Moving the boardroom out of the dark ages
Gavin Fallon, Managing Director - UK, Nordics & South Africa, Board International, explains why boardrooms are often the last aspect in business to embrace new technologies, in his latest exclusive with Business Chief.
Organisations around the world are increasingly using data to improve their business processes. From customer targeting to supply chain optimisation, the advent of big data fundamentally transformed the way many organisations operate. While the rewards are being reaped across various business functions, one place where data is yet to make any significant impact is in the boardroom. Modern businesses are highly complex, with most operating within volatile market conditions and at the mercy of a constantly shifting economic environment. Yet the boardroom remains an enclave of static spreadsheets, presentations and decision-making based on what has already happened, not what the future may hold – more important for making decisions in today’s ever-changing business environment. In order to remain competitive, organisations now need to make their boardrooms digital, keeping pace with the rest of the business.
Reading the business pages in the newspaper each day, it is clear that market turbulence is impacting businesses across sectors and around the world. From Brexit and general elections to the US trade war with China, organisations are being hit by global factors that are outside their control. While planning and forecasting have never been fool-proof, today, a single tweet from a world leader can send a currency into freefall and significantly impact a business’s results. As we have seen recently, this uneasy operating environment can have devastating consequences for businesses – from Thomas Cook to Pizza Express, a failure to accurately plan for the future amidst uncertainty can lead serious financial difficulties and, at worst, collapse. Although a business cannot stop or avoid market turbulence, they can more accurately prepare for it by modelling their business in a more structured way.
Traditionally, the planning process at most organisations is disjointed and conducted in silos, leading to different outputs in each area of the business. While data has transformed huge swathes of business processes, the place where it, arguably, matters most – the boardroom – remains stuck in the dark ages. A recent report from FSN highlighted that only 60 percent of organisations believe their data is always accurate and trustworthy, and only 44 percent said the spreadsheets they use in the reporting process are well controlled and free from errors. Given spreadsheets remain a central feature in the boardroom, it should be a huge concern that at least 56 percent are likely to be inaccurate.
What’s more, too many organisations remain focussed on reporting. Even if we take for granted that the data is correct, reporting can only tell you what has happened, not what may happen in the future. While understanding past drivers is important, the key to future performance indicators lies in making calculated decisions for that future. If the right processes are in place, reporting should be so clear that the answer to ‘what happened’ is obvious. Instead, conversations should focus on what next actions need to be taken to meet an organisation’s strategy and vision.
This is why every business should move to establish a digital boardroom, where senior executives are provided the ability to take into account everything from strategic KPIs to operations, and interactively test scenarios and outcomes for decisions about the future in real-time.
Take, for example, a board meeting where business strategy is being discussed and which direction the company should take. With multiple routes available, how should a decision be made? A digital boardroom will provide the answer. Such a decision-making platform allows anyone in the room to perform complex scenario modelling and build strategic plans as they go and discuss potential outcomes with data to underpin the debate. A company considering the development of a new product, for example, needs to answer a number of questions before moving forward – do they have enough resources to deliver the project? Will the new project require investment in people? Would it be more economical to hire additional staff, upskill existing employees or outsource certain aspects completely? Is it likely to sell in the current environment or if there are shifts in the economy in future?
What would ordinarily be an incredibly manual and laborious process to calculate in Excel, can instead be answered with a few clicks of a mouse. Using forward-planning scenarios and predictive analytics can help determine the impact of a project providing a far more robust outlook and enabling more considered decision-making. Crucially, this takes place in real-time, not over the course of weeks when spreadsheets have been recalculated. The board can input different scenarios and base decisions on robust data analysis.
This is not a quick fix and a transitioning to a digital boardroom requires buy-in and a cultural shift – a desire for the organisation to be truly data-driven. However, with the technology available today, it makes little sense that decision-makers can’t react at a speed the business needs. Implementing a digital, data-driven boardroom is central to any digital transformation journey and, in the coming years, will be the difference between success and failure.
About Gavin Fallon, Managing Director - UK, Nordics & South Africa
Gavin Fallon is the Managing Director for the UK, Ireland, Nordics and South Africa at Board International. Gavin is responsible for driving the business strategy in these regions, working with teams across the organisation to ensure success. With more than 20 years’ experience, Gavin has spent the last 18 years at Board International working in roles including Head of Services & Consulting and Product Director. With his passion and experience, Gavin is widely considered an expert in the application of Enterprise Performance Management (EPM) across Sales and Operations.
For more information on business topics in the Middle East and Africa, please take a look at the latest edition of Business Chief MEA.
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