Establishing a governance framework that embraces disruptive technologies and encourages innovation while ensuring risks are identified and managed is essential to an organization’s ability to survive and thrive in a digital world.
According to the 2017 KPMG/Forbes Emerging Tech Risk survey (Disruption is the new norm), there is evidence that organizations are making significant investments and adopting emerging technologies but are not including them in IT risk assessments.
Today’s businesses are innovating across business models, products, services and customer engagement while disrupting markets and entire industries. Much of this innovation is driven by applying emerging technologies throughout the value chain. It creates great opportunities but at the same time presents significant challenges and unknown risks and consequences to organizations.
Competitors can completely disrupt an industry, or an organization can disrupt itself first and lead a new phase of growth. This pursuit of everything digital is happening at an accelerating pace. Speed has become a huge source of value whether measured by faster decision-making or how quickly an organization can go from ideation to revenue. This need to deploy digital capabilities quickly and at scale is the antithesis of IT-led projects that are typically months or years long and, as a result, often out of frustration, the business is increasingly sidestepping the IT function to procure new technologies. The combination of an increasingly tech-savvy population combined with the proliferation of cloud-based software as a service (SaaS) solutions has greatly simplified this process. In this race to harness emerging technologies and innovate it is easy to forget about governance and that can lead to significant costs and risks.
Establishing a governance framework that embraces disruptive technologies and encourages innovation while ensuring risks are identified and managed is essential to an organization’s ability to survive and thrive in a digital world. Innovation / Emerging Technology Councils comprised of the right mix of internal and third party experts can ensure that the right approach is taken, investment is available and prioritized, and opportunities can be scaled.
The unique characteristics of emerging technologies - their diverse applications, the myriad concerns raised by some new capabilities, the need for public engagement, and the challenge of effective coordination between governance players - create the need for a new governance approach and a new lens through which to view risk management.
Emerging tech creates opportunities … Emerging technologies have been used by entrepreneurial startups as well as long-established corporations to innovate and generate value in many ways. In a recent KPMG survey of C-level and Head of Business-Unit executives2 , over 60% identified five emerging technologies including cloud, mobile solutions, AI/machine learning, social media, and internet of things as having a high or very high impact on their business over the next five years. For example:
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