What is COBIT 5 and how does it function?

• Tue 06-Dec, 2022
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What is COBIT 5 and how does it function?

COBIT 5 is a framework designed by the Information Systems Audit and Control Association

What is COBIT 5?

COBIT 5 is a framework designed by the Information Systems Audit and Control Association (ISACA) for the management and governance of information technology. Its purpose is to provide a common language for business executives to communicate with each other about IT-related goals, objectives, and results. The COBIT frameworks have become an industry standard for the management and governance of Information technology.

COBIT 5 is designed to help enterprises to in the following purposes.
1. Assure information is accurate to support business decisions.
2. Achieve strategic goals by using IT assistance.
3. Maintain operational excellence by using technology effectively.
4. Keep IT-related risk at an acceptable level.
5. Optimize IT services and technology costs.
6. Maintain compliance with relevant laws and regulations.

COBIT 5 has been designed with integration at its core. It is aligned with numerous other frameworks and standards, like ITIL, ISO 20000, and ISO 27001. It ensures that the resources are optimally utilized and potential risks are mitigated. Applying COBIT 5 has allowed various businesses to spend less on IT services secured internally by effective use of information technology. The COBIT 5 approach offers organizations to track their information assets using advanced methods. This empowers organizations to make better decisions and survive in the industry. With COBIT 5, businesses can streamline their IT and business processes for deriving more useful information.

Who needs IT governance?

IT governance offers an infrastructure to align IT strategies with business strategies. Organizations can produce measurable results toward accomplishing their goals by following a formal framework. IT governance is an integral part of overall enterprise governance. Both private and public sectors need a way to ensure that their IT functions support business strategies and objectives. And a formal IT governance program should be on the radar of any organization in any industry that needs to comply with regulations related to financial and technological accountability. However, implementing an all-inclusive and comprehensive IT governance program requires a lot of time and efforts. Where very small entities might practice only essential IT governance methods, the goal of larger and more regulated organizations should be a proper developed IT governance program. IT governance is basically driven by the need for the transparency of enterprise risks and the protection of shareholder value. The overall objective of IT governance is to understand the issues and the strategic importance of IT so that the organization can maintain its operations and implement strategies to enable the company to compete better in the present times and in the future. Thus, IT governance aims at ensuring that expectations for IT are met and that IT risks are mitigated. IT governance exists within corporations to guide IT initiatives and to ensure that the performance of IT meets the following corporate objectives:

How to select an IT framework?

This question crosses the mind while talking about IT frameworks. There are a few aspects that one must consider while selecting an IT framework for an organization. First and foremost thing to keep in mind while selecting an IT framework involves evaluating the current resources of the organization. If you have a more experienced team then you may want to consider a framework that provides more flexibility and power. Most IT governance frameworks are created to help you determine how your IT department is functioning overall, what key metrics the management requires and what return IT is giving back to the business from the investments.

While reviewing the frameworks, consider your corporate culture. Does a particular framework seem like a suitable fit for your organization? Does it resonate with your stakeholders? After analyzing these factors, move on to selection of the framework. That framework is probably the best choice.

Let us look it a bit closely. Where COBIT and COSO are used mainly for risk, ITIL helps to streamline the services and operations. Although CMMI was originally intended for software engineering, it now involves processes in hardware development, service delivery, and purchasing. However, you need not to select just one framework. For instance, COBIT and ITIL complement one another in that COBIT. Some organizations have used COBIT and COSO, along with the ISO 27001 standard for managing information security.

How to ensure a smooth implementation of an IT framework?

The easiest way is to start with a framework that has been designed by the industry professionals and used by various organizations. Many frameworks include implementation principles and concepts to assist the organizations phase in an IT governance program and smooth implementation. It is also recommended to form a risk management committee with high-level sponsorships and business representation. To ensure this is an effective program, it needs to be supported by a broad set of line of business leaders.  It is also recommended to share results with the board or audit committee to develop real attention when items begin to get ignored.

The most widely used frameworks are mentioned below.

COBIT:  Developed by ISACA, its roots are in IT auditing, ISACA expanded COBIT’s scope over the years to fully support IT governance. The latest version is COBIT 5, which is widely used by organizations focused on risk management and mitigation.
COSO:  Developed by the Committee of Sponsoring Organizations of the Treadway Commission, COSO’s focus is less on IT-specific than the other frameworks, concentrating more on business aspects like enterprise risk management (ERM) and fraud deterrence.
ITIL: Initially it was an acronym for Information Technology Infrastructure Library. Its purpose is to ensure that IT services support core processes of the business. ITIL comprises 5 sets of management practices for service strategy, design, transition operation, and continual service improvement.

Components of COBIT 5

There exist 5 major components of the COBIT 5 framework. Let us have a look at them.

