Today, many organizations are embarking on technology and business transformation initiatives that are considered critical to their growth or even their survival. Organizations from every industry want to take advantage of data science, artificial intelligence and machine learning. However, these innovations bring new concepts for doing business, requiring new roles and skills to provide process, data and tool governance.
In my experience, the majority of business transformation and IT-related project failures in an organization can be traced back to poor governance.
In an ISACA report titled Better Tech Governance is Better for Business, 69% of technology executives admit that the connection between business goals and IT goals is not clear. Organizations should consider a strategic tool and business process governance structure — where technology projects and business process ownership are clearly connected to the strategic business objectives.
Making The Case For Governance Today
Governance is at the heart of achieving operational excellence in the way that an organization executes business processes, manages change and implements continuous improvement initiatives. Philosophically, companies that have embraced governance have built competency centers with designated ownership of a new piece of technology or process. These business process owners are the subject matter experts (SMEs) responsible for the health and key performance indicators (KPIs) associated with the business process and the implementation and maintenance of associated tools.
At a minimum, every organization should have a clear definition of the key enterprise business processes and their proper business owners.
Many years ago, I witnessed a lack of business process and tool governance, which led to the proliferation of multiple expensive, disparate IT tools that were difficult to integrate. This created difficulties in the timely sharing of the same master data across the multiple functions that needed it. Additionally, the cost associated with maintaining multiple systems meant the company was paying much more than it needed to and, consequently, became uncompetitive. Eventually, the group embarked on a global transformation strategy that led to establishing the proper governance.
SMEs Make Companies More Successful
The idea behind the proper governance structure is that SMEs become accountable for the health of a business process. In its simplest form, SMEs understand how their job works, they are accountable to achieve the KPIs and they will consequently figure out how to make business processes run as efficiently as possible.
Governance clarifies and creates transparency in terms of this responsibility. Here are four tips for getting started:
1. Plot out the processes. When capturing the entire business systems and processes landscape, redundant business tools, high cost of maintenance, inefficient processes to manage master data, lack of accountability and the like will emerge.
2. Present it. Show and quantify the pain points and cost from a lack of governance and how it impedes business leaders from achieving their goals.
3. Gain buy-in. IT leaders need to partner with business leaders and gain their trust, show that they understand the company’s priorities and make the case for how governance can support their vision.
4. Start small. Focus on a few key enterprise processes and make sure that performance is being measured. Improvements and gains from streamlining through governance will emerge in this pilot process and make it easy to implement governance company-wide.
Defining this ownership empowers SMEs to improve a process and make sure that it is achieving its goals. And if the SME is accountable as to how a process is performing, they will inherently look to make tangible improvements. Without proper ownership, the IT department will become the default owner; that is when continuous improvement will slow or stop, which is a major problem.
The IT team will have a technical bias, but they will never be a true SME in every process. The fact of the matter is, IT teams already have many priorities to keep all departments functioning at their highest levels.
When embarking on a new business transformation initiative for specific functions, the business process owners exist within the team that executes the processes every day. An IT person cannot compare with someone who understands exactly what the program is meant to do.
Transparency In The Pharmaceutical Industry — A Case Study
Unlike other tools in the pharmaceutical industry, transparency does not yet have a place in many organizations. Publishing clinical trial results and registering studies is still thought of as a newer function and is many times cast aside as an afterthought or secondary responsibility within another core function.
This is becoming a larger issue, as there are no clear lines of ownership for transparency initiatives in many pharmaceutical companies, clinical research institutions and universities.
For organizations without at least one transparency specialist (yes, this is still possible in today’s environment), the burden is often left to a medical writer who has drafted the protocols, clinical study reports and/or summaries.
When you consider that the average time it takes to develop a drug is 10 years and the cost is around $2.6 billion, according to the Pharmaceutical Research and Manufacturers of America (PhRMA), the case for strong governance should be very clear. The business processes in the pharmaceutical industry are highly specialized and must comply with a laundry list of global regulations. IT will not fully understand the what, why or how of properly sharing clinical trial information with the public. However, an SME steeped in the industry and knowledge of the clinical trial will.
The aforementioned ISACA report proved that 89% of technology executives believe that better technology governance improves business agility, and 92% believe that it produces better economic outcomes. Without a governance structure in place, ownership of internal projects can become ambiguous very quickly as a project leans toward failure and a lack of accountability becomes evident.
Governance, in my opinion, helps strengthen the culture of a company, allowing an SME to work with an entrepreneurial mindset to manage a system or process. With clear lines of responsibility, engagement and creativity can increase among departments, and I have personally witnessed immediate positive impacts on company growth and health.