Overcoming the challenges boards face with digital transformation
THE RECENT global shift in how organisations operate and manage day-to-day processes has put digital transformation at the top of many executives’ agendas – but how do business leaders make the transition?
It’s essential for businesses to keep up with an accelerated pace of change to stay competitive. This includes improving the customer and employee experience and prioritising innovation.
Consequently, boards are re-evaluating the transformation journey and looking to embrace a more digital mindset. This means moving beyond simply digitalising existing processes and doing things differently on a fundamental level.
However, this creates key challenges for boards, which will need to be overcome for transformation projects to be successful, according to RSM Australia.
Andrew Sykes, national leader for technology at RSM Australia, said, “The digital transformation plans that looked exciting and effective 18 months ago are no longer on the agenda for organisations.
“Instead, organisations of all sizes are looking more closely at how they can leverage people and processes, as well as technology, to achieve organisational goals.”
RSM Australia has identified five key challenges boards may face when embracing digital transformation:
1. Board members may not be technology experts
It is important for board members to get the right information regarding digital transformation so they can offer guidance and directives to ensure the transformation delivers value. This means getting advice from the right people, which can include various stakeholders within the business as well as younger members of the team that may be highly technologically capable.
Mr Sykes said, “While the chief technology officer or chief information officer is undoubtedly best-placed to lead transformation efforts, their voice is by no means the only one that should be heard when mapping out the journey.
“It’s important to get input from experts across the business that can provide insights into how transformation can resolve a range of business challenges. Line-of-business leaders, for example, have invaluable insights that can drive transformation efforts to become more successful, faster.
“And, while more experienced members of the board are usually the ones to guide organisational strategy, when it comes to new and emerging technology, younger staff members can often provide exceptional value. Decision-makers should consider leveraging the knowledge and experience that younger team members may be able to provide; after all, they represent the future of both the company and the market in which it operates.”
2. Technology may not have been a focus for the organisation in the past
In many organisations, technology evolves as an afterthought or as a piecemeal approach to specific challenges. For digital transformation to succeed, it’s important to shift board members’ mindsets towards making technology an integral part of every business activity and decision. It may be advisable to form a technology or transformation committee to account for all the various moving parts that are inherent in a digital transformation.
Andrew Sykes said, “Boards should ensure that technology is a deliberate and considered part of the business strategy. Allocating transformation efforts to the audit committee or the governance committee, as is often the case, can introduce blind spots that compromise the transformation’s success. A separate committee can overcome this challenge.”
3. Boards may not be prepared for the pace of change
While many organisational change projects can take months and years, boards should be prepared for fast-changing digital transformation projects. This means it’s essential to keep on top of the project’s short- and long-term goals and ask executives to demonstrate how current activities align to those goals.
Andrew Sykes said, “Boards should expect the transformation journey to move quickly and be prepared to ask lots of questions about how transformation activities will provide benefits, including the anticipated time to value. This can help keep projects on track.”
4. Transformation projects may stall or be derailed without board support
It’s essential for the board to provide strong leadership around transformation to ensure it delivers on its promise for the business. As with any initiative, the success of digital transformation will depend on buy-in and vocal support from the top down, and this starts with the board.
Andrew Sykes said, “If the board makes it clear that a successful digital transformation is a key priority, this will help managers allocate time and resources to transformation initiatives. This may require a cultural shift, which can be tough for boards that aren’t used to failures. However, failing fast and moving forward is an important feature of successful transformations, so the board will need to reinforce this type of culture.”
5. Talent is hard to find
Board members tend to view a lack of talent as one of the biggest barriers to digital transformation. In fact, people are one of the most important factors in the success or failure of digital transformation projects. Boards can help to overcome this challenge by formulating individual development plans for critical employees.
Mr Sykes said, “Making sure strong internal staff members have the training they need to maximise the value of transformational technology is crucial to the success of transformation initiatives. Too often, organisations put training last on the list; instead, it should be near the top. Great training and development programs can significantly impact the success of digital transformations.
“Digital transformation has rapidly become one of the most important priorities for board members. As the economic landscape and operating environment continue to evolve, businesses are increasingly relying on successful digital transformation projects to keep them agile, responsive, flexible, and competitive. Boards must play their role in this by embracing digital transformation and acting decisively to support and promote transformation initiatives.”