New technologies undisputedly drive better results, allowing for products and services to be delivered more efficiently, improving margins, enhancing customer experience and ultimately helps ensure that the business remains relevant and does not lag behind.
Data and technology are becoming central to almost every operational strategy and directors need to go beyond merely being aware of developments but be prepared to actively engage in discussions and make the necessary decisions. In order to do so, they need to be able to understand what their company’s tech know-how is and assess any gaps. The Board needs to be able to determine whether the available tech can deliver on their business strategy.
Before being able to properly oversee the technology drivers, Boards need to be asking the right questions. How do current technology capabilities compare with those of competitors? How is the risk of digital disruption being addressed? How is data being utilised to improve business performance? Is the data underpinning business decisions of the highest quality and accurate? Are we spending the right amount on technology and in the right way? If tech expertise does not currently sit on the Board, engaging external consultants can help with asking those right questions.
For those companies that decide to embark on technological transformation and innovation, Board oversight over such transformation becomes key. Naturally, some boards may delegate oversight responsibilities to a duly set up, dedicated committee. The lack of available digital skills - business analysts, data scientists, data analysts, developers and other digital roles - could prove to be a recruitment issue but Boards could also address talent gaps by offering the opportunity to upskill employees and create incentive programs for those who use new technologies and develop new skills. Having a talent strategy around digital transformation becomes key and Boards need to have a plan on how to get the needed skills.
The digital transformation process and the technologies it brings about generate an enormous amount of data which in itself leads to a higher risk of data fraud, theft or misuse. Simultaneously, data can be unlocked to create new revenue streams, drive better decisions and better assess customer behaviour. The relationship between the CIO and the Board becomes critical here to ensure that all relevant risks are assessed and managed whilst ensuring optimisation and quality of any data gathered.
As digital transformation becomes more a necessity and less an option, considerable thought needs to be given to a number of aspects - strategy, culture, risks, opportunities, talent, change management and reporting. Efficient Board oversight is a must to ensure the process is successful in addressing one of the biggest challenges facing businesses today.
