The future can be bright for companies whose boards set high expectations from technology. Others may not fare so well.
This series explores how the board of directors can help the company leverage technology to create a differentiated customer experience and sustainable competitive advantage. Let’s take a look into the future and anticipate how this view from the board may play out.
Digital transformation may be thrust upon you, but then it’s probably too late. Your competitors, including startups and companies you may never heard of, are looking to disrupt your business. Now is the time for the board to challenge management to leverage technology. If you wait too long, you may spend years playing catch up – or worse.
If your CIO is not business first and technology second, then the board and CEO must decide if it’s the right fit. Given the opportunity, many CIOs will make the shift in mindset and strategy. Some cannot. If your CIO Is not able to align with, and drive, enterprise strategy, then it’s best for the business and the CIO to part ways. That doesn’t mean there’s not a role for the current CIO. I was brought over the top of the IT leader in two large companies. In both cases, the former incumbent thrived in a role reporting to the CIO. And the businesses were able to apply technology in ways they never realized before.
Perfection is a journey, not a destination. Many companies fail to measure the value of IT. When they start to measure IT, the metrics may be good or bad, or they may not be meaningful with no baseline to compare. That doesn’t matter. What matters is that we now have a starting point. The board then needs to see continuous improvement and measurable results from the application of, and management of, technology. We’ve written a lot on Measuring the Value of IT, the IT Value Journey, and IT Value Creation. See our blog at https://WolffStrategy.com/blog/ or contact us for more information.
There was an exciting phenomenon that started 30 or 40 years ago. We saw IT leaders becoming general managers, division presidents, COOs, and CEOs. That was because IT was supporting nearly every business operation and IT leaders were gaining a comprehensive and deep understanding of the business. Now, as technology plays a much more strategic role in the business, we’ll see more and more savvy CIOs serving on corporate boards. What better way to challenge management to leverage technology than to have solid CIO experience on the board?
Data is the new gold. While the board has long been concerned about return on assets, they will start to include data in that analysis. More companies are understanding the value of their data and are finding ways to use analytics and artificial intelligence to drive better informed business decisions, like targeting new markets, improving the supply chain, and more.
Too often we see an IT strategy as a subset, or disjointed from, the business strategy. Going forward, we will see technology embedded in the business strategy. We’re not looking for a separate strategic theme or set of objectives related to technology. Rather, each strategic objective will be forced to embrace technology and demonstrate how technology will create a competitive advantage.
Cyber attacks, including ransomware, are increasing at an alarming rate. While public companies may be audited for IT governance, too many boards lack visibility into the true state of their company’s cyber resilience. Expect boards to demand greater visibility into IT governance and cyber resilience as a result of technology continuing to increase in strategic importance.
Traditionally, the CEO and other business leaders report to the board on progress of strategic initiatives. Separately, the CIO might present the status of some significant IT initiatives. As technology becomes embedded in the corporate strategy, expect non-IT business leaders to take the lead on strategic reporting as the executive sponsors of key, technology-based strategic initiatives. That will put more pressure on the CIO to report on IT performance to help deliver these projects. That circles us back to the need for solid IT metrics that show continuous improvement in service, performance, and governance.
Finally, expect the board to become “less shy” when it comes to asking about technology. Again, boards and CEOs don’t need to understand technology, but they must understand the value technology can create. And, with that, they will continue to increase pressure on management to leverage technology to improve shareholder value.
This series is a Board Guide to Leveraging Technology and explored:
- The Relationship Between IT and the Board
- How to Embed Technology in the Business Strategy
- Measuring the Risks and Benefits of Technology
- Questions the Board Should Ask
- How the CIO Should Prepare for Board Meetings, and
- Looking Ahead at what we can expect in the not-too-distant-future
Our intent has been to give boards and management, including the CIO, some guidance and tools to increase transparency around technology initiatives and services, and provide objective measures to ensure technology is creating value.
Ultimately, the board can challenge management to leverage technology to create a differentiated customer experience and sustainable competitive advantage.
These articles are purposefully brief and aim to provide high level guidance and trigger ideas. As always, if you want more information or don’t want to wait for all the upcoming articles, email Emily Ford at Emily@WolffStrategy.com and she’ll set up a complimentary 30-minute consultation with me.
Larry Wolff is the founder & CEO of Wolff Strategy Partners, a boutique consulting firm specializing in Enterprise Strategy Management, Digital Transformation, IT Leadership, and Executive Coaching. Larry has served as CEO, COO, CIO, Chief Digital Officer, and management consultant for public, private, international, and emerging growth companies. His specialties include corporate and IT strategic planning, technology led business transformation, business and IT turnarounds, merger integration and large-scale project rescues. His methodologies span industries and scale to companies of all sizes.
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