Successful CIOs driving their organization’s Digital Transformation strategy need to help board members understand and make decisions on key digital capabilities. Brian Ferreira, VP Managing Executive Partner at Gartner, suggests three approaches CIOs can adopt to enhance their engagement with the board.
As Australian businesses continue to navigate the COVID-19 crisis, boards and CEOs are increasingly focused on digital capabilities to ensure a strong business recovery. This means that CIOs now have to engage with their boards far more frequently.
According to the 2021 Gartner Board of Directors Survey, 69% of boards accelerated their digital business initiatives in the wake of COVID-19 disruption. Almost half anticipate changing their organization’s business model as a result of the pandemic.
Technology-driven Digital Transformation can, and should be, a strong enabler in addressing employee, customer, supply chain and broad brand impact, to position an organization to come out of the crisis stronger.
This means that CIOs must understand the board’s core concerns, evaluate its most pressing business challenges and chart its changing priorities to deliver for the business. While the focus on driving revenue stays the same, the board’s attention has dramatically shifted to managing risk through digital capabilities to renew the business model and operations.
I recently spoke to the CIO of an Australian travel and leisure business severely impacted by the crisis. While the board continues to look at the long-term recovery of its brick and mortar travel stores, the focus has pivoted towards new digital services to survive, in addition to expanding into new leisure products for revenue growth. It’s the CIO’s role to guide and support the business through this transformation and set it up for long-term success.
Successful Australian CIOs understand how to execute on the board’s key priorities – accelerating business initiatives, improving operational excellence, achieving higher levels of business cost optimization, increasing business model transformation and building digital capabilities.
There are certainly times when boards and CIOs find themselves at a spend tension point. Often executive management is more focused on responding to the crisis, while boards attentions are on spending for renewing the business. But this opens the door for CIOs to implement new digital capabilities in core back office systems, which stabilises the business and supports longer term growth.
Funding digital initiatives is tough
With the backdrop of increased debt to fund growth in Australia, the Reserve Bank of Australia estimates the economy will shrink by 6% by the end of this year and responsible lending laws have been relaxed to increase the flow of money for consumers.
Digital initiatives are critical to support Australian businesses during this time of uncertainty. While boards are willing to spend more on technology to do this, funds are being released slowly. This is largely due to CIOs not being able to help them understand and make decisions on key digital capabilities.
There’s a lack of a clear path for long-term technology investment, coupled with a short-term mindset of strategic cost management. Now’s the time for CIOs to shape a realistic post crisis strategy.
Finding synthesis with the board
To tackle these challenges in a new way, there are three approaches CIOs can adopt to change their engagement with the board.
- Debate the board’s technology posture
Some of the CIOs I’ve seen successfully engage with the board have challenged them on their technology skills and talent to ensure a non-executive director (NED) sits on the board as a sponsor. By teaming up with a NED, CIOs can collaborate on board technology agenda items and deliberate on technology business cases. NED’s can also help with pre-board discussions to facilitate informed and higher quality technology decisions.
- Implement enterprise technology governance
For the future of digital investment and execution, it’s important for CIOs to shape and integrate technology governance with business governance. This is becoming front of mind for board duties, responsibilities and board performance. It helps boards to direct technology strategy, investment, risk and governance for technology innovation and value creation.
- Establish a technology advisory board
Technology advisory boards are a growing practice among mature thinking Australian CIOs, particularly within the finance, insurance, utility and mining sectors. These advisory boards are the underpinning vehicle to influence the board’s technology posture and uptake of enterprise technology governance.
In practice, they offer a governing organizational level advisory committee that facilitates and prepares board related agenda items and papers designed for technology decision, assurance or discussion content. This helps embed structured and consistent board engagement.
Almost all board of directors in Gartner’s survey expect functional leaders to collaborate with one another during COVID-19. More than half believe that CIOs serve as partners with senior business leaders, while over a third look to the CIO to lead digital business issues alone.
By adopting these approaches, CIOs put themselves in a much better position to increase their board participation. In turn, this will help strengthen the board’s post recovery business strategy and overcome the key challenges businesses now face.Click below to share this article