2. Value delivery

IT value is focused on the on-time and within budget delivery of appropriate quality. Both the actual costs and the return on investment need to be managed to achieved the effective IT value delivery. "In business terms, this is often translated into competitive advantage, elapsed time for order/service fulfillment, customer satisfaction, customer wait time, employee productivity and profitability" ( IT Governance Institute, 2007, p.5).

3. Strategic alignment

IT alignment focus more than more than strategic integration between the IT organization and the enterprise organization. The IT strategic alignment is about continue moving in the right direction and being better align than competitors. " Management must consider business objectives; the competitive environment; and current and future technologies, including the costs, risks and benefits they can bring to the business" ( IT Governance Institute, 2007, p.5).

4. Performance measurement

Performance measurement use a balance scorecard to translate IT strategy into action. This scorecard will focus on financial perspective, customer perspective, internal process perspective, and learning perspective. " By using the balanced scorecard, managers rely on more than short-term financial measures as indicators of the company’s performance. They also take into account such intangible items as level of customer satisfaction, streamlining of internal functions, creation of operational efficiencies and development of staff skills " ( IT Governance Institute, 2007, p.6).

5. Resource management

Resource management is a key to successful in IT performing. The growth of enterprise depend on the optimal investment and the use and allocation of IT resources included people, applications, technology,facilities, and data. " Of all the IT assets, human resources represent the biggest part of the cost base and, on a unit basis, the one most likely to increase"( IT Governance Institute, 2007, p.8).