Part 2: Governance Modeling: A Central Component for Digital Transformation
One of our clients posed a very interesting question about six months ago. Paraphrasing, he stated, “…anybody can build a bot, but nobody is providing a solution to govern them.” Over the course of the past six months, we have found many companies struggling with this question; however, the following reoccurring themes stand out:
- The Wild West Scenario – Where multiple business units comprise the mantle of digital transformation and strike off on their own. Case in point, a European telecom powerhouse has over 1500 active bots based on multiple technologies, inconsistent design approaches and dubious consistency.
- The Chokehold Scenario – Where some part of the organization effectively puts the clamps on digital transformation efforts – often due to a lack of understanding or adherence to stringent rules that may not apply. In this case, a major U.S. bank has a fully staffed and operational robotics team who hasn’t been allowed to create a single robot because the risk and compliance groups have shut down every opportunity.
- The Broken Bot Scenario – Where bots are implemented, celebrated and then ignored. A major television channel developed bots to handle invoice processing, then let them run unsupervised for close to a year, until they discovered almost 5000 unsubmitted invoices.
Each of these horror stories can be tracked down to several false assumptions, errors in judgement, or flat out screw ups; however, these scenarios do have a unique, common thread. Implementing an effective governance model from the beginning would have gone a long way to avoiding these mistakes. In this piece, we will discuss the need for developing a governance model for managing digital best practices in addition to highlighting several, short-term guiding principles for cultural adoption.
Guiding Principles for Governance Modeling
The term “governance” usually conjures visions of overly complex ITIL frameworks, IT driven meetings and all sorts of project rigor. For digital transformations, we believe this is 40% of the challenge.
Guiding Principle #1 — Balance Advocacy and Control
Digital advocates in organizations today should strike an interesting, and semi-unique balance. The initial goal is advocacy – getting the interest, buy-in and investment from business units. Their willingness to adopt digital, apply it to key business opportunities, and manage the impacts of transformation is the first step towards success.
This advocacy must be balanced by control. Early in the process, control comes through identifying a limited group of vendors, providing common templates and tools, ensuring a robust technology infrastructure and providing some oversight into the development process.
Guiding Principle #2 — Inclusion
It may be obvious after the points above, but digital transformation cannot be an IT-only initiative. While this works occasionally for traditional systems and pre-defined functionality, digital is both too unique, and too flexible to be handed over to the business.
Who else needs to be involved in the development of a governance framework for digital transformation?
- Business Unit Leaders – The accountable party for setting the direction for digital strategy
- Human Resources – The accountable party for establishing job profiles for each bot where they are assigned a digital supervisor, and assigned a job description so they can fulfill their predefined functions
- Risk & Compliance – The responsible party for identifying third-party controls that need to be acknowledged to support the growth and expansion of digital strategy
- Lean Six Sigma Talent – The responsible party for evaluating the effectiveness of a process to ensure that it produces what is needed, at the right time, to the right person, while using minimal resources
- Business Relationship Managers (BRMs) – The responsible party who delivers business outcomes that support the business value of digital strategy
Guiding Principle #3 — Scalability
This may be the most obvious principle; however, it bears mentioning, you don’t need a 10-person governance team for the first bot. Ensure that BRMs are continuously measuring the outcomes each bot sprint, to determine if the outcomes are producing the value as identified within the business case.
We need to bear in mind that digital is more than just a new set of tools – it’s a powerful blend of people, process and technology. To ignore one over another is a mistake. To allow any of them to run unsupervised is a risk to the value you’re trying to achieve, let alone your organization and its strategic goals.
In Part Three, we will shift our focus to relationship management between consumers and providers, and how it supports the alignment of business value with business outcomes.