May 10, 2023

IT Governance Framework: A Guide for Enterprise Companies

Security & Compliance

IT governance is a formal way to integrate an IT strategy into an organization's business strategy. In this post, we’ll cover everything you need to know about it.

Nikesh Ashar

In today's digital age, most organizations rely on technology. All companies' communication, employee equipment, system access, and departmental SaaS stacks are tech-based. 

In fact, according to a McKinsey survey, technology is a driving force in business. 70% of businesses use hybrid or multi-cloud management technologies and tools, such as:

At this point, it's evident that IT leadership plays a pivotal role. They need to follow best practices when implementing, securing, and maintaining the usage of IT. 

Nevertheless, this requires creating clear procedures to mitigate risks, avoid penalties, identify underutilization, achieve business goals, and even increase ROI through these technologies.

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That's where IT governance enters the picture.

In today’s post, we'll cover everything you need to know about IT governance, including: 

  • What IT governance is
  • Why IT governance is critical for organizations
  • Top IT governance frameworks
  • IT governance best practices

Let's get started.

What is IT Governance?**

At its core, IT governance is a formal way to integrate an IT strategy with the business strategies of an organization. According to the ISO/IEC 38500:2015 standard, IT governance is "a system by which the current and future use of IT is directed and controlled."

IT governance ensures that IT investments support business goals and satisfy stakeholders' needs. It helps companies comply with data privacy regulations and achieve their goals by implementing formal frameworks.

Typically, companies focus on three essential processes for IT governance:

  • Setting clear goals: This involves identifying balanced objectives by evaluating stakeholders’ needs and options, assessing past performance, determining future goals, and evaluating the current operating environment.
  • Creating procedures: This involves establishing control over the organization through prioritization, decision-making, and control establishment. It involves creating strategies, policies, and internal control procedures.
  • Tracking performance: This involves monitoring performance and compliance with agreed-upon goals, creating compliance audits, and performance reports.

IT governance often falls under the board. But fast-growing and large organizations may delegate specific governance responsibilities to other structures, such as shareholders and audit committees.

Why is IT Governance Important?**

Overall, when we talk about IT governance, we're referring to evaluating, directing, and monitoring the company's IT management. IT governance is important for several reasons, including:

  • Solid data. It provides measurable results according to business strategies and goals.
  • Compliance & security. It ensures compliance with key legal and regulatory requirements, such as the General Data Protection Regulation.
  • Business growth. It analyzes current costs (determined by ROI) and their impact on the business.
  • Stakeholder confidence. Team members can feel confident that the tools they're using are safe.
  • Improvement. It evaluates current technology usage, identifies areas of improvement, and delivers tangible results.

It's evident that every organization, regardless of industry, should consider IT governance. However, implementing an IT governance strategy can be time-consuming. 

Luckily, there are IT governance frameworks that can facilitate the process. Developed by experts, these frameworks guide organizations to implement effective IT governance. In the next section, we'll take a look at the four most common IT governance frameworks.

Top IT Governance Frameworks** 

Now that you have learned what IT governance is and why it matters, you may be wondering what frameworks are all about. But before we go there, it’s fair to mention that while some frameworks are more commonly used than others (e.g. COBIT), there’s no one-size fits all. The right IT governance framework for you will depend on a wide variety of factors, including:

  • Your company's location
  • Your company's size
  • The type of work you do
  • The specific areas that require more guidance and improvement
  • Your company's goals 

Now, let’s cover the basics of the most popular IT governance frameworks, including:

  • ISO 38500
  • ITIL
  • Calder-Moir

ISO 38500:2015

The ISO 38500 standard provides guidance for company directors on managing and monitoring IT use. This standard is suitable for businesses of all sizes and aims to promote effective IT use across organizations. 

This is achieved by evaluating policies, planning a strategy, and monitoring compliance and performance of the IT strategy.

Overall, ISO 38500 helps stakeholders to:

  • Align by clearly establishing responsibilities for the IT area.
  • Plan effectively by planning IT integration while keeping company ROI in mind.
  • Invest in IT based on data by performing prior analysis and validation.
  • Set clear goals by ensuring IT practices are aligned with business goals.
  • Respect human behavior by verifying that IT adheres to current and future needs of those involved in the process.


