Change and transformation have always been part and parcel of business.
But as business becomes increasingly global, digital, complex and competitive, the urgency to transform has become greater than ever.
One of the ways boards are responding is to increase investment in major, strategic transformation projects. These are significant undertakings that often impact the entire organisation as well as customers and stakeholders.
They are also very dynamic. The fact that a project can run for three to five years means operating and business circumstances will likely change before the outcome is even delivered.
With so many moving parts, the chances of getting it wrong are high. And the damage – both to the business and to reputations – can be great.
Take for example the launch last year of the Obama administration’s hard-won and highly publicised new health insurance program. While the administration was publicly assuring people they would have seamless online access to the new program, behind the scenes the project was in trouble.
On the day it went live the consumer portal crashed and was down for the best part of a month as millions of citizens tried to sign up to public health insurance. Poor governance and inadequate management oversight were identified as the main causes of the costly and embarrassing project failure.
Even though the need for confidence has never been greater, many boards simply lack visibility on the transformations. If they don’t have clarity about the project, how can they meet their obligation to provide considered guidance, oversight and direction to management?
Board members need to be confident that the initiatives they support will be truly transformational, and will deliver the vision and strategy they have committed to.
Unfortunately, disappointment is the norm rather than the exception. Almost two thirds of companies report that their projects don’t deliver expected business benefits.
The chances of being part of a transformation that works can be significantly increased by embedding real-time assurance across the full lifecycle of the project.
Confidence comes from thinking about risks, control and governance right from the early stages of project, with continuous monitoring against each of these during the full project lifecycle.
Considering the scale and complexity of current transformations, simply getting a periodic health check will not provide the level of confidence that boards are looking for.
For example, many transformations now involve moving parts of the business into the cloud. While this has tremendous benefits it can also expose the company to significant and ongoing cyber risks. It’s important that these highly technical and dynamic risks are incorporated into a governance system well before the business exposes its own or its customers’ data.
We have identified the 12 elements that if incorporated into a transformation can give boards confidence that the project will succeed:
These are the key questions that audit and risk committee members should be asking about a transformation they have oversight of.
And the answers they get will determine the level of confidence they can expect to have.