Isaca CGEIT - Certified in the Governance of Enterprise IT Exam

The best approach for a CIO to ensure IT executes against an approved strategy is to request IT senior leaders to collectively plan tactics for execution. This collaborative approach leverages the expertise and insights of senior IT leaders to develop a cohesive and aligned plan that supports the strategic objectives. Collective planning fosters ownership and commitment among leaders, ensuring that execution tactics are well-coordinated and aligned with the overall IT strategy. While asking project management to define activities, having leaders independently develop team goals, and providing specific task direction are important, the collective planning by IT senior leaders ensures a strategic and unified approach to execution.

Comprehensive and Detailed Explanation:

The CGEIT Review Manual 8th Edition, in its Risk Optimization domain, emphasizes that IT risk management policies and standards must support the enterprise’s strategic objectives to ensure alignment with business priorities. Enterprise goals and objectives provide the foundation for IT risk management, ensuring that policies address risks that could hinder strategic outcomes (e.g., market expansion, regulatory compliance). For example, if an enterprise goal is to enhance customer trust, risk policies might prioritize cybersecurity. The manual likely references COBIT 2019’s APO12-Managed Risk, which stresses aligning risk management with business objectives.

Option A: Best practices are important but generic and may not reflect specific enterprise needs.

Option B: Corporate risk culture influences risk management but is secondary to strategic goals.

Option D: ERM framework is a broader structure that IT risk management should integrate with, but enterprise goals are the primary driver.

Double Verification: The answer aligns with COBIT’s APO12 and the CGEIT domain’s focus on business alignment. Enterprise goals are the primary focus for risk policy alignment in ISACA’s frameworks.

ISACA CGEIT Review Manual 8th Edition, Domain 4: Risk Optimization (focus on risk policy alignment).

COBIT 2019, APO12-Managed Risk.

ISACA Glossary (for definitions of risk management), available at https://www.isaca.org/resources/glossary.

This is because enterprise risk appetite is the amount and type of risk that an organization is willing and able to accept in pursuit of its objectives. It reflects the organization’s risk culture, strategy, and values. When implementing an emerging technology with unclear regulatory and compliance requirements, the organization should consider its risk appetite and tolerance, as well as the potential benefits, costs, and impacts of the technology. The organization should also assess the likelihood and severity of the regulatory and compliance risks, and implement appropriate controls and mitigation measures to manage them within acceptable levels.

Some of the sources that support this answer are:

1: This source provides a comprehensive guide on how to navigate the hype and risk of emerging technologies. It suggests that organizations should define their risk appetite and tolerance for adopting emerging technologies, and conduct a balanced risk and benefit assessment before making any decisions.

2: This source discusses the challenges and best practices for mitigating emerging technology risk. It recommends that organizations should align their emerging technology strategy with their enterprise risk appetite, and establish a governance framework that covers the identification, evaluation, response, and monitoring of emerging technology risks.

3: This source defines enterprise risk appetite and explains its importance for effective risk management. It also provides some guidance on how to develop, communicate, and monitor enterprise risk appetite statements.

Outsourcing IT services requires a clear distinction between core and non-core processes to ensure that strategic capabilities are retained in-house while non-core activities are outsourced. The CGEIT Review Manual 8th Edition highlights that identifying core and non-core processes is the most essential consideration for outsourcing decisions.

Extract from CGEIT Review Manual 8th Edition (Domain 5: Benefits Realization):"The most critical consideration in outsourcing IT services is identifying core and non-core business processes. Core processes, which provide competitive advantage, should typically be retained, while non-core processes can be outsourced to improve efficiency and focus on strategic priorities." (Approximate reference: Domain 5, Section on Outsourcing Strategy)

Identification of core and non-core business processes (option A) ensures that outsourcing aligns with the enterprise’s strategic goals and avoids compromising critical capabilities.

Why not the other options?

B. Compliance with enterprise architecture (EA): EA compliance is important but secondary to determining what processes should be outsourced.

C. Alignment with existing human resources (HR) policies and practices: HR alignment is operational and less critical than strategic process identification.

D. Adoption of a diverse vendor selection process: Vendor selection follows the decision to outsource and is not the primary consideration.

Aligning the program to the business requirements. IT value management is the process of planning, measuring, and optimizing the value delivered by IT to the business. Changing an IT value management program means introducing new or improved methods, tools, or practices to enhance the IT value management process. The best CSF for this change is to align the program to the business requirements, which means ensuring that the program supports the business strategy, goals, and needs, and delivers the expected benefits and outcomes to the business stakeholders12.

