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The last three years have seen a rapid acceleration in the use of digital technologies in business, with a report by global management consultancy McKinsey showing most companies are now several years ahead of schedule on any planned digital transformation.
The boardroom challenges created by the sudden speed and scale of the adoption of new technology have been well documented, especially among businesses more wedded to legacy systems.
It’s no longer the case that digital transformation is a departmental issue or something pushed by IT. Digital transformation today requires digitally savvy boardrooms that understand the opportunities and risks of technology.
Corporate strategies have converged with digital strategies, and both require complete investment and understanding from the boardroom.
In this blog, we look closer at why digital transformation is now a boardroom issue.
Historically, boardrooms have focused on creating financial returns when considering new investments. Anything that didn’t generate an almost immediate financial return failed to get traction.
This can sometimes conflict with the aims of digital transformation projects when the goal can be a small improvement that delivers results over the long term.
Digital transformation can also require some experimentation, with new systems brought in to either succeed or “fail fast” and deliver learnings that can be applied to find improvements.
Boardrooms that are open to adopting a more agile approach to digital that allows their organisation to test, trial and improve processes using digital technology in order to drive change are more likely to succeed.
Being a digital business is more than just automating manual processes or migrating on-premise platforms into the cloud.
Digital technology should provide a platform that allows a company to react quickly to market conditions or pivot in the face of new challenges – and this includes challenges in the boardroom and strategic decision-making.
Look at how the rise of remote working has completely changed business models.
To operate today, businesses need a much wider range of digital channels that many board members likely didn’t even consider a few years ago.
Communication today is more than just connecting teams and customers, it also needs to manage communications between employees in multiple locations, even across different countries.
One of the main changes boards are tackling now is the use of smart data analytics.
The rise of mobile, cloud and technologies like artificial intelligence, machine learning and the Internet of Things has created a huge opportunity to gather, analyse and utilise real-time data from across an entire company.
By breaking down departmental siloes, boards can get complete oversight over how the company as a whole is performing, as well as use data to anticipate changes or challenges further down the road.
For example, department efficiency can more easily be analysed to uncover bottlenecks that are preventing tasks from being completed. Data can also be used to find opportunities for laborious, manual tasks to be automated, allowing teams to focus on more value-driven or creative work.
Similarly, markets and business environments can be analysed in real-time to uncover valuable insights like customer satisfaction or trade volumes. This data can be used to guide changes to customer service (like investing in contact centre technology) or to make changes to supply chain operations.
Another key reason digital transformation is now an issue for the boardroom is that legacy thinking among employees can stifle change.
This lack of willingness to adopt change is usually trickled down from the boardroom, with employees being too concerned about hitting financial targets than embracing new ways of completing tasks.
A fully digital culture embraces growth, experimentation and risk – even if the commercial benefits aren’t immediately obvious.
Instead of a top-down corporate structure, boards can set the vision and direction for the company to follow, and then give teams the autonomy to get there.
A digital strategy usually focuses on a couple of areas:
While businesses can improve by focusing on one of these areas, the most successful are those with boards that look at both.
From an external perspective, looking at how digital technology can change customer-facing processes to improve services can elevate companies above the competition and give them a new differentiator to win new business.
Internally, digital technology can streamline how teams operate or communicate to make processes more efficient and break down barriers between departments.
Boardrooms have, typically, had a conflicting relationship with technology.
If the technology brings immediate financial returns, it achieves board approval.
If the benefits are experienced over a longer time horizon, then change can be stifled before it’s ever had a chance.
A more digitally savvy boardroom is critical for creating the right culture for a business, not just in terms of the overall direction of the business, but also the way a company promotes innovation.
Digital technology now touches every area of a company.
From finances to processes and systems to culture and talent, boards should see IT as part of the core business strategy and operations.
Boards don’t need specialist knowledge of technology. Instead, they could set the direction of the business and then lean on the knowledge of in-house experts to drive the strategy or assess opportunities and risks.
Strategically minded digital-focused boardrooms can provide invaluable oversight and can be in a better position to understand potential gains in the adoption of digital transformation.
At Elite Group, we have helped a wide range of businesses uncover improvements in their processes or find new opportunities through digital transformation.
Our experts are on hand to consult on your existing challenges and provide advice on the best digital technology that can help you achieve your goals.
If you want to find out how digital technology could benefit you and your business, reach out to our experts today for a consultation.