The Safe Journey Toward Sound Governance
The Safe Journey Toward Sound Governance
discover | Monday - 30 / 09 / 2024 - 7:29 pm
As we step into the era of digital transformation, companies that once enjoyed dominance over local markets have found themselves facing a daunting challenge: an influx of local and international players from all corners!
In the face of this challenge, your organization has no choice but to enhance its competitive edge through strategic initiatives, chief among them being the adoption of Enterprise Resource Planning (ERP) systems.
In today’s blog post, we won’t reiterate the benefits of our system in bolstering your organization’s strategic planning, safeguarding its reputation, or assisting you in making smarter decisions in a timely and efficient manner (all while enhancing overall operational efficiency).
You might be surprised to learn that today, we’ll be discussing a critical factor that is often overlooked amidst the gleam of new dashboards and simplified workflows within the system. Today, we’re talking about “data governance.”
We can liken neglecting governance to sailing on a dilapidated ship full of holes through which water seeps in; this ship is doomed to flounder under the weight of its inconsistency (imbalance) while sailing.
Why Data Governance is Important:
Imagine basing your reports on inaccurate, outdated, or duplicated data. Simply put, the decisions made on this basis will lead to operational chaos, lost opportunities, and ultimately, a system that functions far below its true potential.
Effective data governance ensures that the right data is available in the right format, enabling informed decision-making. Moreover, while overcoming data silos is a competitive advantage in ERP systems, inconsistent data formats, missing fields, and conflicting values are all insurmountable barriers.
Comprehensive governance establishes clear standards and protocols, transforming an ERP system (such as Logicx AI) into a unified data center that fosters seamless collaboration and improves workflow.
Speaking of seamless collaboration, do you know how frustrating it is for your employees to work in a system full of inconsistencies? Imagine that could lead them towards quiet quitting! And you don’t have to take that risk.
Data governance through standardized processes and readily available resources simplifies the learning curve, which in turn boosts employee acceptance of digital transformation, accelerates the adoption of your new system, and unleashes the system’s true potential.
“Nine million dollars is the average annual cost incurred by companies due to poor data quality [source].”
“Successful businesses require sound governance and an excellent Enterprise Resource Planning (ERP) system. It’s not just for companies with boards of directors; governance refers to how you make decisions about running and overseeing your business. It’s your best protection against bad practices that could harm your customers, employees, or reputation. It also helps your business become profitable, responsive, and customer-focused.”
“Governance and ERP are crucial for every business, but governance is ultimately a cultural issue that encompasses aspects of successful or failed implementation, such as creating strong processes, monitoring project and business objectives, proactively managing risks, and investing in the project – and ensuring they are met. It’s a top-down approach that sits above the day-to-day focus of project management. Project governance scrutinizes anything that could jeopardize the project – from system performance to distractions caused by misguided business improvements to any external factors that could affect the outcomes. Whether you’re an entrepreneur or the owner of a growing business empire, it’s essential that all team members clearly understand your mission and values. Your clear values are the “compass” for your business – or at least they should be. Whenever questions arise about customer service, product development, project priorities, or new investments, your values hold the answer.”
We have witnessed the detrimental effects of inadequate governance on businesses in recent times, particularly in instances of corporate failures. How can you guarantee that your organization is progressing along the correct path?
Unifying Team Efforts at All Levels:
If your project vision isn’t clearly communicated, the path to success won’t be clear either. Failing to align your executive team with the project’s requirements can lead to disaster through differing agendas, perspectives, and goals.
Time Wasted = Money and Opportunities Lost:
Your project timeline can quickly derail with slow executive decision-making, approvals, or a poorly defined chain of command.
“Too many cooks spoil the broth.”
Without executive ownership through a steering committee and well-represented project team, you can expect a project plagued by delays, lost opportunities, and wasted resources, with teams working toward conflicting objectives.
It’s crucial to establish a strong governance framework (for people and processes) from the outset and create the right communication plan for decisions, approvals, and escalation points for decision-making and problem-solving from the start of your project.
What is the typical approach to establishing governance?
– Project governance requires ownership and commitment from both the client and the partner. On the client side, the primary person or owner is often referred to as the project sponsor, and on the partner or vendor side, they are often called the primary supplier. If the project is large in scope, your partner may also assign a project executive to provide additional oversight of the implementation. Each individual on the project team will have an important role to play, and this role will be clearly defined.
– Determine the frequency of steering committee meetings. These are regular meetings for your governance team to review the project and take action as needed to keep the project on track. The committee can consist of board members or C-level executives who are appointed for the duration of the project.
– Ensure a process for risk, issue, and escalation management is clear. All risks, assumptions, issues, and decisions must be captured and tracked in a shared project RAID log (Risk, Assumptions, Issues, and Decisions), so there is complete transparency and accountability for both the partner and the client.
– Report at all levels through regular project status reports to the team and the steering committee. We use a traffic light system – i.e., the three colors; red, amber, and green (RAG) – to illustrate the project status as a way to highlight areas that need focus and to keep the project on track.
– Expectations around communication, response times, meeting frequency, and collaboration. Expectations around resolution (how quickly will this issue be looked at?) and decision-making (who has final say on this?). This requires agreeing on escalation points between all parties and creating a “chain of command” or reporting lines to ensure a smooth and seamless decision-making process.
Does every project need project governance?
Well, not necessarily. For most Enterprise Resource Planning (ERP) projects, given their size and complexity, some form of governance is already in place.
However, even for smaller, simpler projects, basic governance is recommended to ensure that the necessary mechanisms are in place for project success.
