Governance of Enterprise IT (CGEIT) Certification Practice Exam

What is the most important aspect to implement when creating an IT balanced scorecard for enterprise governance?

1. Enterprise architecture is aligned with business objectives

2. Key performance indicators are defined

3. A focus on internal processes exists

4. Employee compensation is linked to performance

The correct answer is: Key performance indicators are defined

In the context of creating an IT balanced scorecard for enterprise governance, defining key performance indicators (KPIs) is the most crucial aspect. KPIs serve as measurable values that demonstrate how effectively an organization is achieving its key business objectives. They provide a way to quantify performance, allowing for objective assessment and alignment of IT goals with overall enterprise strategy. Defining KPIs is essential because they help management track progress towards desired outcomes, making it possible to adjust strategies and operations in real-time based on performance data. This aligns various departments' activities with the organization's vision, ensuring that everyone is working towards the same objectives. While aligning enterprise architecture with business objectives, focusing on internal processes, and linking employee compensation to performance are also important components of a comprehensive governance strategy, they all hinge upon the clarity and precision of the KPIs established. Without well-defined KPIs, the organization might struggle to measure success or identify areas for improvement, making this the foundational aspect of an effective IT balanced scorecard.