Help your company overcome operational, organizational and financial risk.
Boards can help lead change at their companies by leveraging automation and technology and understanding the operational, organizational and financial risks of not doing so.
Think back to your last board meeting: What kinds of topics filled the agenda? Your board most likely discussed a financial performance recap, an operations update and the results of development efforts – all of which are historical in nature. While a review of significant events is important, board performance suffers when too much time is spent looking in the rearview mirror. To drive change and growth strategy, a board should spend a greater share of its time looking ahead and planning for the organization’s future. Today’s technological, economic and demographic trends mandate that boards stay abreast of what is on the horizon. As such, a piece of every board meeting should be devoted to forward-looking topics, such as strategy, market/competitive landscape and risk management.
Why leverage automation and technology?
While boards do not typically get involved in day-to-day processes, directors should have a full understanding of an organization’s operations, including its overall use of technology and automation and how its approach to technological advances fits into its overall strategy.
Digital resources can create opportunities for agility and responsiveness and provide the ability to scale as needed for future growth and complexity. Automation can also improve efficiency, streamline workflow and produce cost savings. And it’s not just larger companies reaping these benefits – rapid advances in technology have brought new opportunities for on-demand reporting and systems integration into reach for small and mid-sized companies.
The risks of not automating
The benefits of embracing technology and automation (from both an operational and strategic perspective) are clear, but so are the risks of not doing so, which fall into three buckets: operational, organizational and financial.
Operational risk. Failing to keep up with technological advances can create competitive disadvantages. Operational inefficiencies and outdated systems hamper the quality and responsiveness of customer service and increase the risks of system interruptions or outages.
Technology is changing customer expectations as well. According to research from commerce technology company Radial, 73% of customers want the ability to solve product or service issues on their own, and 83% use self-service options when available (“The State of IVR Systems in 2018,” GetVOIP.com, May 2018). Board members should consider their company’s service delivery model and explore opportunities to deploy robotic process automation (RPA) to enhance customer experience and satisfaction. RPA technology can also help reduce administrative tasks and back-office.
Organizational risk. Companies continue to face staffing shortages and fierce competition for talent. Technology can help employers address these challenges in numerous ways. Automated processes and systems integration reduce manual tasks and make it easier to cross-train employees. A technology-based approach decentralizes critical knowledge and expertise, which positively affects turnover and enhances stability and control over key functions like accounting and finance.
Beyond staffing, technology also helps companies resist stagnation. The biggest enemy of growth and change is the “we’ve always done it this way” mindset. A forward-looking board should empower leaders to evaluate processes and identify those that could be optimized through automation. This is a valuable opportunity to revisit standard procedures, test long-held assumptions and improve outcomes for your employees, customers and the bottom line.
Financial risk. Effectively leading an organization’s strategic planning involves the ongoing evaluation of an organization’s competitive position. However, because of outdated technology, many companies are unable to generate the real-time financial data necessary to assess financial performance on a timely basis, let alone plan for long-term sustainability. Reliance on legacy systems and manual processes prohibits the robust financial reporting so critical to strategic boards.
Automation relies on strong controls
Technological advances and the automation opportunities they create are not without their risks. The more a company automates, the more important proper controls become. Such controls keep systems and processes working as needed and ensure the security of company and customer information. It’s impossible to eliminate all risk, but there are strategic investments a board can make to mitigate cyber incidents.
Gretchen G. Naso leads the financial management solutions practice at Pennsylvania-based advisory firm RKL LLP.
This article is the first in a two-part series. Read more on effective cybersecurity hygiene.