Rethinking IT Governance: The New Role of IT Beyond Budgets – Digital Navigation Agility for Success in Modern Business and Manufacturing
Michael Carroll
Global Executive in Industrial Innovation & AI Research | Industrial Transformation Leader | Board Advisor | Keynote Speaker & Columnist | Chairman, CEO, COO, CFO, CIO | Co-Founder & Startup Advisor| Hi-Performing Teams
Introduction:
In a world where digital transformation is paramount, one might wonder how traditional IT governance structures fare, especially when aligned with finance departments. Does this traditional approach bolster or hinder the capabilities of businesses and manufacturing companies in an era of rapid technological change?
The Situation:
IT governance under the finance umbrella is a prevalent structure in many organizations. This model was historically adopted for several compelling reasons. Primarily, it provided a robust framework for cost control, a crucial aspect in sectors characterized by thin margins or heavy regulation, such as finance and healthcare. The alignment of IT with finance also enabled stringent risk management, an approach particularly resonant in environments where IT was more commonly seen as an operational requirement rather than a strategic asset. However, as the business world shifts towards a future where digital agility is paramount, it begs the question: Does this traditional structure potentially hinder the rapid decision-making and innovation that modern times demand? The situation is markedly different in sectors like technology, retail, and advanced manufacturing. In these fields, IT governance is integrally linked to strategic decision-making and innovation, highlighting the potential constraints of a finance-centric IT governance model in today's digitally driven environment.
The Complication:
Observing companies like Amazon, Google, and Tesla, which place a high priority on innovation within their IT governance, leads us to question the effectiveness of finance-led models. In industries where technological agility is crucial, might these traditional structures result in companies falling behind? This juxtaposition suggests that finance-oriented IT governance could potentially hinder the innovation and rapid advancement that is critical in manufacturing sectors seeking to leverage technologies like IoT and AI. Can we envision an IT organization under the existing paradigm that primarily focuses on enabling continuous operations while maintaining a competitive edge?
The Question:
In today's fast-paced business environment, particularly in the realm of manufacturing, one must ask if the traditional model of IT governance, which emphasizes financial control, still holds relevance. As the rapidity of decision-making and prowess in digital technology become increasingly vital for survival and competitiveness, is it feasible for a finance-led approach to IT governance to meet these evolving demands?
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The Answer:
We’re faced with considering a more holistic approach to IT governance, balancing financial prudence with the need for digital agility:
Conclusion:
In today’s rapidly evolving business world, particularly in manufacturing, the relevance of traditional IT governance, which often falls under the purview of finance, is up for debate. As we progress deeper into an era defined by digital agility and innovation, one wonders if a finance-led approach might restrict a company’s ability to adapt and compete. Innovative companies like Netflix, Amazon, Tesla, Siemens offer a glimpse into a more balanced and integrated IT governance approach, potentially leading to greater digital success. As manufacturing and other businesses confront digital transformation, could rethinking IT governance be the difference maker in a strategic choice? For organizations seeking to excel in the digital era, could embracing a shift in IT governance from a traditional model to one that is more integrated and technologically driven be the key to transitioning from “also ran” survival to “It’s a long way between first and second place” industry leadership?
Shelley Nandkeolyar Ron Norris Subrata Sen Harirajan Padmanabhan Arthur Kordon Rajib Saha John B. Vicente Jr. PhD Sarath Chandershaker parabole.ai
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Manufacturing Leadership | Built in Quality | Smart Factories
5 个月Regardless of where IT governance resides, isn't it courageous leadership that balances KPIs driving innovation with typical operational KPIs? (ie uptime, incident resolution, on-time delivery, and employee satisfaction) It's about setting up a culture that is value-creation obsessed while managing costs, not the other way around.
Diretor de Opera??es Industriais na Veracel Celulose S.A. / Vice-Presidente do Comex_FIEB / Conselheiro Diretor da ABTCP / Conselheiro credenciado pelo IBGC e Open Mind Academy / Vice-presidente do Sindpacel_BA / Mentor
5 个月Congrats my dear Mike and go forward improving our innovation skills ! Regards from Brazil !!
CIO | CTO | Innovation | Digital Transformation | Application Delivery | Data and Analytics | High Performing Team Leadership
5 个月Spot on Mike, though I would argue that this is as much about leadership as it is about organizational/ operational alignment.?Having worked in consulting through the “Reengineering Revolution” of the mid-90s, the prevalent concept was to organize IT under Finance for risk management, cost containment, and governance (as you indicate).?Certainly, with the critical role technology plays in enabling a digital enterprise today, the mindset needs to change in many organizations on how to think about investment strategies and innovation, regardless of the how the function itself is aligned, because broader leadership partnership and support is required for these efforts regardless of where they “live”.?Case in point, an innovative manufacturer needs to be as concerned with the effective enablement of the digital worker as the asset health of the equipment they are operating, whether that’s through more intuitive tools, improved orchestration of digital workers and equipment, or integrated insights and recommended actions leveraging AI tools that reduce the impact of ongoing attrition and knowledge gaps.?That's an evolution in vision on the role technology plays in a digital facility that is broader than IT governance itself.
Disruptive Technology | Advisor | Industry 4.0 | Cyber Security
5 个月Aligning IT under finance brings cost transparency and cost management, but does little to analyze or understand the business value creation of technology investments.
Exciting exploration of the evolving role of IT governance in modern businesses! ??? #innovation #technology #digitaltransformation Michael Carroll