All organizations, whether private or public, for profit or not for profit, commercial or NGO, exist to create value for their stakeholders. This is about realising benefits which might be financial for commercial enterprises or public service for government departments.
Creating value is therefore also a governance objective and one that COBIT 5 is very clear about describing. Firstly we have to recognize our stakeholder’s needs because creating value for different stakeholder groups can mean different things – sometimes conflicting. Our stakeholder value interests must be considered when we make benefit, risk and resource assessment decisions. Sometimes this will mean that we need to negotiate and decide how to approach supporting these interests but more so how we should balance our resources to provide the optimum value.
COBIT 5 defines the three components of value creation as:
- Benefits realization
- Risk optimization
- Resource optimization
As we identify and make decisions concerning these 3 components we should ask the following three related questions:
- For whom are the benefits?
- Who bears the risk?
- What resources are required?
Managing these three components while considering how we deliver on our stakeholder’s needs will help us meet COBIT 5’s governance objective of value creation.
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