Board helping Technology and IT organization.
Board members must be on the same page to discuss Technology and IT organizational performance. They must understand concepts such as time to market, agile product development, platforms and delivery mechanisms, and strategies to analyze company data. The board then could help the C-suite optimize resource allocation by expanding the support for winners and dumping the losers.
Here are some questions the board members could ask about Technology and IT organization effectiveness.
- How effective is Technology and IT in enabling the core business?
Today, companies invest more in digital initiatives to gain critical process efficiencies, launch new products, and enter different markets. These initiatives span multiple functional areas. Boards must accurately gauge the Technology and IT organization’s performance in implementing technologies that allow core business activities to happen and act as a true partner with the business rather than just a service provider.
For example, board members and executives at an IoT company recently reviewed a project’s progress to digitize the customer provisioning process. They focused on three performance metrics:
- The time and ease to provision a new customer (in minutes),
- Activate a new customer, and
- The percentage of automation within the process (compared with the old one).
The senior leaders approved launching digital initiatives that would decrease the provisioning time and quickly activate service to the customers while increasing the ease of user interface. They recognized that the resource allocation would change as the customer base grew and support was required for advanced applications. After reaching certain milestones, they agreed to revisit the metrics, priorities, and budgets.
- What are the critical Technology and IT projects, and what value is the company getting from them?
Cost is already a significant part of the dialog in most boardrooms. Assurances of value should be part of the dialog as well. The board members and the senior team understand that they may need to invest millions, if not billions, in Technology and IT over the next planning period. They also know that the funding required to implement the Technology and IT projects is typically in short supply. Therefore, boards must actively monitor the most critical projects and learn whether they deliver the promised outcomes. Tracking a project’s benefits will mitigate the risks of failure.
- Is the Technology and IT organization agile in developing and deploying changes and improvements, e.g., features and functions?
How long does the Technology and IT organization take to deliver new features and functionality ready for market launch?
Many companies using the “Supply Chain” business model can no longer afford to delay product or service launches or upgrades– not when online companies can deploy new functions and features on their “platforms” several times daily and from many different suppliers. Technology and IT organizations must emphasize time to market and refocus on two speeds.
- Product Management / Development –IT must rapidly launch innovative end-user applications or upgrades and
- Maintain slower but reliable existing transactions-oriented back-end systems.
The board members and the senior executives must understand the infrastructure, resources, skills, and capabilities required to operate at both speeds.
- Is the company leadership satisfied with the efficiency of Technology and IT organization launching new technologies and achieving company-stated goals?
Infrastructure operations, application development, maintenance, and security account for about 90 percent of spending in a typical IT organization. Boards, executives, and IT leaders must agree on what IT is achieving and its efficiency in achieving the desired results.
Boards often monitor implementation metrics, can ensure optimal returns on IT projects, enter the market quickly with new products and upgrades and keep the overall costs below the agreed-upon threshold. Simultaneously, the board and the leadership must ensure that the technologies used are robust for long-term dependability.
- How strong is the company’s next-generation IT human resource talent pool?
Talent management is one of the three top issues in a Technology and IT organization. Technology and IT organizations increasingly participate in endeavors requiring technical people to extend beyond traditional roles—data analytics or mobile app development, for instance—while maintaining legacy systems. The changing expectations create more opportunities, new risks, and pressures among Technology and IT teams.
Boards, CTOs, and CIOs must be on the same page regarding skills and capabilities needs, current and future. The senior team can manage the skills and talent pool along three dimensions:
- How often are employees rotated to learn various facets of Technology and IT organization and business?
- What percent of people does a Technology and IT organization hire from the outside?
- How successful has the Technology and IT organization been in growing people in-house to fill the key positions?
By asking these questions, boards can constructively discuss technical projects and processes. It also helps the boards to compare the company’s capabilities against those of the competitors and address two significant challenges the executives face.
Challenge 1: Deciding which new technologies should receive more funds. The management has often earmarked spending for specific initiatives — for example, platform-based delivery mechanisms and AI tools for data analysis. Can the board members understand and help identify the right areas for higher investment?
Challenge 2: Technologies influence and shape business models and customer strategies for tech-enabled offers. That means:
- Higher complexity
Technology and IT organization is no longer a collection of standalone modules of systems and applications. It is a network of interlinked applications, interfaces, databases, and abilities to interact with external networks and systems.
- Higher risk
Security breaches at large and small organizations are occurring more frequently. Cybersecurity has thus become a frequent point of discussion in the boardroom. Most board members still need a greater understanding of what cybersecurity is all about.
These five questions are only part of the complete answer. But they can help move boardroom conversations toward the costs, capabilities, and value that Technology and IT organization engenders.
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