Stakeholder Needs and Drivers

COBIT 2019 Foundation: Stakeholder Needs and Drivers - Complete Guide

Understanding Stakeholder Needs and Drivers in COBIT 2019

Why This Topic Is Important

Stakeholder Needs and Drivers form the foundational layer of COBIT's Goals Cascade and Alignment framework. Understanding this concept is critical because:

• Strategic Alignment: Organizations must align their governance and management objectives with what stakeholders actually need and expect
• Value Creation: Identifying stakeholder needs ensures that IT investments directly contribute to organizational success
• Risk Management: Understanding stakeholder expectations helps organizations anticipate and mitigate risks that matter most to their stakeholders
• Resource Optimization: By focusing on stakeholder priorities, organizations can allocate resources more effectively
• Organizational Success: Stakeholder satisfaction is a key measure of whether IT governance and management are working effectively

What Are Stakeholder Needs and Drivers?

Definition: Stakeholder Needs and Drivers represent the external and internal factors that influence what an organization must achieve to satisfy its stakeholders. They are the starting point of the Goals Cascade in COBIT 2019.

Key Components:

• Stakeholders: Individuals or groups with interests in the organization's success (employees, customers, investors, regulators, partners, etc.)
• Needs: What stakeholders require from the organization to be satisfied
• Drivers: External factors (market conditions, regulations, technological changes) and internal factors (strategy, financial goals, organizational culture) that create or shape these needs

The Role in the Goals Cascade

The Goals Cascade flows in this order:

1. Stakeholder Needs and Drivers - The starting point
2. Enterprise Goals - High-level organizational objectives derived from stakeholder needs
3. Alignment Goals - Alignment and transformation goals
4. IT-Related Goals - How IT contributes to enterprise goals
5. Enabler Goals - Goals for processes, people, culture, etc.

Stakeholder Needs and Drivers are the root cause that cascades down through all other levels of goals. Without properly understanding them, the entire cascade becomes misaligned.

How Stakeholder Needs and Drivers Work

Step 1: Identify Stakeholders

First, determine who your stakeholders are. Common categories include:

• Internal: Board members, executives, employees, IT staff
• External: Customers, regulators, investors, business partners, suppliers

Step 2: Understand External Drivers

External drivers push organizations to change and adapt:

• Regulatory Requirements: Compliance obligations (GDPR, HIPAA, industry standards)
• Market Conditions: Competition, economic trends, customer expectations
• Technological Change: Emerging technologies, digital transformation needs
• Social Factors: Environmental concerns, social responsibility, sustainability

Step 3: Understand Internal Drivers

Internal drivers reflect organizational direction and capabilities:

• Strategy: Organizational vision and strategic objectives
• Financial Goals: Profitability, cost reduction, revenue growth targets
• Operational Excellence: Efficiency, quality, and performance targets
• Culture: Organizational values and desired culture

Step 4: Define Stakeholder Needs

Based on drivers, determine what each stakeholder needs from the organization:

• Customers need: Quality products, good service, value for money
• Investors need: Financial returns, transparency, risk management
• Employees need: Fair compensation, growth opportunities, safe environment
• Regulators need: Compliance, reporting, transparency
• Society needs: Ethical behavior, environmental responsibility

Step 5: Map to Enterprise Goals

Each stakeholder need should map to at least one Enterprise Goal. COBIT 2019 typically identifies Enterprise Goals under these categories:

• Portfolio of competitive products and services
• Managing business processes effectively and efficiently
• Complying with laws and regulations
• Protecting financial reporting and assets
• Developing and protecting employee capability
• Ensuring IT resources are capable and available

Practical Example

Scenario: A financial services company faces increasing cyber threats (external driver) and wants to expand digital services (strategic goal).

Stakeholder Analysis:

• Customers (Stakeholder): Need secure online banking (Stakeholder Need) driven by cybersecurity threats and convenience expectations
• Investors (Stakeholder): Need protected assets and sustainable profitability (Stakeholder Need) driven by fiduciary responsibility and market expectations
• Regulators (Stakeholder): Need compliance with security standards (Stakeholder Need) driven by regulatory requirements

How This Cascades: These needs flow into Enterprise Goals like "Protect financial assets" and "Ensure availability of IT services," which then cascade to IT-Related Goals and enabler goals for security processes, skilled staff, and appropriate technology.

Common Stakeholder Categories in COBIT 2019

1. Primary Stakeholders

• Board and executive management
• Customers and end-users
• Investors and shareholders

2. Secondary Stakeholders

• Employees
• Business partners and suppliers
• Regulators and government bodies

3. Tertiary Stakeholders

• Society and community
• Industry bodies
• Competitors (indirect influence)

Key Principles to Remember

• Balance: Organizations must balance competing stakeholder needs
• Transparency: Stakeholder needs should be clearly documented and communicated
• Continuous Review: Drivers and needs change over time and require regular reassessment
• Accountability: Someone must be responsible for understanding and communicating stakeholder needs
• Traceability: There should be a clear line from stakeholder needs through to IT processes and activities

Exam Tips: Answering Questions on Stakeholder Needs and Drivers

Tip 1: Recognize the Foundation Concept

Remember that Stakeholder Needs and Drivers are at the foundation of the Goals Cascade. If a question asks about the starting point for alignment or goals definition, the answer often involves stakeholder needs and drivers.

