At a recent Technology Advisory webinar on Digital PMO to increase workflow efficiency, BDO M&A Partner in the Sydney Corporate Finance team, Andrew McFarlane shared his insights into digital transformation post-COVID-19 discussing key considerations and challenges for boards and executives.
One of the biggest challenges for boards and executives is determining whether a certain digital program or initiative is right for their organisation or business.
There’s no doubt that the past few months have been particularly challenging for boards and executive teams. Many have needed to navigate their organisation through uncharted waters focussing on keeping the organisation afloat while at the same time managing new challenges, such as sudden cyber security and supply chain threats, health and safety issues and even heightened financial crime risks.
However, one of the biggest challenges for boards and executive teams going forward could be staying on top of their rapidly changing industries. Andrew says,
“Today, we are seeing industries being disrupted and changing faster than ever before. Boards and executives, therefore, need to ensure they are not only thinking about what the organisation or business needs to do to survive in their industry today but what their industry will look like in five to ten years’ time. While it may seem challenging to look this far ahead, leaders need ensure they don’t risk being left behind or eclipsed by the competition or new market entrants”.
Top tips for boards:
- Ensure your digital initiatives align with your long-term strategy - what will your business or organisation of the future look like and what technology is needed to support that future state organisation?
- Think beyond your industry – we are not only seeing changes within industries but greater overlap and collaboration between industries through cross-industry partnerships and joint-ventures. Boards and executives, therefore, need to be continually looking at how these changes may affect them and be on the lookout for new opportunities and strategic partnerships they can leverage.
- Make prioritisation a priority – when it comes to undertaking digital transformation programs, for many organisations the challenge is often not ‘what should we do?’, but ‘what should we do first?’ As capital and resources are limited and uncertainty is high, boards and directors need to ensure that decision making around which projects they sign off is robust.
- Have good people in place – you know what you’d like the organisation or business to look like in the future and what your priorities are, but how is the organisation going to get there and what resources will you need? As part of this, boards and executives need to assess the internal talent pool to ensure they have the right people to not only carry out but lead the project.
- Consider an ‘acquhire’ - many people often assume that digital transformation is an activity only carried out internally by an organisation. Today though, we’re seeing a growing number of ‘acquihires’ and acquisitions to obtain new technology capabilities, accelerating their digital transformation. An example of this are overseas acquirers coming into Australia, acquiring Australian tech or capability which is then taken back into Asia, Europe or other regions.
When in the execution phase of your digital transformation project or initiative, Andrew says to remember to:
- Deciding how to shift business models is important –Boards and executives sometimes need to deal with duality of business models for some period and decide at which point the business or organisation will switch from one model to the next and how that will affect resourcing, financial performance and even organisational culture. The media industry is a great example of this as once print-based businesses have needed to significantly increase their online presence and how that journey is best completed – e.g. swapping the printing press for the web designer.
- Ensure you are taking the WHOLE business on the journey – many of us know that one of the major reasons why projects fail is a failure to effectively engage and communicate with your people. However, many people forget that this also includes other stakeholders such as investors. Whether you’re a large listed company or a medium-sized business, boards and executives need to ensure they are taking the investors along on the journey as buy-in can be critical for that ongoing support and success of the project.
How can we help?
If you are looking to acquire digital expertise or future proof your business in these uncertain times through M&A, BDO can assist in sourcing the right acquisition opportunities and ensure each deal aligns with your broader strategic goals.
As you traverse the challenges of shifting and incorporating new business models, we can assist in asking the right questions to make that journey as smooth as possible. To find out more see our Corporate Finance and Technology Advisory services or contact your local office.