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64 LEXPERT MAGAZINE | MARCH 2017 TECHNOLOGY | COLUMNS | George Takach is a senior partner at McCarthy Tétrault LLP and the author of Computer Law. not only if you are a financial institution. Managing the legal, insurance and reputa- tional challenges presented by SMAC will be every organization's business. EXECUTIVE COMMITTEE OVERSIGHT Given the centrality of the SMAC and the novel digital technology agenda to your organization and the related opportuni- ties — but also the risks presented by them — it is worth asking how your organiza- tion should approach governance of these matters from the perspective of the C-Suite executive committee: the board of direc- tors in the private sector, or the equivalent executive governance bodies in the public sector. Herewith are a few thoughts on this important, timely topic. First, a preliminary consideration about board-level expertise: you should review whether at least one person on your board has sufficient expertise and experience in tech/IT/SMAC matters to serve as a cred- ible resource for the board. Many boards are asking this very question, and a number of them are inviting onto the board some- one with very direct and recent experience in the tech space. is makes sense, given that digital is clearly the way of the future. en there is the challenging ques- tion of how the board of directors should discharge its oversight function toward technology. Traditionally, this was done episodically, with the focus being on a cost analysis of major IT projects. Let me give an example. Your organiza- tion is replacing its core IT system; that may be the policy/claims system of an in- surance company, or the student informa- tion system of a university. is will be a very material project, it will bristle with new elements related to SMAC, and will cost, all in, many millions of dollars. Given its materiality, the chief information officer and possibly the chief executive officer will be asked to give a major report on it to the board at the outset, and then periodic up- dates as the project unfolds. ese reports typically track expenses to forecasted spending amounts. I'm not say- ing cost is not an important element, but in 2017 the board (or your executive commit- tee) needs to develop a much more robust approach to exercising oversight of a major, transformative project such as this one. NEW BOARD METRICS e first thing the board needs to do when a big, new, transformational IT project comes before it for consideration is to re- quire the CIO (and possibly the CEO) to outline a compelling business case for the new system. And cost is not the only metric to be taken into account. In addition, the board should want to know how the new IT system is going to affect the procedures and processes of your organization. If it's a customer-facing system, how is customer satisfaction being measured? at metric then needs to be reported regularly to the board, along with other metrics. What the board wants to be able to do for a major project is track its progress against the initial business case, but using factors that drive sales and profitability to your organization (in the public sector it may be customer satisfaction with the new service delivery). In many organizations these statistics are collected as a matter of routine, but they are not distilled and shared with the board. ey should be. INSTITUTIONAL DIGITAL CAPABILITY It's not enough for the board (or the cabi- net committee) to exercise careful oversight in respect of your largest or most transfor- mative IT projects. A board should also periodically (at least every six months) be reviewing how well management is per- forming on all its major projects. is can be tracked in the form of a "dashboard," a computer screen template that shows the status of various workflows or obligations, or various aspects of a services relationship. e dashboard may already exist in the or- ganization; if not, it can be created fairly easily and tailored to the board of directors. But again, the point isn't to simply mea- sure cost and schedule, but to drill down into the various drivers of the business case for each of the different projects. For exam- ple, are the new digital channels drawing in new customers? In the public sector, are the new public tools for engagement leading to higher user satisfaction rates? In short, what are the tangible benefits and advan- tages from the new digital mechanisms that are being deployed? From this more rigorous board over- sight, higher-level analyses can be distilled over time. A key question to ask is, how well does our organization do large-scale organizational, technological or process change in light of the new digital dynam- ics buffeting the company or public agency/ ministry? is is a vital inquiry, because if the answer is "not so well" then steps must be taken to rectify the situation. If you are in the private sector and can't adequately adapt to the digital environment, someone else is going to eat your lunch (and break- fast and dinner). Proficiency in digital transformation is not a "nice to have" any- more. If you can't do it, your organization will be relegated to the "has been" pile of history. And therefore meeting this chal- lenge becomes a core, ongoing agenda item for your board. PROFICIENCY in digital tranformation is not a 'nice to have' anymore; if you can't do it, your organization will be relegated to the 'has been' pile of history. And therefore meeting this challenge becomes a core, ongoing agenda item for your board.