The digital boards today need to ask more insightful questions about information and technology because leading companies across industrial sectors claim they are in the information management business.
The contemporary boards play the directory role in driving changes, overseeing business strategy, and monitoring business performance. They are also the “mastermind” behind the digital transformation. The matter of fact is that the change is inevitable and the speed of change is increasing due to the exponential growth of information and robust digital technologies. Given how applying IT is becoming so intrinsically important to so many different enterprises across industrial sectors, digital BoDs need to become information friendly and technology-savvy. While directors bring many competencies to the table, most do not have access to information about technology-driven innovation and its potential related to the businesses they oversee. Here is a set of digital board's insightful inquiries about information & technology.
The contemporary boards play the directory role in driving changes, overseeing business strategy, and monitoring business performance. They are also the “mastermind” behind the digital transformation. The matter of fact is that the change is inevitable and the speed of change is increasing due to the exponential growth of information and robust digital technologies. Given how applying IT is becoming so intrinsically important to so many different enterprises across industrial sectors, digital BoDs need to become information friendly and technology-savvy. While directors bring many competencies to the table, most do not have access to information about technology-driven innovation and its potential related to the businesses they oversee. Here is a set of digital board's insightful inquiries about information & technology.
Which roles do BoDs(or the various functional groups) play in IT oversight in general, and in overseeing changes in the organization? Information is the lifeblood and one of the most invaluable assets in digital businesses today, and technology is the disruptive force in digital transformation. Technology is rapidly becoming an integral part of many companies’ strategic plans, and the information is the gold mine every foresightful business is digi=ging to unleash the digital potential of the organization. Hence, the boards as a top leadership team can no longer avoid, delegate or ignore the need for technical competency among their ranks. Understanding the importance of IT to the company’s business model is important for effective oversight of technology initiatives. The board oversees the business strategy, and IT becomes part of the overall digital strategy. The strategy is underpinned by digital capabilities, and IT is the threshold of business capabilities. It is healthy for the BoDs and senior management to honestly assess their company's maturity level and capabilities for change. And then help to build a roadmap or blueprint to change or improve these capabilities to enable more quickly responses to consumers and technology opportunities and threats. Tech-savvy boards oversee crucial IT investment and strategic planning because nowadays a highly innovative IT can lift the company to the next cycle of business growth and a higher level of maturity. If not being managed effectively, information disconnectedness will reduce the strategic potential and increase risks significantly. A dysfunctional IT or poor IT investment could also cause the entire business to fail even overnight. Hence, the board’s IT oversight becomes a strategic imperative for leading a seamless digital transformation.
"Where, when and what" would you expect IT to enter the board conversation? Although IT-enabled business capabilities are the key differentiator between digital leaders and digital laggards. In many organizations, IT is still not part of the business strategy, IT only supports strategy. It is a board responsibility to ensure that the strategy covers all important parts including IT, to question it and to finally make effective decisions about it. They should view the technology discipline as a strategic function in the organization in the same way that finances or marketing strategies would be viewed. In practice, many foresightful boards invite CIOs to the big table for bridging gaps and harnessing communications to accelerate digital transformation. It is the right timing for empowering CIOs to participate and contribute to the digital boards. Directors are particularly involved in overseeing and understanding more traditional IT issues, such as the status of major IT portfolio implementations & status, and their companies’ annual IT budgets, as well as overseeing and understanding risks related to compromising customer data. CIOs can help boards understand the business drivers, pain points and offer technology or process related solutions to aid productivity and gain competitive advantages. That is “what and where” part in which IT leaders can make a significant influence in the boardroom.
How effective the boards evaluate IT performance to achieve business vision & goals? As BoDs, one of the fundamental accountabilities is ensuring the organization acts in accordance with the relevant regulations. When you think of "IT performance," that includes both operative excellence and innovation management. The innovation capability will enable IT as a strategic asset and value center. The set of inquiries for IT evaluation includes: Does IT create a revenue opportunity? Does IT create a competitive advantage? Does IT solve a business need? Is IT priority and business priority consistent? What efficiency and revenue generation opportunities are supported/delivered by IT? How does IT impact customer retention? How can IT have a "P&L" even if it’s only for communication purposes? How can IT impact business metrics like RONA (Return on Net Assets ) which are used by investors to determine how well management is utilizing IT assets. These assessment points can help to confirm that the IT contribution is not constrained or limited to technology only, it needs to optimize business processes and build business capabilities for improving the overall organizational maturity.
The digital boards today need to ask more insightful questions about information and technology because leading companies across industrial sectors claim they are in the information management business. IT savvy boards will have the advantage of pulling enough resources and pushing the technology-enabled business change and innovation, forecast what could happen next confidently, and improve the directorship effectiveness and maturity.
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