“Complexity and rapid change in today's business environment demand good governance more than ever.” These are the words of former IBM CEO, Sam Palmisano, highlighting the importance of governance in a high-stakes, rapidly-evolving business landscape. One of the most widely recognized models for corporate governance is ISO 38500.

ISO 38500 is the international standard for the corporate governance of information technology (IT). Implemented in 2008, it provides a framework for effective management and control of IT resources. Unlike other IT management frameworks focused solely on processes, ISO 38500 emphasizes the role of executives and directors in governing the organisation’s IT.

For effective implementation, take a look at these ISO 38500 best practices:

• ISO/IEC 38500 Training Toolkit (193-slide PowerPoint deck)
• Kanban Board: ISO 38500 (Excel workbook)

Adopting ISO 38500 for Strategic Advantage

Companies that have implemented ISO 38500 effectively gain broad strategic benefits. From clearer lines of communication to improved risk management, the Standard encourages organizations to view IT not as a cost center, but as a business enabler. Here are a few principles that a firm should adhere to while implementing the ISO 38500 framework:

• Responsibility - Executive management must demonstrate leadership in directing, controlling, and influencing the organization's use of IT.
• Strategy - An IT strategy should be formulated that aligns with the organization's business strategy.
• Acquisition - IT acquisitions should be done according to a clear, deeply analyzed plan that aligns with the firm's strategic direction.
• Performance - Performance of both the IT system and its governance should be measured, reported, and benchmarked against the firm's stated goals.
• Conformance - All IT initiatives should adhere to defined policies and legislative requirements to assure compliance.
• Human Behavior - Understanding, and managing the behaviors of individuals and groups in the organization can lead to successful IT adoption.

Explore related management topics: Risk Management IT Strategy

Strategic Benefits of ISO 38500

Implementing ISO 38500 can revolutionize the role of IT within your corporation. A study by McKinsey confirmed that companies with good IT Governance have profits at least 20% higher than companies with poor governance. Dynamic capabilities like Digital Transformation, Operational Excellence, and Performance Management can be effectively guided with the involvement of C-level executives, which ISO 38500 emphasizes.

Explore related management topics: Digital Transformation Operational Excellence Performance Management IT Governance

Key Takeaways for C-Level Executives

As a C-level executive, understanding and implementing ISO 38500 will ensure that IT serves as a key business enabler rather than a cost center or a liability. While IT is often seen as a complex and rapidly changing area, the framework and principles provided by ISO 38500 assists in managing this complexity effectively. Furthermore, it provides a structure that fosters alignment between IT and business strategy, promoting overall organizational success.

Driving IT Governance with ISO 38500

It's time to stop viewing ISO 38500 as merely another box to check for IT governance. Rather, it should be seen as a strategic tool for the C-suite to more effectively manage IT assets, reduce risks, and ultimately drive value creation. Whether you are a new or experienced C-level executive, embracing ISO 38500 can provide you with the strategic oversight tools needed to ensure that IT is consistently delivering value for your organization.

Explore related management topics: Value Creation