With over 800 companies in Australia appointing Chief Digital Officers, it is undeniable that digital has found its way to be part of the strategic core of many businesses.
Wedged between the CMO and the CTO, a Chief Digital Officer is tasked to drive growth, especially by converting traditional analog business into digital ones. This makes it the board’s duty to oversee and hold accountable digital technology and its capabilities.
Generally, a board has two fundamental responsibilities: to ensure compliance and to improve performance. In a broader sense, these responsibilities can be divided into the following areas:
- Vision, purpose, and values of the organisation
- Approvals of strategy and budgets
- Appointment and performance evaluation of the CEO
- Risk oversight
- Tracking external financial and non-financial reports
- Supporting effective engagement with key stakeholders
Digital, as a discipline, is still probably in its juvenile years. However, like legal, financial, and risk, digital is already playing a major role throughout every part of an organisation. With technology in a state of constant development, it is likely that this trend will only become more and more prevalent. Conversely, less than 40% of companies believe that their business leaders are equipped to harness and lead digitisation.
From a digital perspective, there is now a drive to provide high-quality, insightful, and timely information that a board can take action on. With so much data coming in, it is important for digital to filter out unnecessary information and focus on providing quality data to maximise its efficiency.
How Can a Digital Performance Report Educate a Board?
Having an expert in digital on a board is a step towards the right direction. With its relevance to technology, analytics, customer behaviour, and risks, digital expertise brings a new insightful lens to discussion.
Depending on the industry and mission, there are few key performance measures and risks that can be used to report the organisation’s overall digital health. These can either be summarised in a board report or built into a reporting dashboard.
Ordinarily, you would also include a report on “actual versus planned” and an explanation on the variance.
Here are eight factors a digital performance report can shed light on:
Strategic overview. It provides a summary that includes both internal and external strategy. Along with its planning objectives and KPIs, it also covers data, channel, process, technology, and customer strategy at a minimum. A constructive view of all assets, their interconnection, and the projected roadmaps will allow nontechnical board members to understand how digital is connecting internal and external stakeholders.
Brand performance. Tools like Sprinklr can present regular benchmarks for brand sentiment and reach. This also allows the board to get a topic-based view of brand priorities. KPIs such as brand searches on search engines and mentions on social media will show how strong a brand is. Sentiment will allow businesses to judge what the perception is in the market.
Customer analytics. The customer should be at the centre of everything a business does. Customer analytics allows boards to see performance and feedback throughout the customer lifecycle. The report should show ROI on acquisition strategies and key account performance per channel. Information regarding retention and return rates and customer feedback will also allow a board to benchmark lead and lag metrics.
Asset performance and value. A board should be able to calculate a value on all digital assets, from the website to the CRM to customer support. Aspects such as downtime, the value of the data and the cost of maintenance should all be added to the report.
External customer-facing assets. Information on portals, tools, social channels, and websites can be supplied. The web rankings for key industry terms and the overall number of new and existing users can be provided as well.
Risk and issues. The report should provide information on brand, process, customer, and legal risks. This also might cover protection from DDoS attacks, uptime, bottlenecks, or even privacy and data risks. This also might include revenue risk and changes to the market.
Competitive landscape. It presents key competitive changes and challenges to the digital position.
Altogether, a board report on digital performance can add as much value as a marketing or financial report.
As businesses rely more on digital assets to conduct day-to-day operations and plan for the future, a temperature gauge and a north star for planning are required. Boards that don’t have full visibility over the performance and risks of their digital assets are liable to make decisions in more of a bubble.
An old-fashioned mindset of “digital is just a channel” makes a business liable to be overtaken by disruption. Similarly dumping all the growth potential into a digital asset or customer interface also can leave a business at risk of losing more than just a shirt.