ITIL is an international standard that outlines a framework for managing IT equipment while meeting business goals.

It consists of five key stages:

  1. Service strategy: Align IT strategy with overall business objectives. That way, you ensure the organization gains measurable value from its IT decisions.
  2. Service design: Ensure IT services strike a balance between costs, functionality, and performance. This approach helps meet business objectives while being fit for both purpose and use
  3. Service transition: Manage and control IT changes efficiently to achieve quick, low-cost, and high-value results. 
  4. Service operation: Ensure IT services are operated in a secure and reliable manner to meet business needs.
  5. Continual service improvement: Focus on improving the quality, efficiency, and effectiveness of IT services while reducing costs.


COBIT is a popular IT governance framework used by businesses. It supports companies in tackling challenges such as: 

  • Regulatory compliance
  • Risk management
  • Aligning IT strategy with organizational goals 

Besides, COBIT offers structured guidance for managing IT resources and processes effectively. Overall, this IT governance framework is a good choice for improving business performance through IT.


Calder-Moir is a particular approach because it combines multiple IT governance frameworks to help organizations boost benefits.

The Calder-Moir model offers practical guidance for practitioners and board members alike. It simplifies the process of managing IT governance, leading to improved decision-making and overall business success.

Our Holistic IT Governance Framework: 8 Best Practices**

In this section, we’ll dive into 8 best practices that will help you level up your IT governance. We recommend you to:

  • Set clear IT processes goals
  • Define stakeholders governance
  • Identify & monitoring your IT inventory 
  • Rationalize your IT stack 
  • Focus on risk management and cybersecurity
  • Draft your IT governance strategy 
  • Establish training programs
  • Continuously iterate 

Let’s take a look at each, shall we?

Set Clear IT Processes Goals

No strategy should start without clear goals. Thus, the first step is to identify your IT governance objectives as follows:

  1. Analyze and track success metrics for your business, by identifying relevant KPIs and commercial goals.
  2. Analyze which company goals need improved IT usage, based on previous insights.
  3. Understand how your company's IT governance aligns with these goals. For example, your goal might be to evaluate the usage and security policies of your SaaS tools to enhance employee performance.

Keep in mind that a solid plan is key. As a result, aligning IT with business objectives is essential to ensure your IT governance's long-term success and your company’s ROI growth

Define Stakeholders Governance

Once you have a clear understanding of your IT governance goals, you need to identify the key stakeholders involved. Here, it’s essential to have clear communication and update everyone on progress and responsibilities.

All in all, each IT team member should: 

  • Have a solid grasp of their responsibilities 
  • Understand how to collaborate effectively to achieve overall IT governance goals 

This way, you can outline clear expectations and provide regular feedback to your team. Additionally, it’s also crucial to involve departments other than IT during the governance process, such as Finance and HR. Why? It’s quite simple. 

Finance can help with IT budgeting and forecasting. Meanwhile, the HR team can gauge employee tech satisfaction and provide valuable insights into how your IT projects are impacting the company culture.

By putting all relevant stakeholders on the same page, you can ensure that: 

  • Your IT projects are working successfully 
  • Decisions are made based on up-to-date information 

Rationalize Your IT Stack

IT stack rationalization is a crucial step, as it defines your team’s efficiency in using its IT stack. During the rationalization process, you may get a few surprises, such as:

  • Duplicate technology or technology that’s not being used. 
  • Lack of concrete security measures associated with the NDA for certain technologies.

Of course, the details to consider will vary depending on the type of technology that needs more governance. 

As an example, in the case of companies’ SaaS stacks, it’s also crucial to consider integration points and their cost. Plus, typical factors of SaaS usage, such as unreported apps (also known as Shadow IT), must be taken into account. 

At this stage, it’s recommended to implement a software management solution that provides complete visibility of your SaaS tools and allows you to control and optimize subscriptions accordingly.

