4IR: The Board’s Perspective
The board’s role in governing technology use – now known as ICT (Information and Communications Technology) – is increasing and accelerating, especially so given the COVID-19 pandemic.
In a nutshell, ICT governance requires ensuring alignment of technology with the company’s strategy, overseeing technology implementation, and assessing the impact of the technology on the business as a whole – and more specifically, on its ability to achieve the company’s strategic objective.
All companies are exposed to ICT at various levels and in various ways, making this an essential element for directors (and boards) to understand better.
In governing technology, a board’s posture must be inherently sceptical merely because of three essential requirements: ensuring the company’s best interests, governing from both a protection and a strategy point of view, and ensuring that the structure, tools and influences that the business is subject to all align to support long-term business sustainability and well-being.
Who is using who?
Digital is everywhere. First and foremost, directors need to ascertain whether they are directing the use of technology in the business or whether the functionality and availability of technology is directing them and their decisions.
Furthermore, the conversation about digital is everywhere. Who leads this conversation in your business? Do they know what to be aware of in terms of the impact and governance of technology – and is this part of the technology decision?
Start at the Beginning
While technology has unlocked a myriad of options and significant value, and made commonplace what was inconceivable a few generations ago, it has also begun to influence decisions that we make. Technology is an accelerating train that often over-equips us, which complicates assessing its cost versus its contribution. It is also an enabler of strategy which is supported by the people in the business. Conversations around strategy therefore need to take place bearing both in mind.
We seem to have shifted our thinking from getting tools necessary for business to getting whatever is available – thinking that we will surely eventually find a use for it. Avoid stepping into this expensive trap that is quite likely due to much technology (especially software) being invisible, and conceptualising its full potential and use difficult.
Each board needs to have the right people who can ask the right questions from the start when considering updating or implementing new technology:
- What should we be reading and considering about technology and its impact?
- Where do we get reliable and objective information from?
- Do we understand what we are looking for from technology?
- Do we fully understand what this technology offers us?
- Can we really benefit from its promises?
- What will the bottom-line impact be – and what would we measure progress against?
Remember that as an enabler of strategy, technology is there to create new ways of achieving your objective, improve ways of working and make things more time and cost efficient. If the technology that you choose to use does not do these things at its essence, it is not for you. On the other hand, if it achieves this in a measurable way, it is certainly worth considering.
Looking Towards the Future
What technology is capable of now and is projected to be able to do in the future, is mind-boggling and frightening at the same time.
Board members need to consider the current combination of technology in the business, including what is and is not necessary to achieve the strategy i.e. what each element does and does not do, which elements are actually needed, and which simply come along for the ride.
They need to also consider whether they and the operational teams can use the available tools effectively – in the way they are designed to be used – and what it would take to enable them to best use these tools.
Consider investing in new technology based on the answers to these questions. It is generally a big investment which requires intense scrutiny before committing. After all, the board will ultimately be scrutinised if technology is not suitable or if the returns are sub-optimal.