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Cloud governance is how an organization controls its use of cloud services by establishing guardrails. These guardrails are set of policies, procedures, and tools that define acceptable and unacceptable cloud activities. Effective cloud governance aligns cloud usage with business objectives, mitigates risks, ensures regulatory compliance, and prevents unmanaged or unauthorized cloud actions. In practice, cloud governance covers key domains such as security, regulatory compliance, operations, cost management, data management, resource provisioning, and even emerging areas like AI.
Quick links: Azure governance tools and Example governance RACI matrix
Governance process: Cloud governance is not a one-time project, but a continuous process. After initial setup, it requires ongoing monitoring, evaluation, and updates to adapt to new technologies, evolving risks, and changing requirements. After establishing the governance foundation in Step 1, Steps 2–5 repeat in a cycle to sustain and improve governance over time.
The first step is to establish a dedicated cloud governance team to oversee cloud governance across the organization. This team is accountable for managing cloud-related risks, developing and updating governance policies, and reporting on governance progress. Team members must understand the needs of various business units and ensure that governance policies effectively minimize risk without blocking business goals. The outcome of this step is to have clear ownership and accountability for cloud governance success.
1. Define the team's function
Clearly outline what the cloud governance team is responsible for and what activities it will perform to implement governance. At a minimum, the team should be able to:
Engage stakeholders. The cloud governance team must actively engage stakeholders across the organization (IT, finance, operations, security, and compliance) to gather input on defining cloud governance policies. The goal is to ensure cloud governance policies minimize risk without preventing teams from achieving business goals.
Assess cloud risks. The cloud governance team must oversee the identification and evaluation of cloud-related risks. The team drives risk assessment processes and communicates risk findings. They might provide tools or frameworks for others to assess security, compliance, and operational risks in the cloud.
Develop and update governance policies. The cloud governance team should document the cloud governance policies that address identified risks. The team resolves any challenges these policies create for various groups and periodically reviews policies to keep them up to date with technological changes and new requirements. The policies must be comprehensive, enforceable, and aligned with current business needs.
Monitor and review compliance. The cloud governance team needs to establish metrics and reporting methods to measure how effective the governance policies are. Track compliance levels, policy violations, incident response times, and even user satisfaction. Regularly review these metrics to identify areas for improvement and report on the organization’s cloud governance posture.
2. Select team members
Choose individuals for the cloud governance team who have the right skills and experience to enforce policies, manage risks, and ensure compliance. Some recommendations for team composition:
Keep a small team. Pick a small team to encourage agility and quicker decision-making.
Ensure diverse representation. Include team members from different departments or domains. For example, IT operations, cloud architecture, security, compliance, finance, and perhaps application development. Cross-functional representation ensures the governance policies consider multiple perspectives.
Define team members' responsibilities. Define the roles and responsibilities within your cloud governance team. Tailor them to your organization's size, complexity, and cloud maturity. Key responsibility areas typically include overall cloud governance program success, cloud architecture oversight, cloud security, regulatory compliance, and cloud financial management (cost optimization).
3. Define the team's authority
Empower the cloud governance team with the mandate and support required to implement governance throughout the organization. Steps to do this include:
Secure executive sponsorship. Gain support from and report to a named executive, such as the CIO or CTO, to support the cloud governance initiative. The executive sponsor serves as a point of escalation for challenges and helps align cloud governance with business goals.
Establish authority levels. The executive sponsor should grant the team the authority to define cloud governance policies and take corrective measures for noncompliance.
Communicate authority. The executive sponsor should communicate the authority of the cloud governance team to the entire organization. Include the importance of adhering to the cloud governance policies they create.
4. Define the team's scope
Establish the boundaries of the cloud governance team's responsibilities. The goal is to clarify areas of responsibility so the cloud governance team can focus on their defined functions. To define the scope, follow these recommendations:
Define relationship with other teams. Determine how the cloud governance team will interact with existing IT governance, on-premises infrastructure teams, or application teams. For example, in a hybrid environment, specify which aspects the cloud governance team handles versus traditional IT governance. Clearly delineating scope prevents confusion over who manages what.
Use a RACI matrix. It can be helpful to create a RACI (Responsible, Accountable, Consulted, Informed) chart that maps out governance-related tasks and who is involved. For instance, the cloud governance team might be Accountable for developing policies, while cloud platform engineers are Responsible for implementing specific controls, and so on. A RACI matrix ensures everyone knows their part in cloud governance and how the governance team collaborates with other groups.
Example cloud governance RACI matrix
The following table is an example of a RACI matrix for cloud governance. The matrix indicates who is responsible (R), accountable (A), consulted (C), and informed (I) across various cloud governance tasks. Create a RACI matrix that aligns to your organization and meets your specific needs.
| Task | Cloud governance team | Executive sponsor | Cloud platform team(s) | Workload teams |
|---|---|---|---|---|
| Engage stakeholders | R, A | I | C | C |
| Assess cloud risks | A | I | R | R |
| Develop and update governance policies | R, A | I | C | C |
| Report on cloud governance progress | R, A | I | C | C |
| Plan a cloud architecture | A | I | R | R |
| Enforce governance policies | A, C | I | R | R |
| Monitor compliance | A, C | I | R | R |
Having such a matrix helps clarify who does what. For example, the Cloud Governance Team is accountable (A) for assessing cloud risks, but the Cloud Platform and Workload teams are responsible (R) for performing risk assessments in their areas. The Cloud Governance team is consulted (C) or accountable for enforcement, but the platform and workload teams carry it out.
With the team’s functions, membership, authority, and scope established, you have created a foundation for cloud governance. This team will now drive the next steps: defining policies, enforcing them, and monitoring compliance.