Focus on Risk Management & Cybersecurity 

When it comes to IT, it’s important to understand that there’re always potential risks. Thus, developing and implementing an IT governance strategy is crucial to mitigate them.

For instance, in the case of SaaS tools, compliance with regulations should be a top priority to ensure that customer, corporate, and team data is protected from potential cybersecurity attacks. This is particularly crucial for large companies, as the impact of a SaaS data breach can quickly spread and become severe.

To effectively manage the risks associated with your IT stack, we suggest you dedicate enough time and resources to:

  • Conducting regular security audits
  • Keeping software and hardware up-to-date
  • Providing ongoing employee training to promote good cybersecurity practices

By prioritizing risk management, you can avoid costly data breaches and other security incidents in the long run. And so, you can save both time and money.

Draft Your IT Governance Process 

Now you can draft the IT governance process based on the previous steps’ insights. 

A good way to begin drafting the policy is to: 

  • Establish an introduction that explains the purpose of the policy and its scope. 
  • Describe the roles and responsibilities of all parties involved in the policy. 
  • Explain specific procedures for the use and control of technology in each department and the importance of following them. 

Moreover, make sure that the policy is reviewed and updated regularly. That way, you can verify that it’s still aligned with the company's objectives and remains effective in controlling the ever-evolving technology.

Finally, remember that the policy should be written in clear and concise language. As a result, it will be easier for all parties involved to understand, ensuring that it’s effectively enforced.

Establish Training Programs

As an IT professional, you know too well the risks that come with poor IT governance. However, your team might not be on the same page. That's why everyone should get involved in developing and maintaining these IT governance policies.

Team members should how to use these technologies safely and efficiently. You can do the following:

  • Workshops. Host workshops periodically to remind everyone of the importance of sticking to privacy policies, and teach them how to use different tools.
  • Documents. Make sure there's a go-to place for information so employees can access it whenever they need it. 

You might be wondering, "Why bother with all this training?" Well, there are two big reasons: you don't want to risk data theft or loss, and you want your employees to be performing at their best.

Always Continue Iterating

As you already know, implementing a solid IT governance policy requires planning a series of actions throughout the entire technology lifecycle.

This includes:

  • Guidelines for acquiring technology
  • Guidelines for implementation
  • Guidelines on how employees should use technology

Remember, implementing the policy is just the beginning. You’ll need to continuously monitor and adjust the IT governance process. However, oftentimes companies face the challenge of keeping their technology inventory up to date.

When it comes to SaaS subscriptions, for instance, automating certain tasks is necessary to have full control of all tools. This includes:

  • Ensuring that confidential data is in the right place 
  • Controlling Shadow IT
  • Minimizing unnecessary expenses caused by duplicated or unused tools
  • Ensuring each employee has the right level of access to the necessary tools

Now, the questions are: What is the best way to automate the huge flow of information contained in this process? How can IT managers save time so they can focus more deeply on the IT governance strategy?

Improve Your SaaS Security Compliance With a SaaS Management Solution** 

In this post, we covered all you need to know to implement an IT governance process in your company. As you've seen, there are many factors to consider. Companies rely heavily on technology, so controlling equipment and measuring its effectiveness and security against business goals can be a challenging task.

This is especially true with SaaS tools. These tools are used in all aspects of a company, and if they malfunction, they can cause delays in processes and decrease employee productivity. And, most importantly, they can put the security of the entire company at risk. This is where Cledara can help.

Cledara is a SaaS management platform that lets you:

  • Manage all SaaS subscriptions on a single screen
  • Identify unnecessary tools and unsubscribe with a single click
  • Eliminate hidden costs and shadow IT
  • Set an approval workflow for software purchases
  • Make sure your tools comply with regulations
  • Keep your data secure by checking that all your suppliers have the right security measures in place
  • and more

Curious? Schedule a demo with Cledara today.

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Nikesh Ashar

I currently look after Quality Assurance and IT at Cledara. Having built a robust QA process and now a team, we work with Product and Engineering to make sure that our software is robust and well tested.

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