Cloud Computing thinking within The Board

I’m presently doing the Australian Institute of Company Directors, Company Directors Course for management education. I elected to do this, as when I went to the information sessions, I found out, to my surprise, that they are suggesting that company boards look to appoint more IT focused Directors. In Australia at least, the majority of directors have had an accounting/finance or legal background. If this is different in other countries, please let me know.

My understanding is that, in general, the boards have relied on the advice from or they have deferred to the accounting/finance based directors when difficult governance issues have arisen, that have related to IT. I’ve often wondered why this is the case, in particular now, with the commoditisation of hardware and software in this area being ERPs. The net effect is, in most cases, they just allow the companies to operate more efficiently. To keep the cost base at a point to compete against their existing competitors.

I myself, have not worked on an Accounts Payable, Accounts Receivable and/or General Ledger system for a number of years now. Whilst understanding the importance of them to the operations of the business, I find that they are not the areas that occupy the forefront of innovation within an organisation.

One of the modules, last Friday was Strategic thinking. The lecturer, actually mentioned Cloud Computing, which was something that I was not expecting at all, as an example of thinking laterally. Others, that I talked to at the course, had not heard of the term Cloud Computing before.

But this is the issue, Human Capital and Information Capital, are now beginning to be at the forefront of new organisational strategies. Where I live in Adelaide, South Australia, the local state based government, is expecting 50% of the workforce to retire within the next ten years. I’ve also heard figures as high as 60% of the workforce in some utilities over the same period. These Human Capital issues compound the Information Capital issues, because better means are required to capture that Information Capital of an organisation before it retires out the door.

At the same time, new strategies are required to either compete more effectively in existing Red Oceans or to find new Blue Ocean strategies.

How is the strategy going to be underpinned? Potenially by using technology! SaaS (Software as a Service) based applications that utilise Cloud Computing infrastructure services are being steadily used as new strategy option. They may not be the answer, to every strategy, but increasingly, as it becomes more difficult to find resources willing to work within companies, they will become a core part of an organisation’s strategy.

Are current boards or your existing board up to the challenge around this? Am interested to hear your opinions about this.

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