24/5/2020 Digital Transformation Oversight Extends Beyond Technology

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Digital Transformation Oversight Extends Beyond Technology

ISACA NOW BLOG

Digital Transformation
Oversight Extends Beyond
Technology
Author: Guy Pearce, CGEIT
Date Published: 3 September 2019

Digital transformation. Digitalization. Digitization. Three business terms in common use today
that describe the differences in scope of the organizational digital effort, in this case in order
of decreasing scope. Unfortunately, the rst word of the term “digital transformation” seems
to receive all the attention, with the second word left to scrabble for the scraps. This could be
because digital technology efforts are already di cult enough if they are considered in a
corporate context rather than as a silo, while the associated transformation efforts—largely
involving people and business transformation—are even more di cult. For technology efforts
however, forgoing the people component readily results in the expectations of the investment
not being met.

The distinction between the scope of the three previous terms is important from a
governance context, as it drives the nature of the oversight required. In this case, a board,
concerned not only with compliance, but also with the organization’s sustainability as part of
an approved corporate strategy, would generally be more interested in the scope and impact
of digital transformation and less in digitization.

Given that a board is concerned with an organization’s sustainability and competitiveness, it is

particularly interested in the alignment between business and IT, the associated capital and

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24/5/2020 Digital Transformation Oversight Extends Beyond Technology

operating costs, and the (strategic) bene ts this investment and expenditure would enable. It
would also be interested in ensuring that the capability exists to properly leverage the
investment to bene t stakeholders such as shareholders, customers, employees and
regulators. Note that the latter 2 sentences have implications for the organization’s entire
operating model—people, process and technology—and its business model.

The value created by digital transformation materializes in the organization’s business model
in the way the organization makes its money. So, if an organization’s operating model
becomes more e cient—resulting in lower operating costs per unit of sales or per
product/service sold—shareholders will see this as increasing pro tability. If digital
transformation results in greater integration across the organization, then customers will see
this in the consistent way the enterprise communicates with its customers across all its
channels, whether branch, kiosk, telephone, mobile, Internet or other.

My recent Journal article helps bring it all together for the practitioner, illustrating how the
operating model, people, the business model and measures of success are all key
components of the oversight of digital transformation, and the relationships between them in
the context of the organization’s strategic milieu. It ultimately explains why digital
transformation demands quality oversight at the micro, meso and macro levels and describes
steps that help protect the organization from sub-optimal digital transformation decisions
that could hamper rather than grow the organization’s competitiveness and sustainability.

Read Guy Pearce's recent Journal article:

"Enhancing the Board’s Readiness for Digital Transformation Governance," ISACA Journal,
volume 5, 2019.

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