BOARD GOVERNANCE OF TECHNOLOGY

Our Background…

Technology is changing quickly
to the point that today we do not so
much have a digital economy but rather
our economy has been digitized.
The Problem
Disruption is the defining feature of the 21st
century.
This dramatic shift requires responses in
organizations from the top.
Strategic decisions about Technology
can no longer be left to the CIO
Australia is able to overtake
competitors like Singapore and Hong
Kong but needs to capitalize on its
diverse migrant population and
embrace economic "disruption".
--- Rupert Murdoch.

Some Statistics & Risks
CIO’s Survey Report
44 %
No lack support from the board to
56 %
Yes
achieve IT vision ?
Inception of Twitter
More than 165bn Tweets
since 2007
More than 1bn
Facebook users
Mobile surpassed
desktops internet
access device end of
2013
The world is changing … and “disruption is
the new reality!”
Risk
• In March 2014 ASIC’s chairman,
Greg Medcraft, characterized
cyber crime as “a systemic
risk” that may become the “next
black swan event”.
• the internet and rising use of big
data had dramatically amplified the
possibilities to do both good and evil
online

The Six Worst IT Projects for 2013
1. Healthcare.gov: By now everyone knows
about the US Government’s health insurance shopping
website’s problems upon the Oct. 1 go-live, when
many users couldn’t access the system and only about
30 percent were actually able to sign up for health
care.
2. Queensland Health payroll
system: The government of Queensland,
Australia, announced in August that its “bungle” of a
payroll system project reportedly could cost taxpayers
up to $1.2 billion
3. MyCalPAYS: In February, the state of
California terminated its contract with SAP in
connection with a massive payroll project called
MyCalPAYS. More than US$250 million has been
spent on the project, which dates to 2005.
4. Royal Bank of Scotland: Computer
system left account holders unable to make payments or get
cash. RBS has failed to properly invest in its IT systems for
decades RBS CEO Ross McEwan said
5. Sabre travel: the global travel industry was
thrown into chaos during the school holiday season
when their reservation system (used by over 300 airlines)
caused cancellations and delays for hundreds of
thousands of passengers when the system was offline for
< than 3 hours.
6. Walmart’s shoppers logging on to Walmart’s
website in October thought they’d bagged a bargain
when they managed to buy computer monitors and
projectors – valued at $500 – for as little as $8.99. The
retailer blamed IT glitches causing data discrepancies.

Poll of Audience
Lindsay’s suggested insert a kind of
mini-quiz, with two easy questions,
two middling ones, and two really
hard ones,
The aim should be to present a
matrix where most target boards will
get two or three right.

Boards & Technology Governance Today
DIREC
TORS
10 minute Panel Discussion
 John
Craven
 Chris
Gillies
 Elizabeth
Proust
 Chris
Gillies
 Jed Simms

Recommendations
We recommend a five steps
governance process for
our company that will engage
this board to ensure that our
businesses are protected from
potential catastrophic
technology risks whilst
ensuring maximum benefit is
derived from fast moving
advantages in technology.

The 5 Step Governance Process
Step 1: Disruption is the norm in the 21st century
therefore Boards must govern benefits realisation
from their investments in technology by ensuring
that their organisation and people have the capacity
to respond with agility and speed to take advantage
of whatever opportunities are presented by the
constant disruption
Step 2: Technology is significantly
impacting all organisations and
consequently the Board must govern
technology projects from start to finish
1
2
3
Step 3: Boards need to understand that technology can
enable organisations to be designed in ways that were
not possible just a few years ago and ensure that their
organisation is preparing to benefit from these changes
Step 5: To create an easy-to-use and
flexible framework to govern
technology and enable boards to
comprehend the state of technology in
their organisation
Step 4: To understand that people can now
communicate and collaborate to get their work
done through many channels using multiple
devices connected to social media which is
creating better ways of working, learning and
living
5
4