Can you dispense with project governance in an emergency?
If you like the idea of approving the construction of a new office building for your company but don’t follow its progress at all, then you accept the possibility of exceeding the time and budget, and some “surprises” in the design (hello, no elevator to reach the underground parking lot?) as normal!… The same applies to adopting an enterprise resource planning system. Theoretically, you will get what you agreed on, but given the importance of the project and its long-term strategic impact on your business and its well-being, do you risk taking a completely hands-off approach without stakeholder oversight? We don’t think so.
Reducing risk is an active process and requires responsibility from both sides – so executive engagement in governance (and organizational change management!) is essential. Experience tells us that the most successful project outcomes are born from clarity, collaboration, and trust.
Is governance the same across all organizations?
Short answer: No. Governance will vary across organizations depending on their specific requirements, especially if there are any legal reporting or implications involved in the project.
As previously mentioned, while all partners share the same end goal for a project governance approach (i.e., client success), we have all fine-tuned our frameworks and processes based on our past experiences, internal capabilities, and available resources.
Project governance is also not a one-size-fits-all activity. For a governance model to be successful, it must be carefully designed to meet the specific needs of the client and reflect an appropriate level and frequency of communication (meetings, reports) to make the best use of stakeholder time and availability. In other words, coordinate and engage (don’t alienate and overburden).
To ensure our projects run smoothly, the moment we create a project for a client:
Smarter project governance, better results.
A well-managed Enterprise Resource Planning (ERP) implementation project is an exercise in great collaboration and communication.
Without top-down client commitment, the partner will struggle to deliver agreed-upon results on budget and on time. User engagement will be lackluster. And without the partner’s organized approach to quality assurance and simplifying the complexities of implementation, your project will stumble and falter. Governance ensures you’re better together.
Leadership is the Key to Governance:
In any organization, leaders must lead. This means they should not only embody the organization’s values in their behavior but should also be seen to do so. If the CEO is lax about security, doesn’t give much thought to customers, and treats employees poorly, the organization will suffer.
It’s not just about behavior or problems for the HR team. Especially in today’s digital world, business leaders must be role models for the security practices they expect from others. By creating a security-conscious and risk-aware culture, you can reduce your company’s overall risk profile. Governance takes into account all business risks, from IT and security to competition, local and international politics, economic and demographic changes, climate change… and more.
Data Governance and IT Security:
Governance systems and enterprise resource planning play a crucial role in data governance and IT security. Establish and enforce practices and procedures around data security – from password selection to multi-factor authentication, there are many easy-to-deploy and user-friendly measures.
You also need to know what data you hold and any requirements around data sovereignty, storage, and other requirements. Customer data is particularly sensitive, and companies need to consider and comply with many local and international regulations.
In Saudi Arabia, the Notifiable Data Breach Scheme also imposes obligations on companies in the event of a data breach, where you must notify any affected individuals as soon as possible.
It is your responsibility to understand and comply with all your obligations. Good governance practices can help ensure that you are aware of all relevant requirements.
Enterprise Resource Planning (ERP) and Governance:
As we’ve discussed, governance and ERP are both critical for any company. Since Logix AI is likely to hold a wealth of sensitive data, it is an integral part of your governance plan. This makes it essential to ensure it’s configured appropriately and securely.
Ideally, our system will integrate seamlessly with your other business systems, as this will improve security, simplify governance, and streamline operations. Here, we recommend a modern solution with robust data exchange and information security capabilities.
Benefits of Good Governance:
As mentioned, good governance has numerous benefits. If you can clearly articulate your company’s values and mission, you can ensure that it is operated and managed accordingly. As a result, you should see benefits such as:
– Decreased business risk.
– Reduced IT and security risks.
– More responsive operations.
– Improved customer experience.
– Enhanced reputation.
– Business intelligence.
– New business opportunities.
These last two deserve special attention! One of the great benefits of governance is its ability to help you discover new business intelligence and opportunities. If customer data is handled appropriately, you can use analytics to help generate insights that enhance the business. And if employees and leadership are aligned with their organization’s values, these insights can be evaluated to improve and expand the business.
How Secure is Logix AI System Within a Governance Framework?
A common question is: How secure are cloud-based Enterprise Resource Planning (ERP) systems, particularly when handling semi-governmental sector data?
The answer is: remarkably secure. Cloud-based ERP systems are renowned for their robust security features. These systems operate on advanced infrastructure, including state-of-the-art data centers equipped with comprehensive physical security measures. Often, these security measures surpass what a typical government or municipality could provide to secure on-premises systems performing similar functions.
Data encryption is another cornerstone of cloud-based ERP security, safeguarding sensitive information both at rest and in transit. Cloud ERP providers regularly update their systems with the latest security patches and enhancements to address vulnerabilities and mitigate emerging threats, maintaining a proactive stance against potential attacks.
Compliance with industry-leading standards such as SOC 2 and HIPAA ensures that cloud-based ERP systems adhere to stringent security and privacy requirements. Redundancy and disaster recovery mechanisms play a critical role in ensuring high availability and resilience, minimizing the risk of data loss or service disruptions in the face of hardware failures or natural disasters.
Authentication mechanisms like multi-factor authentication (MFA) and role-based access control (RBAC) enforce strict access controls, while powerful security monitoring tools detect suspicious activities in real-time.
Finally,
When it comes to governance, a little bit is enough. What level do you have? If you are unsure, or if you would like to learn more about how to help good governance for your business and information technology, we will be happy to assist you.
