Deloitte and SMU surveyed 48 executives to identify the four traits.
A study conducted by Deloitte Southeast Asia and the Singapore Management University said there are four traits that could identify digitally mature organisations based on how they manage the governance, risk, and compliance aspects of digital transformation.
From the second to the third quarter of 2021, Deloitte and SMU interviewed 48 Singapore-based executives, who have been categorised into three, based on their self-reported digital maturity level: Leaders, Chasers, and Explorers.
Based on their respective names, Leaders are organisations that consider themselves as “quite or very advanced” in terms of digital transformation. Meanwhile, Chasers are those with moderate progress, and Explorers are those with “not very advanced” progress.
First trait: Knows the importance of a governance body
Deloitte and SMU said the first trait of digitally mature organisations is the “ability to recognise the importance of a formal and proactive governance body for digital transformation programmes.”
Data from the study showed that having a formal governance body or committee for digital transformation is more prevalent in Leaders (65%) than other organisations surveyed (49%).
More than two-thirds or 70% of Leaders also understand the importance of having a body or committee, saying they should have a proactive role in the organisation, the study showed.
Meanwhile, 50% of organisations that do not have such a body or committee expressed plans to set up one in the future.
Second trait: Sees technological readiness as their weakest governance link
Digitally mature organisations regard technological readiness as their weakest link in the governance of digital transformation programmes, followed by mindset readiness, and multiple decision-making points, according to the study.
The least digitally mature organisations, on the other hand, ranked technical readiness at the bottom of their top three weakest governance links.
Third trait: Places ownership of risk identification with individual business units
Leaders were more likely to have their individual business units (45%) bear the primary responsibility for risks associated with their digital transformation programmes.
SMU’s School of Accountancy Dean, Cheng Qiang, said placing ownership of risk identification and monitoring activities on individual business units facilitates an “enterprise-wide view of risk.”
“[It] enables the functions of enterprise risk management, compliance, and internal audit functions to focus fully on their roles – that is, providing objective assurance, as well as advising, monitoring, and reporting on the effectiveness of the organisation’s risk programme to management,” Cheng added.
Fourth trait: Acutely aware of their programmes’ regulatory compliance complexity
Digitally mature organisations “strongly agree” that regulatory compliance has become more complex as a result of digital transformation initiatives, as reflected in the survey.
The same type of organisations also perceives regulatory non-compliance to be posing a high or extremely high risk.
The study also showed that 85% of Leaders were able to manage “well or very well” the regulatory compliance aspects of their digital transformation programmes.
Leaders have also adopted regulatory technological tools and appreciate their benefits (60%).
Meanwhile, 58% of Explorers have a neutral stance about the benefits of these tools and 28% of them do not know or have yet to adopt such.
Source: ASIAN BUSINESS REVIEW.