ABeam DX Insight No.17

DX Engine
- Digital Governance: 4 Levers and Cycles -

October 6, 2021

Kazuki Sugata

Executive Officer, Principal
Strategy Business Unit


As digital transformation becomes an essential element in corporate operations, companies run the risk of losing sight of the overall picture when the DX initiatives within the company become disorganized as they move forward proactively with specific DX measures. Therefore, another expected role of the DX organization is to play the role as a governance body, or more specifically, to prepare a system for digital governance.

If the corporate operations were compared to the operation of an automobile with respect to digital governance, the use of the following four “levers” becomes an important factor therein. Governance is most often associated with control, but it could perhaps be more accurately perceived as a navigational function through the cycle involving orientation, generalization, prioritization, and scaling. 

Figure: The four levers and cycle of digital governance

Figure: The four levers and cycle of digital governance

The autonomous planning of each business unit is essential to achieving digital transformation and ensure it leads to improved productivity and transformed business models. However, if this is left entirely to the business units, it can cause the directions of measures to become disorganized, while some departments may not know where to begin.
To avoid this, it is necessary for the executives or the DX organization to set for overall directions for DX planning. Keywords for DX planning within the company, such as “recurring”, can be set forth in alignment with DX strategy as directions for planning in each business unit to follow.

Independent DX planning in each business unit can cause each initiative to become fragmented and less effective. Such planning also stops at improving immediate workplace problems, and is less likely to produce initiatives with greater impact.
One way to handle this is to generalize business units into several groups and assign the mission of planning DX measures to those groups. For example, such groupings can be based on principle clients or markets, or on groups of products, to prevent the fragmentation of initiatives.

While it is essential to encourage free and vigorous debate in each business unit, the more ideas that arise, the harder it is to prioritize them. It is also often difficult for the business units themselves to compare the relative importance of measures proposed by several different business units.
For that reason, there is a need for a third party function to evaluate the priority of those measures. It is also important to define the criteria by which evaluations are made. For example, the DX organization could evaluate the various measures proposed by each business unit in terms of effectiveness and difficulty.

While it is preferable to have a system for strengthening and scaling up the most hopeful of the DX measures proposed, it can be difficult to involve other departments and invest more resources because the initial impact of measures is small. 
In addition to finding a quick win consisting of quick results, it is also important to build a support formation for smooth scaling up, strengthening the relevant team, including through support departments, and gaining the support of related departments through company-wide promotion and awareness. 

Running the cycle using the four levers of digital governance gives rise to DX measures with greater impact. These four levers will surely offer helpful hints for solving any problems that arise in your own company’s DX planning.

ABeam DX Insight

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