Necessity of IT Service Management and IT Governance Dalibor Radovanović * , Marko Šarac * , Saša Adamović * and Dubravka Lučić ** * Singidunum University, Belgrade, Serbia ** Ernst & Young Belgrade d.o.o., Belgrade, Serbia e-mail: dradovanovic@singidunum.ac.rs; msarac@singidunum.ac.rs; sadamovic@singidunum.ac.rs; dubravka.lucic@yu.ey.com Abstract – This article explain terms of IT Service management and IT Governance. The information technology as an industry is steadily maturing thus becoming standardized and integrated in all aspects of business operations. Different standards, methodologies and best practice enable standardization of information technology. One of the most common methodologies of IT management in organizations is ITIL (Information Technology Infrastructure Library). ITIL is changing the traditional role and a concept of IT, which is no longer limited only to software and hardware, but nowadays also comprehends a business value. More precisely, in this article we will present and explain why it is necessary to know the IT Governance and IT Service Management. I. INTRODUCTION IT Governance (Information Technology Governance) is a subset discipline of Corporate Governance focused on information technology (IT) systems and their performance and risk management. The rising interest in IT governance is partly due to compliance initiatives, for instance Sarbanes-Oxley in the USA and Basel II in Europe, but more so because of the need for greater accountability for decision-making around the use of IT in the best interest of all stakeholders. A characteristic theme of IT governance discussions is that the IT capability is directly related to the investment choices taken by top management that have long term consequences for various stakeholders. The traditional involvement of board-level executives in IT issues was to defer all key decisions to the company's IT professionals. IT governance implies a system in which all stakeholders, including the board, executive management, customers, and staff have clear accountability for their respective responsibilities in the decision making processes affecting IT. This prevents IT or business leaders from independently making decisions about IT without retaining responsibility for their actions and the impact they have on supporting the achievement of strategic objectives. II. IT GOVERNANCE The discipline of IT governance first emerged in 1993 as a derivative of corporate governance and deals primarily with the connection between strategic objectives and IT management of an organization. It highlights the importance of IT related matters in contemporary organizations and states that strategic IT decisions should be owned by the corporate board, rather than by the chief information officer or other IT managers. The primary goals for information technology governance are to (1) assure that the investments in IT generate business value, and (2) mitigate the risks that are associated with IT. This can be done by implementing an organizational structure with well-defined roles for the responsibility of information, business processes, applications, infrastructure, etc. Accountability is the key concern of IT governance. After the widely reported collapse of Enron in 2000 and the alleged problems within Arthur Andersen and WorldCom, the duties and responsibilities of auditors and the boards of directors for public and privately held corporations were questioned. As a response to this, and to attempt to prevent similar problems from happening again, the US Sarbanes Oxley Act was written to stress the importance of business control and auditing. Although not directly related to IT governance, Sarbanes Oxley and Basel-II in Europe have influenced the development of information technology governance since the early 2000s. There are narrower and broader definitions of IT governance:  IT governance is the responsibility of executives and the board of directors, and consists of the leadership, organizational structures and processes that ensure that the enterprise’s IT sustains and extends the organization’s strategies and objectives [1]  IT governance: Specifying the decision rights and accountability framework to encourage desirable behaviour in the use of IT [2].  IT governance is the strategic alignment of IT with the business such that maximum business value is achieved though the development and maintenance of effective IT control and accountability, performance management, and risk management [3].  Van Grembergen and De Haes focus on enterprise governance of IT and define this as "an integral part of corporate governance and addresses the definition and implementation of processes, structures and relational mechanisms in the