Companies from all different industries are using mobility, analytics, smart embedded devices and social media to transform their business. This has resulted in a change in the entire internal processes of a company’s well as its business model. Organisations have redesigned customer interaction and engagement by taking advantage of the new technological capabilities. The rapid improvement in technological capabilities of firms and individuals has created massive opportunity and challenge in the digital space. In order to effectively manage the increased presence of the firm on websites, social media, mobile sites and other internet or web based products it is imperative for businesses to indulge in corporate digital governance.
Corporate digital governance is a framework for establishing accountability, clarity of roles and decision making authority for firm’s digital presence. Such a framework should conform to the organisational goals, regulations, standards and corporate policies. As digital decisions become increasingly integral for success of any business, the gap between digital governance & business governance will blur.
Importance of Digital Governance
Businesses have increasingly emphasis on digital governance in recent times due to the following reasons :-
- Regulatory requirements – Governments around the world are trying to stay in touch with the rapid digital changes. This has lead to the creation of new laws on privacy, taxation, data handling and more. The penalties imposed for noncompliance with the above provisions are extremely harsh.
- Cyber security – Cyber security is a major concern for all businesses today. Businesses should have contingency plans in place in the event of a cyber attack. Regulators in the US are forcing firms to admit breaches in their security publicly.
- Perceived digital weakness – Customers have become increasingly aware that when they do business with others, they must share data. Companies which project themselves as callous or untrustworthy data handlers will face a major dent in their brand reputation.
- Brand exposure in social media – With the advent of social media a firm’s control over its global brand has reduced. A negative customer post on Facebook, Instagram, Twitter, or YouTube can receive global attention immediately. As firms implement new ways to work with customers through mobile and social channels, online reputation is at stake.
- Employee Collaboration – As businesses go global there has been an increased emphasis on collaborating between different departments across geographical boundaries. Digital governance plays a critical role in ensuring such collaboration can be carried out smoothly and efficiently.
Application of Digital Governance
In order to keep up with the changing digital environment and take advantage of the technological changes firms must focus on their digital governance. Consequently, to achieve a highly robust digital governance system there are a few steps a business can take such as :-
- Appropriate Operating Model – The primary challenge that confronts a company is organizing the business for digital. This can be achieved by designing an operating model that is suitable for purpose, defines ownership and governance for digital. For some firms, a centralized digital team and governance model may be ideal whereas for some firms, a more customized and decentralized approach may be better.
- Change of rules, processes and behavior – Rules and regulations are a critical part of any governance system and digital governance is no different. However, it is imperative that authorities regularly update these rules and regulations to keep pace with the changing digital trends.
- IT infrastructure – Companies need to be prepared to spend additional revenue on IT, to ensure efficient digital governance. Digital leaders should encourage and support the improvement and development of the technological capabilities of an organisation rather than stifle it in order to meet budgets.
Operating in a digital world has presented businesses with unprecedented opportunities however new risks such as those of cyber security, compliance failure and organisational silos have emerged. An effective and efficient digital governance model requires investment, but the benefits extend far beyond managing compliance. Companies with a strong digital governance model will reap cost and efficiency gains, as well as reputational and competitive advantage.Add to favorites