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Technology enables business strategy: Is your board talking about it?
Boards need to play a part in technology discussions. They need to understand and discuss the company’s technology capabilities and the value technology delivers for the company with the CIO, CTO, or other technology leaders. They need to understand future IT expansion plans. And they need to know how they align with the short- and long-term business strategy.
As the role of technology moves beyond front and back office to edge closer to consumers, manufacturing facilities, and connected devices, the role of the technology leader has morphed into a value creator. The board should foster relationships with the CIO, CTO, or other technology leaders to make sure there is an open channel to share information and concerns.
60% of CIOs think their board is not very effective at developing relationships with senior leaders
To understand the impact of technology across the value chain, boards should be asking the following questions:
- How are technology changes impacting business models in our industry?
How do we leverage digital technologies and data to transform customer interactions?
How are we using technology and data to digitize our back office functions?
For each business strategy we pursue, what technology and data capabilities do we need to make it successful?
How are we utilizing data to improve our business?
84% of US CEOs say they will increase digital transformation investment in 2021 in light of COVID-19
Knowing the technology enabled advantages, disadvantages, and risks is important. Boards should consider the following questions:
How do our technology capabilities compare to established (and new) competitors?
How are we addressing the risk of digital disruption?
How are we assessing cyber risk? What does best in class look like and where are we on the scale?
Focusing on technology leadership and investment – what boards need to ask
How much do we spend on technology and are we spending it in the right ways?
What resources do we have to help us design and deliver technology?
Do we have the right digital leadership and governance model to address critical technology and data investments?
Do we have a transformative technology leader or is this individual simply a caretaker?
56% of directors agree or strongly agree that their company leadership is digitally savvy and helps the workforce think in new ways
In conclusion
Boards should be actively engaged in understanding how the company is modernizing its technology to keep up with the latest developments, remain competitive and relevant, and capture opportunities to improve operations and market share.
For companies that take the next step to make a significant technology investment and go through a major digital transformation, board oversight is critical. The board should focus on the strategic plan, risks and opportunities, the change management program, and performance monitoring.
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