All You Should Know About IT Governance in Telecom

What do you know about IT Governance? Not much? About a month ago, it was another buzzword that didn’t speak to me. As it turned out, this framework is one more way to achieve mutual understanding between techies and business stakeholders. Remember the perennial discussion “Who should be the main decision maker” where business leaders and tech people hog the covers. Of course, tech achievements are powerless without the business purpose they support. So, the IT governance institute was created to ensure that specific business goal backs up each tech initiative.

Scroll down to discover more about IT Governance as a critical approach to ensuring better business outcomes. Learn more about telco companies applying it as a basis for their innovations and digital transformation.

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What’s IT Governance: General Overview

“We define IT governance as the framework for the leadership, organizational structures and business processes, standards and compliance to these standards, which ensures that the organization’s information system support and enables the achievement of its strategies and objectives.”

Alan Calder, IT Governance Pocket Guide

IT Governance is a 20-year approach to helping companies deliver better tech results. However, even now, it’s hard to understand its core tasks and meaning for businesses, particularly for communication service providers.

So, IT Governance is a middle-level management layer unifying corporate Governance and IT segment management. It’s the system of relations, politics, and processes created to optimize IT activity and make it work in favor of business.

Somebody includes it in the corporate governance system, and this approach is also correct since IT should usually meet business needs and requirements to remain efficient and performant.

The core task of IT governance is to gather all tech and business side stakeholders under one roof to make them move in one direction. Among others, this framework helps:

• track investment in the IT area to make sure it’s reasonable and enough to achieve business-oriented goals

• ensure cybersecurity and data protection

• minimize risks related to software development

• build processes allowing to reach better IT department performance

• show measurable results and increase ROI

IT Governance is a sort of intermediary between tech and non-tech team members helping business leaders eliminate the mess in processes and remain on the same page with the IT department.

So, you might reasonably ask how companies implement and comply with it and where its principles are defined. The case is IT governance approach is supported by several acts, frameworks, and regulations helping businesses to coordinate actions and track their performance in this field. Among them are:

• The International IT governance standard - ISO 38500

• The Information Technology Infrastructure Library (ITIL) framework

• Control Objectives for Information and Related Technology (COBIT) framework

• Calder-Moir IT Governance Framework

• The Clinger-Cohen Act of 1996

• Sarbanes–Oxley Act of 2002 (SOX)

IT Governance is a compulsory requirement for most companies to control IT processes and results of activities. It allows business leaders and state authorities to be aware of the nature of software development and achievements in each business field.

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How Telco Companies Comply with IT Governance Standards

Now, each business is a digital service provider first. Just remember companies like 7-Eleven, Starbucks, or Bosch. It’s hard to name them only a convenience store chain, a cafe, or a manufacturer. Due to the IT-driven approach, they managed to transform business models and provide customers with even more value. This peculiarity supports the leadership and popularity of these brands.

But what about telecom companies? This segment is highly competitive. It requires its players to launch additional services and provide more value regularly to stay afloat. So naturally, communication service providers mastered the IT governance principles a long time ago to regulate IT sector activity as a primary engine of their development.

Try to find any report by a telco company showing its attitude towards this question, and you won’t. Usually, enterprises share information about corporate Governance. Meanwhile, IT governance principles are left behind the scene since they support a competitive advantage. However, each large telecom company strictly complies with IT governance standards and has special departments driving this activity.

In the IT governance area, telecom companies are performing several core tasks:

• IT budget management (Vodafone)

• Processes definition and management (Vodafone)

• Improvement and coordination of IT processes by SOX and ITIL (Lifecell)

• Processes performance management (Lifecell)

• Management of service requests that require global clearances (Verizon)

• Cooperation with IT, business sponsors, legal and IT security departments (Verizon)

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In the telecom industry, business attention is focused precisely on IT budget management and setting up new processes. For example, in 2022, Vodafone spent $46,402 mln. A significant part of these resources covered IT expenses because the company launches new tech-oriented services regularly. To prevent over budget and achieve reasonable investment, the business control this area using IT governance principles.

One more priority for telecom companies is also data protection. They process terabytes of sensitive customer data. Any leak creates a significant risk of penalties and loss of brand reputation. Of course, communication service providers have separate departments controlling this issue. Still, they must also comply with IT governance principles since data protection is another area of its regulation.

The Bottom Line

IT Governance is an essential part of innovative and responsible business activity, just like corporate Governance. Most companies are obligated to follow its standards to control IT processes and the nature of software development. Telecom companies are trying not to spread the information regarding IT Governance since it can be a sort of confidential information disclosure. However, large players like AT&T, Verizon, Vodafone, and Lifecell pay attention to this regulation since it allows them to remain on the same page and run IT development strategies consecutively anywhere in the world.

Looking for more information about IT Governance and its impact on digital transformation processes - let us know. Our experts will share their knowledge and experience to help you achieve better business results faster.

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