The Fourth Industrial Revolution, ‘Industry 4.0’ is characterised by the interconnected relationship between technology, data and people – the more data businesses can collect, interpret and leverage, the better they can drive effective decision making. And this is the key that executives and directors must acknowledge – data is now the lifeblood of your organisations.
As a director in Industry 4.0, and with growing pressures and ever shifting focus on director and board responsibilities, data has become a linchpin to success. The consumption of information previously limited only to board papers is long gone and moving toward real-time insight.
The measures of success as a director in this age of data have shifted, providing new sets of tools to achieve this success. Examples include:
- Solvency – Direct insight via financial dashboards tailored to the board
- Regulation – Real time breach reporting in any area of your organisation
- Innovation – Rapid insight into customer metrics measuring the effectiveness of strategies and operations
- Benchmarking – Establishing repeatable and comparable benchmarks and creating a platform to support decision making
These success measures can be found in almost every area of your organisation from tangible to intangible. For example, at board level, data can inform as to whether to approve management’s proposal to invest in a new service or project.
Along with the benefits of the data revolution also come some hazards for boards – directors need to ensure that their roles are distinct from operations and add strategic value. With the accessibility of data rising, there is a temptation to ‘flood’ directors with operational data. Balancing the demands of insight and the board not becoming part of the organisation’s day-to-day operations, remains one of the single biggest challenges directors will face in Industry 4.0.
Following are three key insights into areas where directors can leverage value, while maintaining the balance:
What can you do to build and strengthen your data capability?
1. Have a plan for what you aim to achieve
Take the time to work with leadership to identify the required data and information from the organisation to capture and make available to the board. By identifying specific objectives for what your business must achieve and report on is crucial to effectively building your data capability. Identifying specific problems you’d like to solve, use cases and areas of your organisation that provide the largest value to focus effort and investment will ensure a strategic but narrower approach.
Some questions directors can ask include:
- What data do I currently have available in my business?
- As a director/board member, how can I/we improve our effectiveness by leveraging data?
- What is the right data the organisation must collect and use to inform us as a board?
- Are there areas where I could collect more data? Do I need external support and/or additional technologies to achieve this?
2. Ensure the organisation has a data management framework
In order to report and work with a board, every organisation must have a data management framework. Understanding data in the organisation and its availability, reliability and accuracy, will see effectiveness elevated.
A data management framework is pervasive in managing contemporary issues faced by an organisation - from tracing obligations from regulators, (and the recent money laundering compliance issues experienced by Westpac highlight this), all the way through to leveraging insights from customer interactions such as Net Promoter Score (NPS). Data is paramount.
3. Invest in getting the right capabilities
Your organisation and its leadership must ‘trust the data’. Making practical and prudent data-driven decisions will support your organisational objectives and unlock value. Key decision makers must be data literate; so they can understand how to interpret trends or changes and make strategic decisions with confidence based on the data.
The understanding of and using data is critical for participating in contemporary business and this Fourth Industrial Revolution. Providing directors with high quality data and information leads to making more effective decisions. Whether it is selecting products and services, capital investments, quality control or training and recruitment, investing in your data capability is investing in the future of your organisation.
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