Why Should IT be Considered in the BoD’s Agenda?

IT becomes so critical to the success of the organization nowadays. Many times, it is a determining success factor for your business strategy to achieve fast growth and long-term sustainability. 

Many organizations are on the journey of digital transformation which represents the next stage of business maturity and will improve how the enterprise works and interacts with its digital ecosystem. An effective board plays a critical role in steering changes and ensuring the business is on the right track to reach well-defined business goals. Organizations rely more and more on information & technology, why should IT be considered in the BoD’s Agenda? What are important oversights the board can offer about Information & Technology?

IT as an integral and increasingly important aspect of business strategy development: Information is growing exponentially and technology needs will only expand. IT strategy is an integral component of the business strategy. IT investment of the organization can either lift or break a business easily nowadays.  In fact, IT becomes a decisive factor in the business’s long-term prosperity. Having an information-based strategy requires people to think really ahead. But there are quite a few issues need to be clarified. Many companies miss the strategy for how they use technology to manage the business of the business vs. just managing the business. Most companies are lacking a holistic strategy for how they use technology to drive their business, and it's the information management strategy that most often goes unmanaged. Or if any organization develops a strategy at the function level independent of direct and specific dependencies on corporate strategy, they are doing a disservice to the company. From IT investment perspective, there seem to be three choices organizations could make: ignore emerging digital trends, jump on the bandwagon even if you don't know what you are doing, and embrace the digital technology and practices, finding ways to create strategic value. The board’s IT oversight can guide the business making the wise IT investment and scrutinize IT management effectiveness by asking: Can information technology help to design new business models? Is the business model scaling the right way to achieve the strategic objectives? Are there things that can be done to direct more cash towards development activity, besides just re-allocating budgets and cutting headcount? BoDs should concern about the potential opportunities and risks the digital technologies could bring to the company.

IT as an integral and increasingly important aspect of ongoing business viability: The emergence of potential opportunities and risks for exploring digital is likely to follow a nonlinear pattern with exponential speed. The digital transformation is now spreading rapidly to enable organizations of all shapes and sizes to reinvent themselves. The art and science of Information Management are to optimize its usage, achieve business value, develop the long term business competency and viability. The board’s IT investment review and strategic oversight help to fill the blind spots and bring a new perspective on improving information system effectiveness and efficiency, developing a creative workforce to maintain viability and delivering high-quality business results. 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. A viable digital organization can deliver impressive business outcomes and improve its performance by leveraging the abundance of information and emerging digital technologies as well as taking continuous digital practices to improve manageability.

IT as an enabler of, but not the only aspect of, business capability development: The radical digital brings organizations dynamically into the full-spectrum of transforming an organizational mixture of systemic-intensity-related capabilities, business maturity challenges, and strategic paradoxes. High mature digital organizations build the digital premium into the very foundation of their companies such as digital thinking, culture, structure, processes, etc. IT plays an important role in interpreting business issues into a technology solution and an IT-enabled business capability. The board’s oversight of information management agenda helps to highlight the strategic perspective of IT and enforce the role of IT as a strategic linchpin. It is also healthy for the BoD and Senior Management to honestly assess their company's core competencies, performance, and potential. How does IT enable business capability development? What developments in the capability and use of information technology are critical to the strategic future, and how to responding to them? What limitations are imposed on strategy by the constraints of the information technology currently used by the organization and in the digital ecosystem? Many components of business capabilities are common and reusable across the enterprise. To shorten the time cycle and save the cost for building business capabilities, the high mature digital businesses also do the great work to preserve core competency even as management expands and redefines the business. Building a lego-like digital organization is all about mastering dynamic planning & competency building, reinventing business but not reinventing the wheel. he IT-savvy corporate board also has a great impact on the business ecosystem woven by information technologies nowadays. The digital ecosystem is so information-intensive and technology driven. It seems that the industry sector is already an outdated concept. The board oversight of information-driven innovation agenda will directly impact business growth and organizational competency for the long run.

IT becomes so critical to the success of the organization nowadays. Many times, it is a determining success factor for your business strategy to achieve fast growth and long-term sustainability. Hence, the digital boards today should put IT management oversight on the top agenda, invite IT leaders to the big table, and review information agenda thoroughly, to steer organizations taking a big leap at the journey of digital transformation.

Posted in: Board Room,IT Innovation,IT Transformation