The other options are not as effective as aligning the program to the business requirements to use as a CSF for changing an IT value management program. Documenting the process for the board of directors’ approval is a step that may be required for changing an IT value management program, but it does not guarantee that the program will be successful or effective. Adopting the program by using an incremental approach is a strategy that may help to implement the change more smoothly and gradually, but it does not ensure that the change will meet the business expectations or needs. Implementing the program through the enterprise’s change plan is a tactic that may facilitate the coordination and communication of the change across the enterprise, but it does not ensure that the change will align with the business strategy or goals.

A new regulation introduces a potential risk that must be assessed to understand its impact on the enterprise’s operations and compliance obligations. The CGEIT Review Manual 8th Edition stresses that the first step in addressing new risks, such as regulations, is to conduct a risk assessment to evaluate their significance and implications.

Extract from CGEIT Review Manual 8th Edition (Domain 3: Risk Optimization):"When a new regulation is identified, the first step is to assess the associated risk, including its potential impact on operations, compliance requirements, and the likelihood of enforcement. This assessment informs subsequent actions, such as developing mitigation plans or updating governance frameworks." (Approximate reference: Domain 3, Section on Risk Assessment)

Assessing the risk associated with the new regulation (option D) provides the enterprise with a clear understanding of the regulation’s impact, enabling informed decisions about compliance, mitigation, or strategic adjustments.

Why not the other options?

A. Request an action plan from the risk team: An action plan is premature without first assessing the risk’s scope and impact.

B. Determine whether the board wants to comply with the regulation: The board’s decision on compliance should be informed by a risk assessment, not precede it.

C. Update the risk management framework: Updating the framework may be necessary later but is not the first step, as the specific risk must be understood first.

 An updated business case for IT resourcing is a document that provides the rationale and justification for the proposed changes in the IT staff structure, such as the number, roles, skills, and costs of the IT personnel. An updated business case for IT resourcing should align with the IT strategy and objectives, as well as the business needs and expectations. An updated business case for IT resourcing should also include the benefits, risks, and impacts of the IT staff restructure, as well as the alternatives and recommendations12.

The other options are not as effective as an updated business case for IT resourcing to support an IT staff restructure. Established IT key performance indicators (KPIs) are measures that evaluate the performance and outcomes of the IT department, such as service quality, customer satisfaction, project delivery, and innovation. Established IT KPIs are important for monitoring and reporting the IT results and achievements, but they do not necessarily support an IT staff restructure, unless they are linked to the proposed changes in the IT staff structure3. IT staff training program requirements are specifications that define the learning needs and objectives of the IT personnel, such as skills development, knowledge enhancement, and career advancement. IT staff training program requirements are beneficial for improving the capabilities and competencies of the IT staff, but they do not directly support an IT staff restructure, unless they are aligned with the new roles and responsibilities of the IT personnel4. External IT staffing benchmarks are standards or best practices that compare the IT staff structure of other organizations or industries, such as staffing ratios, skill levels, or salary ranges. External IT staffing benchmarks are useful for assessing and improving the competitiveness and efficiency of the IT department, but they do not adequately support an IT staff restructure, unless they are customized and adapted to the specific context and situation of the organization5.

Comprehensive and Detailed Explanation:

The CGEIT Review Manual 8th Edition, in its Risk Optimization domain, states that the board of directors is responsible for setting the risk appetite, which defines the level of risk the enterprise is willing to accept to achieve its objectives. This guides the risk management strategy, ensuring alignment with business goals. For example, a conservative risk appetite might prioritize cybersecurity investments. The manual likely references COBIT 2019’s EDM03-Ensured Risk Optimization, which assigns risk appetite to the board.

Option A: Risk management process is operational and defined by management.

Option B: Risk identification plan is tactical and not a board responsibility.

Option C: Risk treatment plan follows risk appetite setting.

Double Verification: The answer aligns with COBIT’s EDM03 and the CGEIT domain’s focus on board responsibilities. Risk appetite is a core ISACA board duty.

ISACA CGEIT Review Manual 8th Edition, Domain 4: Risk Optimization (focus on board roles).

COBIT 2019, EDM03-Ensured Risk Optimization.

ISACA Glossary (for definitions of risk appetite), available at https://www.isaca.org/resources/glossary.

