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Digital governance is a discipline that focuses on establishing clear accountability for digital strategy, policy, and standards.^[1] The word governance is derived from the Greek verb kybernan, which means “to steer.” Digital governance is a framework for establishing accountability, roles, and decision-making authority for an organization’s digital presence. (2) Therefore Digital governance helps to steer the company’s digital activities in the right direction. It turns the diverse energy of employees throughout the organization into a coherent engine that drives digital transformation forward

Digital Governance

Why does digital governance matter?

In order for an organisation’s digital transformation program to be implemented successfully it needs a very strong digital governance to turn the vision of the program into a reality. . It is important to realize that the following realities exist when going digital and should be incorporated when an organisation establishes their digital governance framework

Digital is pervasive. The use of digital content, channels and tools has led to exponential growth in new market segments, business models and ways to engage employees and customers. Companies need to find ways to adapt in how they differentiate and develop products, rethink customer engagement and communication, and handle employee interaction.
Employees are now broadcasters and publishers. Thanks to social networks, every employee can freely and easily broadcast to the world. Training and communication can help, but firms need to find smart ways to adapt to this reality – and tap its potential.
Decision-making happens at the speed of digital. Governance is traditionally about establishing a set of “rules and processes,” providing structure and guiding decision-making in a large-scale organization. But in a digital economy, decision-making approaches are changing and processes need to be adjusted accordingly.
It’s not just a content problem. Companies must be mindful that digital governance is not only about content and who has rights to contribute, edit or distribute that content. They must also consider how and where it is consumed and the potential for it to go viral.^[2]

Digital governance should not be viewed with the legacy mindset that it is a control mechanism because information flows are fluid

Why is digital governance important?

Organisations that are operating in a digital world is presented with unlimited opportunities but all the exposure encountered while going digital, raises new risks, such as cybersecurity threats as well as compliance failures and organizational silos.^[2]

New regulatory requirements demand action. Governments^[3] needs to abreast with the speed at which the digital world is moving, therefore it is always introducing new and emerging laws on tax, privacy, data handling and more, with steep fines for failure to comply.
Growing cyber security risks need to be addressed. Organisation today have to assume that attacks will occur at some point, and plan accordingly.
Perceived digital weaknesses can do irreparable damage to brand reputation. Consumers are becoming increasingly aware that when they bring organisations their business, they must also hand over their personal data. Therefore organisation that show themselves as untrustworthy data custodians will face a major loss of brand equity.^[2]

Therefore the new demands for digital capabilities and new risk from digital activities listed above, have made digital governance essential in all companies.

How to make digital governance framework work?

Organisations should focus on two important goals when designing the digital governance framework for their digital activities. Firstly it is important to coordinate all the different initiatives across the organisations, activities’ and initiatives should be prioritized, synchronized and aligned. Secondly sharing across the organisations are extremely important and this can only be achieved by using the common capabilities and resources.

Therefore the biggest benefit of digital transformation comes from sharing and coordination across traditional silos

Key mechanisms of digital governance

There are three major governance mechanisms that exist: steering committees, leadership roles, and shared digital units. Each of these mechanism has strengths and weaknesses in terms of delivering of the digital governance framework: sharing and coordination.

Governance committees. These groups, consisting of some of the most senior executives in the company, make decisions such as ratifying policies, prioritizing, competing interests, and killing low-value projects. Through their power to set policy and allocate resources, steering committees can help the enterprise to act in a unified way.
Leadership roles. Although committees can make decisions, they cannot drive change. New leadership roles include chief digital officers (CDOs) have been created to steer the digital transformation. The job of the CDO is to create a unifying digital vision, also to energize the company around digital possibilities, the coordination of digital activities as well as rethinking products and processes for the digital age. Whereas the CDO drives digital change top down there are also other digital leadership roles such as the digital champions which drives transformation at a local level.
Shared digital units. Committees can decide, and leaders can drive change. Digital units is centralized set of expertise and resources it may vary in size and role but all have a common goal to drive synergy across the firm. Some digital units help business units conduct digital initiatives, while others conduct all digital initiatives for the business units. All have resources such as skills, infrastructure, and financing that can be shared across the firm. Digital units can do what committees and leaders can’t do on their own. They can create shared infrastructure such as unified customer databases, an enterprise wireless platform, advanced analytics teams, and innovation labs.

References

^ Lisa, Welchman (2015). Managing Chaos: Digital Governance by Design. Rosenfeld Media. ISBN 9781933820880. {{cite book}}: |access-date= requires |url= (help)
^ ^a ^b ^c "Why digital governance matters" (PDF). EY Building a Better Working Wold. EYGM Limited. Retrieved 7 May 2017.
^ Dunleavy, P; Margetts, H; Tinkler, J (2006). Digital Era Governance: IT Corporations, the State, and e-Government. Oxford University Press. ISBN 978-0199547005.

[1] Lisa, Welchman (2015). Managing Chaos: Digital Governance by Design. Rosenfeld Media. ISBN 9781933820880. {{cite book}}: |access-date= requires |url= (help)

[EY-2] "Why digital governance matters" (PDF). EY Building a Better Working Wold. EYGM Limited. Retrieved 7 May 2017.

[3] Dunleavy, P; Margetts, H; Tinkler, J (2006). Digital Era Governance: IT Corporations, the State, and e-Government. Oxford University Press. ISBN 978-0199547005.

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