In the current age where online businesses and resources are booming, digital transformation is the go-to strategy for success. Even value creation for stakeholders is now driven by a high degree of digitization in business models, efficient processes, and successful innovation.
As information and technology have become the backbone of products and services, the need for having a strong framework to govern and manage both these components has also become imperative.
Regulators, Business, and IT Management now fully realize that the best value cannot be delivered unless an enterprise is effectively governed and managed.
As a result, they emphasize formal IT governance and management frameworks based on globally recognized best practices like COBIT, ITIL, ISO 27001, etc. These frameworks address both governance and service management aspects of an enterprise.
However, there is a problem.
The terms IT Governance and IT Service Management tend to be used interchangeably. This results in a confusion regarding the scope and roles of both.
While both are used together, they cover two completely distinct verticals. Therefore, it is imperative to understand what each term means and differences.
What is IT Governance?
One of the most agreed-upon definitions of IT governance is “the processes that ensure effective and efficient use of Information and Technology (I&T) in enabling an organization to achieve its goals.”
As an integral part of enterprise governance, IT governance consists of organizational structures, leadership aspects, and processes that ensure the extension and maintenance of organizations’ strategy and objectives.
The main benefit of having governance is value creation. Value is created when:
- Anticipated benefits of services, programs, projects are realized;
- Different risks of types pertaining to the business are optimized; and
- The use of available resources is optimized.
This is the role of governance. It evaluates, directs, and monitors plans, benefits, risks, and resources to ensure value delivery to its stakeholders.
IT governance further ensures the alignment of IT with organizational goals and strategy, improved compliance, reduced IT risk, optimized IT operations, and increased performance visibility.
What is IT Service Management?
IT service management (ITSM) encompasses all the activities involved in planning, designing, transitioning, delivering, and continually improving IT services.
Often limited to the term ‘IT Support’ or ‘Service Desk’, ITSM goes beyond day-to-day incident management and service request fulfillment.
Implementing an IT Service Management System can formalize all practices by establishing roles and responsibilities, policies, and procedures.
This results in more structured planning, designing, and delivering. Moreover, it saves costs by adding predictability and delivers actionable insights to improve decision making.
Roles of IT Governance and IT Service Management
To help you better understand these roles, here’s a look at an organization’s hierarchy.
- IT Governance or the Governing Body sits at the top of the hierarchy. Its major deliverable is Value Delivery to stakeholders. Further, it sets direction for the Management to establish management and operational objectives.
- IT Service Management takes direction from the top, establishes service management objectives, and manages services through practices shown in the above diagram.
IT Governance vs. IT Service Management
In addition to the illustration above, the following table will make it easier for you to understand the differences between the two.
IT Service Management
|Sits at the top of the hierarchy||Works under the Governing Body|
|Sets direction by reviewing and approving a policy and operational framework||Understands direction, instructs, and aligns its services and outcomes with the approved policy and operational framework|
|Delegates authority and responsibility by establishing formal structures and ensures that roles and responsibilities are defined and allocated||Assumes authority and approved service management responsibilities|
|Establishes enterprise goals in line with business vision and strategy||Establishes IT service management goals in alignment with enterprise goals|
|Ensures benefits realization through approved services portfolio, program, and projects||Aligns, plans, organizes and delivers benefits to consumers and other stakeholders through efficient service delivery management|
|Ensures risk optimization by approving acceptable risk thresholds and enterprise risk management framework, as well as by accepting residual risks||Identifies and manages services related risks according to enterprise risk appetite|
|Ensures resource optimization by ensuring that required resources and capabilities are available on time and being utilized||Identifies, aligns, plans, and organizes required people, process, technology, and vendor resources|
|Monitors performance||Builds acquire and implement products and services by using the above resources|
|Establishes service level targets at the functional level and with consumers through OLAs and SLAs respectively|
|Designs and offers services; monitors performance, resolves problems and issues and fulfills requests|
|Monitors, assesses, and evaluates the performance of services; takes corrective actions, and reports to the governing body|
|Is accountable to stakeholders||Is accountable to the governing body|
|Governance system can be tailored according to enterprise needs||Services are designed and delivered as per consumers’ expectations|
|Its relevant best practice framework is COBIT 2019||Direction can be obtained from COBIT 2019, while a tailored service management system can be designed by referring to ITIL 4 and ISO 20000.|
|IT strategy committee or IT board committee, possibly overseen by a member of the board of directors, is accountable for IT governance|
The CIO or IT Head is usually part of this committee but does not head it
|CIO is usually accountable for IT service management|
Various IT teams under the CIO are responsible for coordinating and delivering IT services to their users.
Use of COBIT for IT Governance and ITIL for Service Management
COBIT®2019 is the framework generally used for IT governance despite also covering IT management aspects to a certain extent. COBIT is designed to aid management by allowing them to comprehend risks and benefits management, and their link to information and technology.
COBIT creates a connection between the business objectives of an enterprise, the IT involved, and IT management tasks via statements regarding control objectives.
On the other hand, ITIL®4 is an IT service management framework that introduces a service management working model in the name of the Service Value System (SVS). The SVS includes principles, governance, service value chain, practices and continual improvement components.
ITIL also covers 34 practices that aim to empower organizations to effectively plan, design, transit, operate, and continually improve the value of its services system.
Further, ITIL 4 focuses on utility and warranty to deliver value to its consumers.
Need to Discuss Your Organization’s IT Governance and/or ITSM Needs?
Business Beam has over a decade of experience in IT governance and IT service management consultancy. From identifying your requirements for implementing solutions, our consultants have helped local and global organizations achieve their goals effectively.
Contact us for more information.