Data, Data Centers and Your Board Materials

Nicholas J Price
6 min read
For the last couple of decades, boards have been increasingly concerned about what data they have and how digital processes can be used to store that data efficiently and securely. Industries that require managing large amounts of data have needed data centers to store and process data. In recent years, cloud storage, combined with data centers, has been a viable solution for many companies. Just when companies figure out the best way to manage their data, new technology comes along and begs many new questions about how to change the structure and configuration, as well as how to make changes efficiently and with as little cost as possible.

The newest disruptor on the scene is artificial intelligence (AI). AI is still in its infancy, but it will soon be a major disruptor in business and in boardrooms. Manufacturers have already discovered how AI can make use of robots to take care of mundane tasks, freeing up humans to tend to higher-order work.

Data Management and Your Business

Businesses need faster, better and more secure ways to manage their data. To evaluate their processes, boards need to be looking at what data they collect, store and distribute, how they store that data, and how they can get ahold of the most timely, valuable data in the boardroom to inform their decision-making.

Data, data centers, cloud storage and AI provide the mechanisms for managing data in today's business world. The newest player in the arena is AI. According to the 2019 Gartner CIO Survey, about half of the technology executives said that they planned to employ AI before the end of 2020, which is an increase of 14% from today.

AI requires an investment and it will soon become an operating expense for most companies. Investors are also savvy to the urgency to implement AI technology. A report by NewVantage Partners states that 75% of companies reported they were fearful of disruption from competitors that were more data-driven than they were.

Businesses that move too slowly to implement it could be put out of business by faster-moving competitors. Businesses that move too quickly to implement AI risk taking on systems they don't fully understand and won't be able to use to their fullest capacity. Boards need to ensure that any AI strategies that they employ will benefit shareholders and have a positive impact on long-term competitiveness. Directors need to start moving in the direction of having a basic understanding of AI and its potential for disruption.

Will Businesses Still Need Data Centers?

A data center is a physical facility that businesses use to house their electronic data. It contains critical applications and information and it requires knowledgeable technicians to maintain it so that it's reliable, efficient and secure. In 2005, the American National Standards Institute (ANSI) and Telecommunications Industry Association (TIA) set the standards for data centers. Large enterprises may have more than one data center and they may be housed in different locations.

Data centers also need to have some type of infrastructure to keep the hardware and software running appropriately. Data centers usually have power subsystems, uninterruptible power supplies, ventilation equipment, cooling systems, backup generators, cabling to connect to external network operators and other similar equipment.

Trends for data centers are also evolving. Edge data centers can complement data centers and cloud services. Edge computing decentralizes the cloud and other networks. Decentralization places power closer to the data source. Santhosh Rao, a principal research analyst at Gartner, says that around 10% of data that's generated by companies is created and processed outside a traditional centralized data center or cloud and he predicts the figure will reach 50% by the year 2022.

Gartner also predicts that 50% of data centers will use all-flash solutions in place of spinning discs, which will save substantially on power and cooling costs. Advancements to data centers will be moving to converged technologies and hybrids.

Data in the Boardroom

Board directors spend years developing their expertise, so it seems impractical at best to think that AI and other advanced technologies could possibly replace human beings in the boardroom. One of the things driving AI in the boardroom is that the cost of poor decision-making can be extremely high. Failure rates are high for new product launches, mergers and acquisitions, and attempts at digital transformation. These failings rest squarely on the shoulders of board directors and executives. In a 2015 McKinsey study, researchers discovered that only 16% of board directors were clear on how the dynamics within their industries were changing and how advances in technology would change their businesses in the future.

It's becoming clear that businesses are becoming so complex that they're moving too fast for boards and CEOs to make good decisions without the help of intelligent systems. The solution is to incorporate AI into the practice of strategy and corporate governance.

These advancements call into question whether board seats will soon be replaced by virtual technology. DKV, a venture capital fund in Hong Kong, already put this theory to the test by giving an algorithm the 6th seat on its board of directors. The expertise of the algorithm lies in guiding investment decisions. It's not likely that AI will be able to totally replace board directors, at least not anytime in the near future. Where AI and other advanced technologies can aid board directors is by augmenting board intelligence.

Advanced technology could be implemented in a couple of ways that would significantly enhance the board directors' roles. Technology has the capability of bringing data and analytics to board directors daily so that they're getting updated information in real time rather than via a quarterly or annual report. Board directors could then arrive at board meetings ready for discussion.

Diligent Corporation is helping businesses stay ahead of the technology curve with electronic board books and online agendas with accessible information in real time. The suite of digital tools that comprise Governance Cloud streamline many other aspects of corporate governance with digital solutions. Diligent's Governance Intel software brings that latest industry news and updates directly to each board director, so they can identify market trends, risks and opportunities in the timeliest manner. Governance Intel software is the modern approach to sharing business intelligence via mobile, dashboards, curated newsletters and reports. Users can customize the settings to tailor the sources, volume, frequency and modes of consumptions to maximize their time.

As technology continues to advance, boards will need to consider how they can use technology to help manage data, enhance the use of data centers, and augment their own duties and responsibilities in light of rapid evolution in all of those areas.