The Board’s Role in Purchasing and Monitoring Business Systems

Choosing the ‘right’ system to manage and monitor core business functions can be difficult and costly to organisations. Boards are becoming increasingly aware of the need to purchase systems that not only match core business functions and strategic direction, but also reduce administrative inefficiencies and increase productivity.

But what other key questions should Boards be asking their CEO or other executive managers when purchasing and monitoring business applications?

1. Benefits realisation and return on investment?

Once the right application has been selected as the ‘best fit’ for the organisation, the CEO or other executive should also present the benefits realisation and return on investment. What are the key benefits of purchasing the system in terms of strategic alignment and value for money? Do the benefits outweigh the costs? How long will it take to see a return, how many months/years is the payback?

2. What are our business intelligence opportunities?

What other opportunities can be leveraged from the application? For example, if a CRM (Client Relationship Management system) has been purchased can it interface with other applications including payroll and finance? Is the system scalable? Can other modules be purchased to further increase productivity such as mobile capabilities if managing a remote workforce?

3. Effective Monitoring Strategies

After the system has been implemented what types of reporting mechanisms are in place to ensure the system is performing as expected?  Is the system stable and secure? What strategies are in place to ensure the integrity of the data stored in the system is kept ‘clean’? That old adage, ‘Garbage In = Garbage Out’ can often be overlooked. Boards should have the mindset that ‘data is an asset’ and as such, all key organisational datasets should be monitored on a regular basis. This will ensure Business Intelligence opportunities can be realised.

4. What is the ‘cyclic review’ of business applications?

How often should a review of business applications be performed? What strategy is in place to ensure legacy systems are replaced in a reasonable timeframe to ensure business activities are not put at risk? If an organisation experiences significant growth in a short period of time, or if the government introduces new legislation that impacts business activities, how does the organisation respond to this opportunity? For example, the introduction of the NDIS (National Disability Insurance Scheme) will require not-for-profits in the Disability sector to ensure their business applications can cope with this new ‘insurance based’ reporting model. Board in this sector should be asking these types of questions as part of the Business Systems cyclic review.

Business applications play a vital role in any organisation. Boards are becoming much more IT savvy and aware of the competitive advantages of how the ‘right’ systems can maximise business opportunities. Boards require timely and accurate information in order to readily make informed decisions about systems. Whilst it is the CEO and/or executive and senior managers’ role to research and ultimately implement new organisational systems, it is important that the board reflect on the extent to which these systems meet excellent standards in order to develop and grow excellent services.