In light of digital transformation, boards of directors (BoD) often recognize the need for more engagement in digital strategy and oversight. At the same time, many of them are seeking advice on how to realize this type of involvement. Our goal is to enable board members to learn from their peers and translate best practices of other organizations to their own context. To inspire them, we discuss the board IT governance mechanisms that were established at the University of Antwerp (Belgium).
The University of Antwerp: The ContextLike many organizations, the University of Antwerp has become increasingly dependent on IT. No central business forum existed to decide which projects would be executed and which not, swamping the IT department with many requests they could not deliver against. This situation often led to frustration on the business side, a tension that was also reported to and known by some board members. Furthermore, in 2016, a new rector came at the head of the University of Antwerp. The newly appointed rector strongly believes it is the task of the BoD to create a long-term vision, also regarding IT-related issues.
Blockchain is a distributed transactional database in which transactions and related details are recorded and verified through consensus algorithms. Once a transaction is recorded, it cannot be changed or canceled. Thus, blockchain offers features—transparency, security, immutability, accuracy and traceability—that are key features in auditing. Its use will have several kinds of impacts on the auditing profession.
The audit profession will be more IT-oriented, and its main objective might no longer be to ensure the regularity and sincerity of an organization’s financial statements, but instead to review the information systems and, in particular, to ensure that blockchain technology is properly deployed. Auditors might even have to certify the blockchain itself.
Digital innovation and transformation is difficult when there is little in the way of clear and decisive senior leadership direction for it. However, not only may senior leadership lack the qualifications and experience necessary to guide enterprise digital transformation, they may also lack the frameworks required to oversee those innovations. So it is no surprise that digital transformation is difficult; there can be no suitable support given poor strategic direction.
What Is Digital Transformation?
Merely deploying digital technology does not mean that an organization is digital, e.g. digitizing paper forms is just that—the digitization of paper forms. It does not suddenly make the organization digital. A digital organization would mean that every stakeholder interacting with those forms does so digitally, simultaneously increasingly satisfying various stakeholder expectations. Without the latter, why would anyone actually bother? Indeed, this is what makes up the digital business case.
At this period of time where IT driving “business transformation” is the order of the day, ensuring IT security is not in conflict with business is a very critical concern. Instead, IT should enable the business in realizing value without compromising the expected level of security. This is of paramount importance. Any compromise in IT security citing operational efficiency could result in legal implications to the business, including damage to the enterprise’s reputation, revenues and profits, and even imprisonment.
One area to look at very closely is special access (also called privileged access) that few identified IT operations stakeholders have in making sure required IT systems are operated seamlessly, enabling business to realize its intended value. It is critical for management to have confidence in whomever has special access carries out the activities in line with the expected intent in a transparent manner.
British science fiction writer Arthur C. Clark famously said, "Any sufficiently advanced technology is indistinguishable from magic.” This seems to apply today like never before, especially with the rise of the Internet of Things (IoT). The day is not far off when your appliances are talking to your automobile, and your car is picking up your groceries after it has dropped off your kids at school and you at the office. While this may sound like science fiction (probably something Clark might have written) or something you see on the sliver screen, the underlying technology referred to as the Internet of Things has been around for a while and is already being used by a variety of players across industry sectors with scores of startups and established players betting big on this technology. Research predicts that there will be 31 billion connected devices by 2020 with spending on IoT expected to be close to US $3 trillion dollars. Economic impacts are expected to be in the trillions with benefits, opportunities, threats and disruption galore.