Example Question Type: "Which element of the Goals Cascade should be defined FIRST?"
Answer Strategy: Stakeholder Needs and Drivers come first because everything else builds from them.

Tip 2: Distinguish Between External and Internal Drivers

Exam questions often test whether you can identify whether a driver is external or internal.

External Drivers: Regulatory changes, market competition, technological evolution, economic conditions
Internal Drivers: Strategic objectives, financial goals, organizational culture, operational targets

Strategy: When given a scenario, ask yourself: "Could the organization control this factor?" If no, it's likely external. If yes, it's likely internal.

Tip 3: Link Stakeholders to Their Needs

Exam questions may present a stakeholder and ask what they need. Be familiar with typical needs:

Tip 4: Understand the Cascade Direction

Questions may ask how stakeholder needs influence other elements. Remember the flow:

Stakeholder Needs and Drivers → Enterprise Goals → Alignment Goals → IT-Related Goals → Enabler Goals

Question Type: "A customer need for fast service would most directly lead to which type of goal?"
Answer Strategy: Start with Enterprise Goals (meeting customer expectations), then flow down to IT-Related Goals (system performance, availability) and Enabler Goals (technology, processes).

Tip 5: Recognize Misalignment Scenarios

Exam questions often present misalignment problems and ask you to identify the root cause.

Question Type: "An organization's IT processes are well-designed and efficient, but customers are still dissatisfied. What is the likely root cause?"
Answer Strategy: This suggests the IT processes aren't aligned with customer needs. The root cause traces back to inadequate understanding or documentation of Stakeholder Needs and Drivers.

Tip 6: Know the Difference Between Needs and Goals

Don't confuse stakeholder needs with enterprise goals.

Stakeholder Needs: What stakeholders require (often qualitative)
Enterprise Goals: How the organization responds (more concrete and measurable)

A customer need might be "secure banking," while the corresponding Enterprise Goal might be "Protect financial assets and information."

Tip 7: Apply to Real Scenarios

For scenario-based questions:

1. Identify all stakeholders mentioned or implied
2. Determine what each stakeholder needs
3. Identify what external or internal drivers create those needs
4. Predict what Enterprise Goals should follow
5. Check if IT goals are properly aligned

Example: "A healthcare organization must comply with new privacy regulations (EXTERNAL DRIVER). What should happen next?

Answer: The organization should identify stakeholder needs around privacy (patients need protected data, regulators need compliance), define Enterprise Goals related to compliance and security, then cascade to IT-Related Goals and enablers that ensure compliance.

Tip 8: Remember the Role of Governance

Stakeholder Needs and Drivers are key inputs to governance. Governance is the board and senior leadership's responsibility to understand stakeholders and ensure the organization is managed accordingly.

Question Type: "Who is primarily responsible for understanding Stakeholder Needs and Drivers?"
Answer: The Board and Governance structures, often working with senior management.

Tip 9: Look for Completeness Issues

Questions may test whether you recognize incomplete stakeholder analysis.

Question Type: "An organization has identified customer and investor needs but overlooked regulatory requirements. What is the risk?"
Answer Strategy: Incomplete stakeholder analysis leads to misaligned goals and potential non-compliance. All relevant stakeholder categories must be included.

Tip 10: Study the COBIT 2019 Goals Template

COBIT 2019 provides a standard set of Stakeholder Needs and Drivers aligned with common enterprise scenarios. Familiarize yourself with:

• How many stakeholder categories are typically defined
• What the primary external drivers are in COBIT
• Which Enterprise Goals map to each stakeholder group

Practice Question Examples

Example 1 (Easy):
"In the Goals Cascade, Stakeholder Needs and Drivers represent:"
A) The final step in goal definition
B) The starting point for all enterprise goals ← CORRECT
C) A subset of enterprise goals
D) A measurement framework

Example 2 (Moderate):
"A retail organization experiences declining sales due to increased online competition. This is an example of:"
A) An internal driver
B) An external driver ← CORRECT
C) A customer need
D) An enterprise goal

Example 3 (Challenging):
"An organization has clear enterprise goals but its IT processes don't support those goals effectively. The root cause is most likely:"
A) Poor IT process design
B) Inadequate IT staff skills
C) Misalignment of stakeholder needs understanding ← CORRECT
D) Insufficient IT budget

Final Exam Strategy

• Read carefully: Identify all stakeholders mentioned in the scenario
• Think backwards: From any goal mentioned, trace back to which stakeholder need it serves
• Check alignment: Ensure proposed solutions actually address the underlying stakeholder needs
• Look for completeness: Question whether all relevant stakeholders and drivers have been considered
• Remember the cascade: Each level should logically flow from the level above it