AI is a convenient topic when discussing IT strategy with the board of directors. You currently cannot escape the news coverage at the moment. Everyone has an idea of what it is. Everyone wants to be a front-runner with it. Everyone has read about the overarching risks and benefits. However, while AI drives digital transformation, it is seldom the big, explosive trigger for growth or disaster we expect in our subconsciousness. Thus, let us look at three situations: when AI should be at board level and when to skip over it.
Yes, Business Strategy Disruption
Suppose your company provides services around personal assistance, transcribing meetings, or live generation of close captions for online events. In that case, AI represents both a chance to supercharge your company and to destroy it. For many businesses on the margins of white color work, data entry, first-level support, and travel agencies come to my mind, AI can reshape how they deal with customers. However, not using generative AI in these scenarios carries the risk of competitors outperforming your company. Consequently, many companies have to adapt their business strategy to meet the challenges AI brings with it.
No, Just Another Tool
For the mass of companies, however, generative AI will present nothing more than another tool in the toolbox of corporate efficiency. Suppose a company plans to utilize AI to enhance chat support or assist engineers in prototyping. In that case, AI is a tool in the overall strategy. AI is neither a strategy nor a risk in itself. Thus, management and the responsible departments should deal with it. Management might mention it in the overall plan if the expected impact significantly changes the trajectory.
Yes, Talent Gap in Workforce
Even with an AI strategy, the talent needed is sometimes hard to come by. Assuming there is a significant gap, especially in middle management and up. This gap can become a substantial risk and should be reflected in the overall human resource and talent strategies. Consequently, the board should be involved when management has adapted the plan to overcome the talent gap and tackle the issue.
No, Recently Considered AI Strategy
If you are reading technology news, AI appears to be developing within days. However, many strategic considerations haven’t changed much since OpenAI released ChatGPT-3. Thus, if the board recently did a study session on AI or the strategy and risk considered in the past six months, there is little need to reevaluate the situation. Management should be able to monitor the field for the business impact continuously. Once a significant effect is predicted, it would be a reasonable time to examine the strategy and risk aspects again.
Yes, Enhanced Cybersecurity Risk and Strategy
Today, we experience two kinds of scams. The mass E-Mails about Nigerian princes wanting to send you a million tons of gold, and the handcrafted, emotional E-Mails designed to not sort you out by making you suspicious about the good fortune. With the advances in AI, criminals can now send handcrafted E-Mails in a mass mailing fashion. Thus, the cyber risk previously associated with executives and high-ranking government officials becomes a problem for the general workforce. Combined with the new requirements to disclose cyber incidents in publically traded companies, this poses a significant new risk for the company. Especially in fields such as banking and healthcare, which have many knowledge workers with access to customer data, the risk is substantial. The responding change to the cyber strategy is worth the board’s attention.
No, No Benefits in Digital Transformation
Whether a company will benefit from AI should be at the forefront of deciding whether or not it is a topic to dedicate precious board time to. For many companies today, AI isn’t even a fringe benefit. If you look into the trades, some of the largest contracting businesses still have websites and IT systems that can serve as a call back to the earlier days of the Internet. However, none of these businesses is doing poorly. Thus, an essential question of whether or not AI is a topic to dedicate precious board time towards is whether AI-induced changes will benefit the overall business.
Use Time Wisely
Time on the board of directors is limited. Many topics fight for board attention, even in often overlooked areas such as IT. The hype around AI requires a nuanced approach. Some companies will benefit tremendously by having their strategy and risk evaluation adopted with and to the development in the field. Others won’t feel a direct impact. Asking how fundamental the change is to the continued growth of the business is the first step to deciding whether or not time on it.