Step1
Disruption is the norm in the 21st century
Boards have to govern benefits realization from
their investments in technology by ensuring that
their organization and people have the capacity
respond with agility and speed to take
whatever opportunities are presented by the
constant disruption

Management of benefits
Realization at the very beginning
“Benefits Realisation is still the least popular
service with only 14% of PMO’s offering this to
the business.” PM-Partners, page 19
Benefits realisation is at the core of initiating
projects. Though governance and the
processes around are usually very immature.
Where
Organizations
need
to be
To ensure the organization has the level of capability
required to deliver the results and returns desired
Your level of ‘value delivery capability’ determines
the benefits and returns delivered

Questions to ask yourself
and what evidence to look for :
What benefit calculation models (NPV, etc.) do you
use? Have you tried something like “real options” to
include the impact of future changes?
How many projects have you stopped at each
phase?
Do you know which are your most important - not
necessarily largest - projects?
Are you regularly matching the technology portfolio
with the company SWOT?
Do you know exactly how your portfolio is delivering
each strategy and strategic imperative?

Board must govern technology projects from start to finish
The Board needs to have a good handle and understanding of the most critical projects.
The scoring becomes highly relevant.
Step 2
30% and more of the (IT) projects are failing. The percentage is even higher for larger
projects.
Project failures - lack of appropriate sponsorship, weak project management and change of
circumstances which is
not reflected in the project.
The layout of the project and therefore the flow is determined in the early phase of the
project (initiation or ideation). Adjustments further down the line are a lot harder and more
expensive.

What Evidence to Look for
How did your organization come up with the
project portfolio?
How do you know you are investing into
potential game changer projects?
How do you ensure that you really know what
the status of a project is?
How do you incorporate the statistical fact that
30% of projects are failing?

Boards need to understand that technology can make PROFITABLE changes
Industries are adjusting their
business model
Mature business models are being disrupted
If the organisation does not adapt and disrupt,
somebody else will
Step3

Example 1 Example 2: Shifting Value
Examples
Amazon is one of the largest
Cloud providers in the world
- winning
even against a company like
IBM!
Once had market
cap >$7B
Now less
than $1B
$ 2.4 B $ 1.5 B $ 4.22 B
Car Sales RealEstate.c
om
Seek

What evidence to look for
Have you noticed new competitors in
the marketplace - even small ones?
Do you hear “street talk” about new
ways of doing business?
Are there people in your industry
vehemently arguing that a certain
new approach cannot be successful?

Social Media is Massive in Australia
1. Facebook - 13,000,000
Active Australian
Users
To understand that people can now
communicate and collaborate to get
their work done through many
channels using multiple devices
connected to social media which is
creating better ways of working,
learning and living
BYOD:
67% of people use personal
devices at work, regardless of the
office’s official BYOD policy
(Source: Microsoft via CBS News)
Power of FACEBOOK &
TWITTER
Social media statistics for Australia –
socialmedianews.com.au
2. YouTube – 12,400,000 UAVs
3. Wordpress.com – 6,500,000
4. Tumblr- 4,900,000
5. Linkdln – 3,300,000
6. Blogspot- 3,000,000
7. Twiter- 2,500,000 Active
Australian Users
8. Instagram- 1600,000 Active
Australian Users
9. Snapchat- 1,070,000 Active
Australian Users
10. TripAdvisor-1,200,000
11. Flicker- 810,000
12. Pinterest- 440,000
13. Yelp- 200,000

Training Needs to Start from the Top
Shortage of IT-literate talent in the
business is creating a bottleneck.
capability building must start at the top.
Some companies have put their top 200
managers through IT boot camp as a way
to start the process.”
(McKinsey & Company)
Technology is an Important
But won’t tuErnn aa nbonle-Drirector into a
Director
Executi
ve
IT
Manage
r
FUTU
RE
EXE
C.