 Culture is the most critical factor to understand while assessing the feasibility of introducing new IT practices and standards into the IT governance framework, because it influences the behavior, values, and beliefs of the organization and its stakeholders. Culture affects how IT governance is perceived, implemented, and evaluated in the organization. A mismatch between the organizational culture and the IT governance framework can lead to resistance, conflict, and poor performance. Therefore, it is essential to assess the current culture of the organization and its readiness for change before introducing new IT practices and standards. References := The Influence of Organizational Culture in Application of Information Technology Governance, The Value of IT Governance, Organisational Governance Explained: The Keys to Success

 Portfolio management is the process of selecting, prioritizing, and managing a collection of projects, programs, and initiatives that align with the strategic goals and objectives of an organization. Portfolio management can help to ensure that the IT initiatives meet their goals, by providing a holistic and integrated view of the IT investments, resources, and outcomes. Portfolio management can also help to optimize the value and benefits of the IT initiatives, by balancing the risks, costs, and dependencies among them. Portfolio management can also help to monitor and control the performance and progress of the IT initiatives, by using metrics, indicators, and reports123. References: What is Portfolio Management? Definition & Examples. A Guide to IT Portfolio Management | Adobe Workfront. IT Portfolio Management: Importance, How-To Steps and Tips.

 Objectives and metrics are the most critical for the successful implementation of an IT process, as they define the purpose, scope, and expected outcomes of the process. Objectives and metrics also help to measure and monitor the performance, efficiency, and effectiveness of the process,and to identify and implement improvement opportunities12. References := CGEIT Exam Content Outline, Domain 1, Subtopic C: Technology Governance, Task 2: Ensure that IT processes are defined, implemented, monitored and continually improved in alignment with the enterprise governance framework.

 Process owners are responsible for ensuring the regular review of quality management performance against defined quality metrics, as they are accountable for the design, implementation and improvement of the processes they own. Risk management team, internal auditors and executive management have other roles and responsibilities in relation to quality management, such as providing assurance, oversight and direction. References: : CGEIT Review Manual (Digital Version), Chapter 3: Benefits Realization, Section 3.2: IT Investment Management, Subsection 3.2.4: IT Investment Management Process, Page 104 : CGEIT Review Manual (Digital Version), Chapter 3: Benefits Realization, Section 3.4: Quality Management, Subsection 3.4.1: Quality Management Overview, Page 120

To generate value for the enterprise, it is most important that IT investments are consistent with the enterprise’s business objectives. This means that IT investments should support and enable the achievement of the enterprise’s vision, mission, goals, and strategies. IT investments should also align with the enterprise’s values, culture, risk appetite, and stakeholder expectations. Byensuring that IT investments are consistent with the enterprise’s business objectives, the enterprise can maximize the benefits and value that IT can deliver, and avoid wasting resources on IT projects or initiatives that are not relevant, necessary, or effective. According to one source1, “Driving value creation with technology investments requires a clear understanding of how technology can enable business strategy and create value for the organization.” The other options are not the most important factor for generating value for the enterprise, but rather some of the steps or outcomes that can support or result from IT investments. Aligning IT investments with the IT strategic objectives is important, but not sufficient, as the IT strategic objectives should also be aligned with the enterprise’s business objectives. Approving IT investments by the CFO is a part of the financial governance process, but it does not guarantee that the IT investments are consistent with the enterprise’s business objectives. Including IT investments in the balanced scorecard is a way of measuring and reporting on the performance and value of IT investments, but it does not ensure that the IT investments are consistent with the enterprise’s business objectives. References := Driving value creation with technology investments

The most successful IT performance metrics are those that contain objective measures that can be quantified and verified. Objective measures are more reliable, consistent, and repeatable than subjective measures, which may vary depending on the perspective or opinion of the stakeholders. Objective measures also help to align IT performance goals with business goals and to communicate the value of IT to the rest of the organization. According to one source1, a good metric is linear, reliable, repeatable, easy to use, consistent and independent. References := ISACA, CGEIT Review Manual, 27th Edition, 2020, page 11; Performance Measurement Metrics for IT Governance

An exception management process is a method for documenting and approving an exception to compliance with established IT governance policies, standards, and practices. An exception management process can accommodate the need for autonomy over technology choices by allowing a functional group to request and justify a deviation from the IT governance requirements, based on the business needs, risks, costs, and benefits. An exception management process can also help to ensure that the exceptions are reviewed and approved by the appropriate authorities, that the exceptions are monitored and reported, and that the exceptions are aligned with the IT strategy and objectives123. References: Exception Management Process Flow. IT/Information Security Exception Request Process. Strategies, Governance, Policies, Standards and Resources.