Today’s digital economy sees established enterprises competing against start-ups, all enterprises worried about risk, and smart enterprises deploying digital technologies capable of transforming their enterprise, and enabling better business-to-customer interactions and relationships.
Opportunity abounds; our global digital economy presents new possibilities almost daily. The problem is, not every enterprise is taking advantage of those opportunities. ISACA’s recently released Digital Transformation Barometer research shows that slightly less than a third of enterprises are making it a priority to evaluate the opportunities emerging digital technologies might bring on a frequent basis. That means more than two-thirds of enterprises aren’t realizing their full potential in the digital economy.
Some of that may be due to a lack of familiarity; it is difficult for some who serve on boards and as C-suite leaders to have confidence in technologies with which they lack background. Absent that confidence, it is difficult to put forth a vision for an enterprise rooted in digitally transformative technologies. For many enterprises, this means passing up opportunities to explore tools such as artificial intelligence, big data and analytics, sensor-defined networks and Internet of Things devices, and distributed ledger technologies like blockchain. This, too, was borne out by ISACA’s research; enterprises without tech-savvy leadership don’t explore opportunities as often as enterprises with tech-savvy boards and C-suite leaders.
Unexplored opportunities mean unexplored new revenue streams or customer bases, and new revenues and customers are the lifeblood of nearly all enterprises. Years ago, it might have been acceptable for the head of the IT department to be the only leader who truly grasped the significance of a transformative emerging technology, digital or otherwise. Today, such an approach is not only antiquated, but unacceptable. Risk is an enterprise-level concern; evaluating that risk is every leader’s concern, from the boardroom to every corner of the C-suite.
To evaluate that risk, however, the digital fluency of all enterprise leaders needs to increase, even among enterprises that have already successfully begun—or completed—digital transformations. The reason for this is simple: things change, and they always will. New technologies will arise, old ones will fade away. Advances in technology will bring with them risks and expansion of the threat landscape. It is not enough to create tech-savvy leaders now; a pipeline of such leaders must be cultivated within an enterprise to ensure that the digital fluency of leadership does not wane.
So, who will lead tomorrow’s digital transformations? When we speak of digital fluency, and C-suite and boardroom leaders who are tech-savvy, a specific cohort comes to mind: digital natives. The Millennials and Gen Zers of today will be in the C-suites and boardrooms of tomorrow, and the level of digital fluency and tech-savviness of those leaders will be far more widespread than in the current global digital economy. The problem is, today’s enterprises can’t wait that long. They need to innovate now, to ensure Millennials’ roles as future enterprise leaders.
To do so, risk from new and emerging technologies must be mitigated to levels an enterprise finds acceptable, and this requires resources. Specifically, adequate resources, focused in key areas. Innovation, customer interactions and overall business performance all benefit from robust, effective governance programs for technology and information. Likewise, a hardened information and cyber security workforce—well-trained, and up-to-date on the latest developments in their respective fields—is an asset of vital importance as enterprises seek to maximize their returns on investments in digital and other technologies. For enterprises producing products, services, or solutions, implementing strong innovation governance, and ‘baking in’ security during the design and development stages of a new offering, should be considered mandatory.
However, even with these safeguards in place—strong governance of information and technology, coupled with an exceptional workforce of professionals—things may not always go as planned. It is possible to mitigate risk when embarking upon a digital transformation, but it is not possible to eradicate risk. Tech-savvy leaders will realize this, and empower their operational units to take calculated risks, knowing that failure isn’t truly failure if something is learned from it.
If an enterprise seeks a prosperous near-term future, it lies in digital transformation. Enterprises with tech-savvy leadership already know this, and are making such transformations cornerstones for their respective envisioned futures. The most forward-focused of those enterprises are already building the pipelines of future leaders to ensure that enterprise leadership maintains its digital fluency for years to come.
Editor’s note: This blog post by ISACA CEO Matt Loeb originally appeared in CSO.