How many FB likes, Twitter followers and Pinterest
likes your company has?
How often are you active on Twitter to connect with
your customers (and other partners) ?
How do you use new technologies to connect with
the shop floor of your organization ?
Do you have a program in place to help your senior
executives and managers to get up to speed with
regards to IT ?
Who of your non-IT employees is an IT star ?

To create an easy-to-use and flexible
framework to govern technology and
enable boards to comprehend the state of
technology in their organization
there is no reasonably comprehensive framework to allow boards to really
understand the status of technology in their organization.
Will offer a creative commons license to be held by AICD as our simple
framework that is enhanced by this program and will no doubt become a
valuable industry asset.
Step 5
Based on available frameworks
and expert inputs We suggest the following
simplified framework
Decision and Accountabilities What, When and Who makes
decisions?
Direction and Guidance What needs to be done? Which
investment?
Measurement and Verification How to measure and which tools to
use?
Evaluation What are evidence and how to adjust?

Which framework or checklist do you use to understand
the state of technology in your organization?
Do you have a good understanding what downtimes,
DR (disaster recovery) plans and other components
mean to your organization and to your customers?
Would you see value in a technology governance
framework with the use of equivalent terms to cash-flow,
balance sheet, etc.?
What impact would such a framework make in your
organization?

Lets Recap: The 5 Steps
GOVERN BENEFITS TECHNOLOGY
GOVERN TECHNOLOGY SOCIAL
BENEFITS
MEDIA
EASY-TO-USE
FRAMEWORK

Panel Discussion

We think we have designed “Technology4Directors A highly innovative approach to tackle the
challenge of “Technology Governance” that
creates the best possible network of
interested people to sustain the best possible
approach to tackling this critical issue.
The best globally available information and ideas
Presented by experienced company directors using
board language
available in a mobile environment
use of cutting-edge technology to support the
learning
opportunity to access a network of like-minded peers
to share learnings and experience

Core of the Program:
11 Board Webinars (BW)
BW 1- Capital Allocation and Good Judgement (how to take technology into
account)
BW 2 - Organisational design (the new design paradigms using
technology)
BW 3 - A-Z of Technology Governance (technology governance in the new
world)
BW 4 - A-Z of Technology Operations from a board perspective (the day-day
aspect of technology)
BW 5 - Technology as a utility
(Why does a Director need to understand the cloud?)
BW 6 - Your customers, employees and partners are going mobile - are
you?
(Role of mobility and location based marketing)
BW 7 - The value of patterns
(Why understanding smart analytics and big data is relevant for
Directors)
BW 8 - Massive collaboration
(BYOD and Social Media)
BW 9 - How to innovate the innovation?
(Innovation paradigm has changed through technology)
BW 10 - Building Trusted Networks with Modern Tools
(Collaboration across the industry with relevant and trusted
peer groups)
BW 11 - Board Evaluation
(How has the progress been and how do we continue the
progress in an ever changing environment)

Additional Elements
Membership
Access:
Membership
access to the site
(standard level)
with access to the
program including
all future updates.
Email
Support:
Email Access to
us with any
(technical)
questions you
might have
about the
program.
Individual Session
for your
organisation:
You and up to four
colleagues get an
individual GoToMeeting
session with Russell
and Michael to discuss
your specific situation
at a convenient time.
MEMBE
RSHIP
TECH
TIPS
Membership
Premium Access:
3 months access to the
premium membership
where we create a
special environment
with access to peers
and more content.
Workshop:
One day
workshop where
we present and
discuss the latest
technology topics.
Workshop will
around mid 2014.

The Complete Package
11 Board Webinars covering all
aspects
Email support
Lifetime access to standard
membership to all material at your
convenience
An individual session for your
organisation (GoToMeeting)
A workshop “Technology4Directors”
3 months premium membership
access
(peer network, additional content) Go to:
www.technology4directors.com.au/program
$
2,497

BOARD GOVERNANCE OF TECHNOLOGY

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