Failure to govern emerging tech could be a major risk
The development and application of emerging technologies such as artificial intelligence (AI), machine learning and cloud computing is bringing about many benefits to organisations. However, enforcing effective governance of these technologies is key to innovation and guarding against the risks they may pose.
This was the word from Tichaona Zororo, director: digital transformation & innovation advisory at Enterprise Governance of IT, and immediate past president of ISACA South Africa, delivering his keynote address titled: ”Why effective IT governance processes are critical for emerging technologies,” at the ITWeb Governance, Risk & Compliance 2020 event taking place at the Forum, in Bryanston.
Zororo is a renowned speaker and member of, and advisor to a number of boards, audit and risk committees. He is credited for being the first COBIT Certified Assessor in Southern Africa, the first person from Africa to sit on the ISACA board of directors and to chair its Audit and Risk Committee.
While the adoption of emerging technologies is driving new business models, improving efficiency and enhancing customer value for many organisations, Zororo pointed out that such promise will not be realised without great care and effort into how the development and usage of these technologies should be governed.
“A plethora of new technologies are entering the enterprise – AI, robotics, machine learning, Internet of things (IOT), DevOps and blockchain. All these technologies require good IT governance, for instance, good cyber security governance, good AI governance, good social media governance.”
AI biases, improper use of social media, data breaches, and compliance irregularities are among many dangers that can arise from ungoverned use of emerging technologies.
He added that organisations should be willing to set aside a good budget for this to ensure they have the right people to implement them and the right skills to put the right governance structures in place because those who fail to govern effectively the use of information and technology, could be held accountable.
Zororo also highlighted the importance of implementing an effective and efficient governance system, over digital transformation, as the starting point for generating value because it is crucial to not only adopt the latest technologies but to also align the organisation’s strategic objectives to stakeholder needs and the company’s performance direction.
“It’s all about the business, it’s never about the IT, but the reason business adopts emerging technologies is because it realises the importance of these technologies in achieving the business objectives in order to adapt to new business models and the demands of the fourth industrial revolution. These technologies create new ways of operating, streamlining process and creating new sources of revenue, but things can go wrong if there is no good governance.”
AI biases, improper use of social media, data breaches, and compliance irregularities are among many dangers that can arise from ungoverned use of emerging technologies, he added.
Responsibility lies with the board
Governance frameworks such as King IV and COBIT, according to Zororo, provide guidelines on the important role that should be played by the board of directors in digital transformation and governance strategies, as well as the evaluation and monitoring of these technologies, and conceptualising a roadmap on how they should be used, to deliver utmost value for the enterprise and its shareholders.
“The question is, do we have the right people at board level that are providing leadership of digital and the right governance structures that exist to implement a digital strategy? If the answer is yes, then are they willing to fund the innovation roadmap of this strategy?”
Referencing SA's first fully digital bank, TymeBank, Zororo emphasised the role of innovative use of technology in enabling the bank to succeed in a short time frame.
“This bank has disrupted traditional banks and has been able to onboard over one million customers in 12 months, with around 400 000 of them being classified as active customers.
“TymeBank is relying heavily on the use of AI, machine learning, cloud computing, biometrics, chatbots and predictive analytics, with around 85% of its applications sitting in the cloud. Its CISO reports directly to the CEO and they have a board of directors who have a good understanding of innovation and who have drawn up a digital roadmap. This is not always the case with some banks; hence these one million-plus customers are coming from traditional banks already.”
He pointed to major traditional banks losing market share to disruptors and multinational enterprises such as Kodak that faltered because they could not adapt fast enough to new business models enabled by new technologies.
Many organisations have also invested heavily in emerging technologies, but failed to use them effectively, resulting in financial losses and lack of value, he continued.
“While governing these technologies presents a major practical challenge, failing to establish a governance framework that embraces disruptive technologies and encourages innovation while minimising risks could prove more costly for organisations,” concluded Zororo.