Managing technology risk

In an extract from recently published book Digital Governance (Routledge, 2020), co-author Jeremy Swinfen Green discusses the problems of managing technology risk.

The problem with technology

It sounds like a wonderful opportunity. Using technology, businesses can deliver the products and services that people have always wanted (even if they didn’t always realise it) – customised, instant, convenient and available anywhere.

But that doesn’t mean it’s an easy opportunity to manage. Unfortunately, in over 80 per cent of cases digital transformation initiatives fail. The truth is that managing technology is hard, especially for people who are not technologists. Sometimes it seems that technologists speak a totally different language full of TLAs (Three Letter Acronyms). They have different attitudes to risk, deliverables and even time from their non-technical counterparts. They think in different ways, far more literally than most people.

Well, that may or may not be true. But the difficult in managing technology doesn’t stem from the nature of the people involved. It’s to do with the nature of technology, which is often a catalyst for new ways of thinking and working.

Managing rapid change

Technology can bring rapid change and managing change is always hard. It is about moving forward while much of governance is about using backward-looking tools such as financial accounts. In addition, most organisations resist change: people in them are cautious and generally like to remain comfortable doing and using what they know.

People are often particularly worried about technological change. They think, “I’m going to lose my job to a robot.” Or “I’m going to look stupid because I don’t understand this new stuff.” And because they are frightened, they look for excuses to avoid change: “I’d never use that, so I don’t think anyone else would either.”

Managing rapid technological change is particularly difficult. Decisions that may need considerable thought need to be made quickly and circumstances may have changed before the decision is made.

And if circumstances (including technology) change so rapidly, the temptation is to avoid making any decisions in the hope that the pace of change might eventually slow, allowing more reasoned decisions to be made.

Watching out for technology risks

It’s inevitable that technology will change and bring changes to society along with it. You might as well accept that and start making decisions about how you are going to react to technology, either by changing your products and services or by changing the way your organisation delivers those products and services.

But before you make any decisions, it’s a good idea to remember that introducing new technology carries many risks that may be difficult to manage. Why is that? There are a number of reasons:

  • The risks may not be well understood if they haven’t been experienced by anyone on the team. With any new technology that could well be the case.
  • The skills required to manage those risks may not be available in-house. This may mean you become dependent on long-term relationships with third parties and contractors. Inevitably they will not understand your organisation as well as you do, although they may well think they do. They will also be more loyal to themselves than to you.
  • If you are using new technology, your project may be experimental with fuzzy goals and outputs that have not been precisely defined, because they are hard to visualise or anticipate.
  • People involved with the implementation of the new technology may make assumptions that you do not hold, or they may use jargon and words that mean different things to different people. Misunderstandings and disappointments can easily arise, eroding trust and damaging team spirit.
  • The normal iterative change processes that many organisations used to use to implement change can be far too slow to be effective when technology changes so fast.

Conversely, another common experience is that the scope of proposed change is implemented successfully but lacks ambition, because of fear or because of a lack of imagination about what might be achieved.

Another problem is “virtuality”. It’s easy to visualise a new machine. It’s far harder to visualise a new end-to-end process. There is a danger that the focus of digital transformation can be on making a physical change, in effect bolting a computer onto a system to make it a bit more efficient, rather than thinking how the system as a whole could be made radically more efficient and effective through technology.

This problem is often made worse by a focus on a process or even a particular endpoint, such as a product or output from a process, rather than a wider focus on continued business success.

And just to make things a little worse, the implementation of technology is often driven at speed, perhaps because it was started late and people are panicking, perhaps because the enthusiastic developers want to ignore due process (and/or compliance) and get to a result as soon as possible.

If you mean to be successful in the transformative use of technology, there are a number of things to consider. Ensure that any technology initiatives are truly integrated into your organisation: having a separate “technology change” department is a certain route to failure. Look at all your processes and see where most value is to be found: don’t employ technology for the sake of it. And be pragmatic: if you are over-ambitious and try to do everything at the same time you will probably fail at everything.

The most important principle is to focus on the people who will be affected by technology – the end users, whether they are employees or customers. If you forget them they will simply reject your technology and avoid your products and services.

Transforming an organisation through technology can never be easy. But if you are pragmatic and manage the risks involved you will have a far better chance of success. Get it right and the rewards are potentially enormous.

© Business Reporter 2020