A characteristic theme of IT governance discussions is that the IT capability can no longer be a black box. The traditional involvement of board-level executives in IT issues was to defer all key decisions to the company's IT professionals. IT governance implies a system in which all stakeholders, including the board, internal customers, and in particular departments such as finance, have the necessary input into the decision making process. This prevents IT from independently making and later being held solely responsible for poor decisions. It also prevents critical users from later complaining that the system does not behave or perform as expected, as explained in the Harvard Business Review article by R. Nolan:
There are narrower and broader definitions of IT governance. Weill and Ross focus on "'''Specifying the decision rights and accountability framework to encourage desirable behaviour in the use of IT.
In contrast, the IT Governance Institute expands the definition to include foundational mechanisms: "… the leadership and organisational structures and processes that ensure that the organisation’s IT sustains and extends the organisation’s strategies and objectives."
While AS8015, the Australian Standard for Corporate Governance of ICT, defines Corporate Governance of ICT as "The system by which the current and future use of ICT is directed and controlled. It involves evaluating and directing the plans for the use of ICT to support the organisation and monitoring this use to achieve plans. It includes the strategy and policies for using ICT within an organisation."
The discipline of information technology governance derives from corporate governance and deals primarily with the connection between business focus and IT management of an organization. It highlights the importance of IT related matters in contemporary organizations and states that strategic IT decisions should be owned by the corporate board, rather than by the chief information officer or other IT managers.
The primary goals for information technology governance are to (1) assure that the investments in IT generate business value, and (2) mitigate the risks that are associated with IT. This can be done by implementing an organizational structure with well-defined roles for the responsibility of information, business processes, applications, infrastructure, etc.
Decision rights are a key concern of IT governance, being the primary topic of the book by that name by Weill and Ross. According to Weill and Ross, depending on the size, business scope, and IT maturity of an organization, either centralized, decentralized or federated models of responsibility for dealing with strategic IT matters are suggested. In this view, the well defined control of IT is the key to success.
After the widely reported collapse of Enron in 2000, and the alleged problems within Arthur Andersen and WorldCom, the duties and responsibilities of the boards of directors for public and privately held corporations were questioned. As a response to this, and to attempt to prevent similar problems from happening again, the US Sarbanes-Oxley Act was written to stress the importance of business control and auditing. Sarbanes-Oxley and Basel-II in Europe have been catalysts for the development of the discipline of information technology governance since the early 2000s. However, the concerns of Sarbanes Oxley (in particular Section 404) have less to do with IT decision rights as discussed by Weill and Ross, and more to do with operational control processes such as Change management.
Following Corporate Collapses in Australia around the same time, working groups were established to develop standards for Corporate Governance. A series of Australian Standards for Corporate Governance were published in 2003, these were:
AS8015 Corporate Governance of ICT was published in January 2005. It was fast-track adopted as ISO/IEC 38500 in May 2008.
Nicholas Carr has emerged as a prominent critic of the idea that information technology confers strategic advantage. This line of criticism might imply that significant attention to IT governance is not a worthwhile pursuit for senior corporate leadership. However, Carr also indicates counterbalancing concern for effective IT risk management.
The manifestation of IT governance objectives through detailed process controls (e.g. in the context of project management) is a frequently controversial matter in large scale IT management. See Agile methods. The difficulties in achieving a balance between financial transparency and cost-effective data capture in IT financial management (e.g., to enable chargeback) is a continual topic of discussion in the professional literature, and can be seen as a practical limitation to IT governance
There are quite a few supporting mechanisms developed to guide the implementation of information technology governance. Some of them are:
Non-IT specific frameworks of use include:
Certified in the Governance of Enterprise Information Technology (CGEIT) is an advanced certification created in 2007 by the Information Systems Audit and Control Association (ISACA). It is designed for experienced professionals, who can demonstrate 5 or more years experience, serving in a managing or advisory role focused on the governance and control of IT at an enterprise level. It also requires passing a 4-hour test, designed to evaluate an applicant's understanding of enterprise IT management. The first examination will be held in December 2008.