Mike Lane discusses how using COBIT 5 can help with enterprise goals within the organization to deliver value through effective governance and management.
Perhaps one of the most talked about Information Technology (IT) goals in the 21st century has been ‘Alignment of Business and IT Strategy”. Look at the balance scorecard of the IT function of any modern Enterprise and you are more likely to find that goal than any other. And it makes perfect sense, after all why would an IT Strategy exist that was not created to enable, support and align to the strategy of the Enterprise? So what is the driver for the IT goal of aligning business and IT strategy? Simply stated – the goals of the Enterprise. It goes without saying nowadays how essential the role of IT is in the achievement of Enterprise goals.
Every Enterprise, no matter what type or industry, exists to create value for its stakeholders, be this profit or not-for-profit. This focus on the continuous creation of sustainable value to meet stakeholder needs is not something that is achieved incidentally from the operations of the Enterprise. Without goals, there isn’t an Enterprise alive that will satisfy stakeholders, deliver on its mission or reach its vision, and so the need for Enterprise goals becomes paramount.
The World Cup may have finished, but here we are still talking about goals…Enterprise goals, IT goals… so you may already be asking yourself, “What are these? How do they map to each other? How do I keep score?”… This is where COBIT 5 comes in, the business framework for the governance and management of Enterprise IT. Governance tells us that for its primary governance objective of value creation, organizations must ensure that benefits are realized and risks and resources optimized to meet stakeholder needs. And to achieve this we have already learned that Enterprise goals are critical success factors. In an IT context, just as IT Governance is in place to help the organization reach its Enterprise Governance objectives, so too must there be IT goals defined, driven by the Enterprise goals of the organization. After all, what better way to our IT and Enterprise strategies than through the use of goals!
Facing the challenge of setting IT goals can be daunting, never mind aligning these upstream to the goals of the Enterprise, and additionally setting downstream goals to enable their achievement. Fortunately, this is where COBIT 5 strikes again, and scores! COBIT 5 is well equipped and positioned to assist, providing a comprehensive Goals Cascade as the mechanism to translate the needs of stakeholders into specific, actionable and customized enterprise goals, then translate these IT-related goals into enabler goals to empower the organization to achieve these. Sounds easy enough, well, it can be.
For those unfamiliar with COBIT 5, what is important to mention is that at the core of COBIT 5 are five principles. Principle 1 is ‘Meet Stakeholder Needs’, and it’s no surprise that this is where the Goals Cascade resides. We all know that meeting stakeholder needs requires a skilled balancing act between realizing benefits, consuming resources and minimizing risk.
The COBIT 5 Goals Cascade starts by identifying the Stakeholder Drivers, a key one and particularly relevant in the IT context, being Technology Evolution. It is these internal and external environmental drivers, shaped by changes in strategy, regulatory environments, technologies and so forth, which ultimately go on to influence and shape the demands and needs of the Enterprise’s stakeholders. Stakeholder Drivers Influence Stakeholder Needs.
From there, Stakeholder Needs Cascade to Enterprise Goals. This is where the needs of all stakeholders are represented in the shape of goals for the organization. This representation takes the form of a balanced scorecard (BS) for the Enterprise, where 17 generic COBIT 5 goals for the Enterprise are organized into the four BS dimensions – Financial, Internal, Customer, Learning and Growth. With the goals of the Enterprise clearly defined, the rest of the organization, and in our case specifically IT, can now align itself and it’s functional goals to these.
In the age of information and technology, the achievement of Enterprise goals in the organization is largely dependent on the achievement of the IT goals they drive. And this is why Enterprise Goals Cascade to IT Related Goals. The IT goals of the organization are set and mapped to the goals of the Enterprise, ensuring the overarching alignment of IT to Business strategy, which as I noted at the beginning, is in fact a key and primary goal of IT. As with Enterprise goals, IT goals are too organized across the four IT-BSC dimensions.
The last component of the COBIT 5 Goals Cascade is where IT-related Goals Cascade to Enabler Goals. Without enablers in the organization, the means to achieve the IT goals, and therefore the Enterprise goals, are not in place. When we talk of enablers in COBIT 5 there are seven – Principles, Policies and Frameworks; Processes; Organizational Structures; Culture, Ethics and Behaviours; Information; Services, Infrastructure and Applications; and People, Skills and Competencies. Together, these enable the achievement of the IT goals.
We can clearly see that COBIT5 supports value creation through the use of IT and allows one to transform stakeholder needs into an actionable strategy and goals. This ‘mapping’ of needs to goals is the key to supporting alignment between an enterprise’s goals, driven by stakeholder needs, and IT services in place to achieve the IT goals of the organization. COBIT 5 provides a comprehensive framework, including a flexible and customizable Goals Cascade, which assists enterprises to set and achieve both their Enterprise and IT goals and deliver value through effective governance and management of enterprise IT. Next time you’re planning on setting IT goals, be sure to get your hands on the Enterprise goals of your organization first, and if there aren’t any, why not turn to the Goals Cascade and introduce COBIT 5 into your enterprise!
Read more about COBIT 5 and Enterprise goals in an IT Context by downloading this free white paper by Mike Lane >>