on February 25, 2020 in Investment Governance

The Digital Investment Governance Imperative (Part 3 of 3)

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In the third and final installment in this series, the remaining elements of an effective digital investment governance framework will be outlined:

  • Portfolio and actionable analytics
  • Enterprise-wide integration
  • Robust initiative analysis
  • Traceability
  • Adherence to governance and audit compliance


Portfolio and Actionable Analytics

Very much in vogue as a staple across many industries, portfolio-based management and actionable analytics have become a focus across a wide range of industries where results are driven through execution of strategic initiatives that, while not IT-exclusive, are typically IT-intensive.

Portfolio management and the more general analytics area are driven by advancements in data visualization and robust algorithms. However, in the strategic initiative management domain, the value of these capabilities is bounded by access to robust underlying data that provide the taxonomy, context, precision and timeliness required for these tools and techniques to be of value.

A digital governance framework that institutionalizes an organizational investment model, standardizes taxonomy, and incorporates real-time closed loop benefits tracking delivers the data bed required for effective portfolio management and actionable analytics. By including these capabilities as part of the governance framework, continuous planning and optimization can be executed through above the line/below the line analysis across any combination of dimensions from strategic value, to impact on near term expenses, to performance of top investments aligned to key strategies/corporate capabilities,  to level of investment, or extent of benefits.


Enterprise-Wide Integration

A digital investment governance framework provides a reference system for strategic initiatives, but also must maintain a relationship with other systems of record throughout the enterprise.

Links with financial systems at the general ledger level can automatically capture, in real-time, data for tracking benefits, such as increased revenue. The investment management platform can be used to directly capture benefits that are not represented as credit-debit entries in a general ledger such as cost take-out. Bidirectional feeds with project execution and management systems can provide high level initial milestones to drive detailed scheduling or receive real time updates on progress and resource utilization. At a system level, integration with SSO architectures can drive automated provisioning for digital investment governance platform users, including assignment of the appropriate access profiles based on active directory definitions.


Robust Initiative Analysis

In an environment where rapid iteration and continuous planning are incorporated into the rhythm of an organization, it is important that a governance framework include the ability to easily iterate on potential initiatives. This process generally takes two forms.

First is the concept of reworking and reshaping an initiative in the feasibility phase, perhaps in response to feedback from management during the review process or as part of the collaborative process between business, IT and finance. A governance framework must not only provide support to make this process simple but also the ability to retain and easily analyze how a proposed initiative evolves over time, highlighting modifications to clearly compare and contrast.

Second, many initiatives hold potential to achieve desired outcomes from a number of alternate paths.  A solid strategic investment management platform must provide the ability to robustly explore all alternatives to meet desired goals, clearly delineating elements that are shared across all scenarios, allowing focus on the unique attributes of buy-versus-build options, permanent-versus-contingent labor alternatives, or operate-versus-outsource choices, to name a few common alternatives.



Increased velocity, visibility and accountability makes traceability more important than ever. An effective governance framework should include comprehensive and fully automated auditing capability to document when changes are made to any element in an investment and by whom.

In addition, workflow history provides feedback for continuous process improvement by documenting the length of time a work package remains in a queue and profiling overall velocity of decisions system-wide. Finally, the very act of documenting verification and approval of benefits, for example, naturally drives more careful consideration not just here but at all phases of the investment lifecycle.


Adherence to Governance and Audit Compliance

A comprehensive framework for managing the end-to-end strategic investment process is critical to ensuring treatment of costs and financial benefits are addressed in accordance with GAAP, as appropriate, and consistent with corporate financial reporting standards.

The value derived from careful review and adjudication of corporate investment decisions is significantly diminished if the financial basis for those decisions is invalidated as a result of audit or other compliance issues after the fact. In addition, board-driven reviews of corporate governance models often conclude that greater standardization, clarity, and transparency are required around all aspects of the strategic initiative process. The resulting mandates often drive a digital investment governance imperative.

By incorporating these elements into a comprehensive approach managed in an end-to-end technology platform, organizations can meet the digital investment governance imperative to address the demands of stakeholders and shareholders, developing and capturing intellectual capital that can create sustainable competitive advantage and drive long term value.

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