by Tony Harris
• January 26, 2021
Implementing a digital transformation agenda can be a complex activity for many organisations. Balancing risks and opportunities requires effective governance to ensure that digital transformation initiatives are adequately planned, funded and implemented. Unfortunately however, rigorous organisational governance is often neglected at the expense of rapidly deploying numerous technologies across the enterprise which not only adds complexity to the technology-stack but increases friction for many stakeholders. In this article, we’ll examine some key themes emerging when it comes to organisational governance and digital transformation.
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Many employee’s working inside large corporations understand the need for a cultural shift that leads to data-based decision-making and adaptability. PwC examined this in their article “Adapting to a New World: Facing the Challenges of the Post-COVID-19 Landscape“. The authors offer a view of how the pandemic affected the economy and how businesses need to respond to face higher levels of uncertainty and risk. The article encourages businesses to ‘rethink, repair, reconfigure, and restart’ and in some cases dramatically redesign their roadmaps in order to safeguard their business into the future.
Despite this, large businesses struggle against inertia to make sweeping changes. Whilst many at the executive level may understand the increased need for governance, it is often difficult to convince decision-makers further down the organisational hierarchy of need for a thorough governance regime. Without an organizational governance framework that supports rapid change, these organisations are at risk of falling behind their smaller, more agile competitors that know how to achieve a successful digital transformation through:
The sheer size of an organization in many cases prevents them from leaping forward and evolving at a pace that keeps up with technology. Often, organisational governance and digital transformation suffer an uncomfortable relationship within many organisations.
Department silos further contribute to the problems that large companies have with evolving organizational governance and digital transformation. Department heads who haven’t used a digital strategy before may not fully understand the need to change. They also may lack the competencies needed to take advantage of information technology, let alone newer tools like artificial intelligence and blockchains.
Some departments within the organisation might understand the importance immediately. It only takes a few holdouts to disrupt the digitization needed to build efficient business processes that lower costs while improving customer experiences.
The silo mentality resists change, so decision-makers may need to take steps that bring everyone in line with the new vision. When departments don’t want to abandon legacy systems, the CIO may face difficult hurdles finding a solution that leads to digital transformation. In some cases, short-term solutions could involve APIs that let new tools talk to legacy systems. Eventually, though, every system reaches the end of its usefulness.
Organisational governance and digital transformation are inherently linked in this regard – breaking down of silo’s across an organisation is a key function of a governance regime. Done right, an organisation’s governance program will deliver not only a lens of corporate risk management but will also generate continuity across the entire organisation.
It’s easy to understand why a company that has invested millions in its IT infrastructure doesn’t want to abandon its investment. Unless they gain new digital capabilities, though, existing IT infrastructures could prevent the business transformation needed to keep up with rivals.
It’s important to note that a new digital business doesn’t need to throw away all of its infrastructure. It does, however, need to rethink its operating model and focus on metrics that matter. There are several things standing between enterprise organizations and change. Regardless, they must choose to:
Ideally, someone like a Chief Digital Officer (CDO) takes control and makes it obvious how the enterprise must change. Importantly however, this change is managed through established organisational governance that can guide the organisation through this change in a controlled and effective manner.
A 2019 report from Deloitte states that “digital technologies, while they have facilitated more effective communication [between executives and board members] in some respects, have been a mixed blessing.” In several cases, communication tools failed because they didn’t offer the flexibility board members and executives needed. For example, people could only access documents via specific types of devices, such as laptops or smartphones.
Such a limiting approach makes it even harder for corporate stewards to see the value in an advanced technological ecosystem. Organisational governance from this perspective should foster a culture of ideation and innovation to ensure that new technologies are embraced as early as possible. Implementing the right forums and mechanisms to capture these ideas is a crucial aspect of any governance regime – particularly within IT or Digital & Technology departments who are responsible for the delivery of modern technology on behalf of the organisation.
Clearly, organizations need to take several steps that will ensure long-term success. Adopting the right tools and platforms is a core element of enabling this success. Technologies such as DreamFactory Software that can generate no-code APIs and connect your enterprise data can support businesses of all sizes make sense of digital transformation challenges.
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