Technology in the Boardroom

One of the comments made about my article – Architecture in the Boardroom – started with …

Architecture is too closely connected with technology to get anywhere near the Board.

I was quite concerned by the implication that technology is not part of Boardroom discussion and decisions.   This prompted thoughts about the various ways in which I have seen Boards dealing with technology, including:

• seeking to achieve greater diversity in their composition, including recruiting Directors with greater understanding of the business opportunities and risks associated with using technology
• establishing subcommittees to give more specific attention to their use of technology, both with respect to the opportunities it might afford and the risks arising from ineffective management and use of technology
• considering the implications for their business strategy, business models and operating model arising from the market disruptions occurring through more effective use of technology by customers, suppliers, competitors and regulators
• considering the way in which digital service offerings and use of digital channels can enhance the value proposition for existing and new customers
• considering how digital service offerings can lead to disaggregation of their value chain or the value chain of other providers

So … 

Where could technology come into Board conversations and decisions?

Any organisation establishes and maintains the necessary capabilities to fulfill its business strategy, as an appropriate blend of the following resources – people, finance, assets, consumables, information, processes and technology. The extent to which the board needs to be across each (or any) of these depends on whether they have implications for the capabilities critical to its business strategy.

The challenge for boards is that often insufficient attention has been given to the information resource, and some of its distinctive characteristics (eg. multiple vs single use). This leads to further issues in relation to effective understanding and management of technology which enables more effective management of information and associated processes.

CXOs and particularly CIOs have not been effective in informing, advising, educating and supporting colleagues and the Board about these issues. Having reliable, independent and objective information about business capabilities and supporting technology, couched in strategic business terms is essential to enabling boards to participate in decision-making about information and technology.

Five dimensions which can be used to frame Board thinking and questions about technology are: 

1. Strategy
2. Performance
3. Risk
4. Accountability
5. Composition

The following questions might be asked in each of these areas.

Strategy

• What digital products or services might offer additional value to existing or prospective customers?
• How might use of digital channels offer additional convenience and value to existing or prospective customers?
• How might use of technology by our competitors diminish the value proposition or differentiation of our products / services to our customers

Performance

• How might use of technology enhance our operating model and enterprise performance, reducing the cost of operation or time to market for new products / services or enhancing the quality of our products / services?

Risk

• What are the risks to our business in relation to our use of technology?
• What are the risks to our business in relation to our adoption of technology and transformation of our enterprise?
• To what extent do we adequately assess the risks associated with strengthening technology enabled capabilities ie. in executing business strategy and managing change?

Accountability

• How do we hold the appropriate managers accountable for delivery of enterprise change and transformation?
• How do we hold the appropriate managers accountable for realising the benefits of the investments we make in enterprise change and transformation?

Composition

• Do we have access to the appropriate knowledge and skills to address the above questions, either at the Board table or through other channels?

  This is the second in a series of articles for Directors, Boards and governing bodies.  The first article – Architecture in the Boardroom – provides links to two key models which can be used to assist in exploring a number of the questions suggested in this article.

Other series available:

• Enterprise architecture – plain and simple
• Enterprise architecture – digging deeper
• Enterprise architecture – principles

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