Governance (Go) of the DaWoGoMo Transformation Model (1/2)

Governance within an organization refers to the processes, structures, and mechanisms put in place to manage and make decisions. It involves defining and assigning decision rights and authority to individuals or groups within the organization. Governance ensures that decisions are made effectively, efficiently, and in alignment with the organization's goals and objectives. Effective governance in the context of digital transformation involves addressing challenges and ensuring that decision-making processes are well-defined, transparent, and accountable.

Digital transformation involves the integration of digital technologies into all aspects of an organization, which can significantly impact decision making.

• Technologies such as artificial intelligence, internet of things, and automation are increasingly capable of making decisions that were traditionally made by humans.

• Digital transformation brings about new challenges and dilemmas in decision making.

If an organization is looked from the lens of bundle of costs, Governance transformation need to identify and minimize the total cost of decision rights - including financial costs, costs of bad quality, costs of mistakes and costs of not making decisions.

• Digital technologies play a significant role in reducing coordination costs and improving efficiency.

• Technologies like blockchain, cloud computing, and enterprise resource planning systems can streamline information retrieval, reduce conflicts, and automate interactions.

• Hiring good managers and professionals, as well as vertical integration and alliances, can help reduce decision costs and work costs.

Decision Rights and Decision Makers

There are two types of decision rights:

1) Decision Control Rights: involve decisions that determine what will happen, such as approving projects and monitoring their progress.

2) Decision Management Rights: involve decisions related to how things will happen, such as resource allocation and implementation.

Also read: Factors to consider while automating Decisions

Who are the Decision Makers?

The primary decision maker is the individual or entity that is ultimately held responsible for the decisions made. They are the ones who set the goals and objectives for the digital technology to make decisions on their behalf. The primary decision maker has control over the boundaries and limitations of the digital technology's decision-making capabilities. They program the technology to act as a secondary decision maker, following certain algorithms or rules.

The secondary decision maker refers to the digital technology itself, which is coded to act in a certain manner based on the instructions provided by the primary decision maker. The secondary decision maker makes decisions externally, taking into account the goals and objectives set by the primary decision maker.

Note: This is the notes from the course Advanced Digital Transformation