Groves has signed a two-year deal at the League One club along with assistant Shaun Brooks after taking over from Lee Bradbury for the final eight games of last season.
The Cherries lost just two of those matches as they finished in 11th place.
"I feel very privileged. I think it's a fantastic club in a good position. It has made excellent strides forward and we want to continue that work," he said.
"I feel that we are well placed, in terms of getting to know the first-team players, but also with the whole structure of the club. Between me and Shaun we know almost every player from the Under 8s to the Under 18s, from the development squad to the first team.
"We've got very ambitious owners and we are very ambitious too, so it bodes well for the future."
Groves made 13 appearances for the Iron, scoring three goals, in February 2004.