1.      Framework: It helps to organize IT governance aims and putting the best practices in IT processes and domains in their respective places. All of this is done while linking business requirements.

2.      Process Descriptions: It is a reference model that acts as the common language between every individual within the organization. Process descriptions include the planning, building, running, and monitoring of all IT processes.

3.      Control Objectives: They comprise a complete list of requirements that the management has considered for effective and efficient IT and business control.

4.      Maturity Models: They are used to access the maturity and potential of every process. They also address any gaps that exist.

5.      Management Guidelines: The comprise the guidelines that enable better assigning of responsibilities, performance measurement, agreeing on common goals, and better relationships with other processes.

Principles of COBIT 5

There are 5 principles of the COBIT 5 framework. Let us have a look at them.

1.      Meeting the needs of the stakeholders

According to this principle, organizations should always prioritize stakeholder demands since they can only succeed if all their needs are satisfied. This principle focuses on stakeholder governance, negotiation, and decision-making in the case of conflicting stakeholder requirements. While making management and IT governance decisions, the company should consider how and which stakeholder would profit from the decision. Also, the risks faced by stakeholders should be listed in detail.

 

2.      Covering the enterprise end to end
COBIT 5 combines IT governance with organizational governance in this principle, which encompasses all information and technology management processes. In addition, this approach combines even business processes and IT governance. As a result, COBIT framework enables the identification of any possible threats to the company.

3.      Applying a single integrated framework

The organization can utilize COBIT 5 as a single integrated framework. Rapid changes of IT are necessitating organizations to meet the demands from stakeholders, suppliers, and consumers. As a result, the COBIT 5 framework enables organizations to have an integrated framework (which includes other applicable standards, techniques, and frameworks such as PRINCE2, TOGAF, ISO 27001, and others) that ensures consistency and coverage.

 

4.      Enabling a holistic approach

Organizations should consider the broader structure and processes of governance and management before making significant choices. Enablers are being used in COBIT 5 to help with governance and IT management. The major component that promotes the effectiveness of both government and IT-related activities is enablers. It may be used throughout the company, including all internal and external resources involved in IT governance and management.

 

5.      Separate Governance from Management

In terms of activities, responsibilities, support system organization, and structure, the government and management are quite different. As a result, COBIT 5 separates the governance from management, implementing EDM for governance and PBRM for management.

 

Apply Single Integrated Framework

The organization can utilize COBIT 5 as a single integrated framework. Rapid changes of IT are necessitating organizations to meet the demands from stakeholders, suppliers, and consumers. As a result, the COBIT 5 framework enables organizations to have an integrated framework (which includes other applicable standards, techniques, and frameworks such as PRINCE2, TOGAF, ISO 27001, and others) that ensures consistency and coverage.

The reasons for COBIT 5 being a single integrated framework are mentioned below.

1.      For both technical and non-technical terms of language,

2.      COBIT 5 acts as an integrated source of direction COBIT 5 is consistent with standards and frameworks, such as ITIL and ISO.

3.      COBIT 5 is a unique framework as it aligns all governance and management activities by inputting the latest relevant framework standards and methods.

 

 

KMP to be implemented in COBIT 5 Framework for IT Derived Business Evaluation

The lifecycle phase of Cobit 5 Implementation process has 7 phases which are mentioned below: Identify and Analyze Drivers of Change
Determine where we stand.
Decision on where we have to be.
Recognize the factors to be improved.
Formulate plans and visualize as how to get there
Evaluation of results to determine where we stand.
Ways to continue the momentum.

Identify and Analyze Drivers of Change: This phase helps us determine and analyze the drivers of change to determine pain points, triggers, risk scenarios to enable the transition to a better enterprise. The primary requirement of this phase is to acknowledge the change required in an organization and the challenges, root causes, and success factors enabling them.

Determine where we stand: This phase enables us to identify and define ourselves in the organization by assessing current process capability. The focus is mainly highlighted for mapping enterprise goals with IT-related goals and industry processes for overcoming challenges and stand by the enterprise goals and success factors.

Decision on where we have to be: In this phase, a target is set to formulate plans to achieve the target using gap analysis and research with COBIT’s implementation in various phases. The guidance with solutions helps us gain a win-to-win situation.

Recognize the factors to be improved: This phase recognizes the factors to bring about the improvisation with a change in the implementation plan supported by real-time business cases to bring about practical change in the enterprise.

Formulate plans and visualize as how to get there:  This phase is to formulate business plans in adherence to business goals and practices with key metrics and performance into consideration.

Evaluation of results to determine where we stand: This phase evaluates the results and actions of the business plan implemented to drive the change by monitoring the success with expected benefits from the plan.

Ways to continue the momentum: This phase highlights the achievements and keeps a track of initiatives, reviews the objectives of the plan and success factors to maintain the enterprise at its current levels with continuous backup improvement plan with COBIT’s implementation.

 

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