The Importance of Board Member Actions for Cybersecurity Governance and Risk Management
Jeffrey G. Proudfoot, W. Alec Cram, Stuart Madnick, Michael Coden
This study investigates the challenges boards of directors face in providing effective cybersecurity oversight. Drawing on in-depth interviews with 35 board members and cybersecurity experts, the paper identifies four core challenges and proposes ten specific actions boards can take to improve their governance and risk management capabilities.
Problem
Corporate boards are increasingly held responsible for cybersecurity governance, yet they are often ill-equipped to handle this complex and rapidly evolving area. This gap between responsibility and expertise creates significant risk for organizations, as boards may struggle to ask the right questions, properly assess risk, and provide meaningful oversight.
Outcome
- The study identified four primary challenges for boards: 1) inconsistent attitudes and governance approaches, 2) ineffective interaction dynamics with executives like the CISO, 3) a lack of sufficient cybersecurity expertise, and 4) navigating expanding and complex regulations. - Boards must acknowledge that cybersecurity is an enterprise-wide operational risk, not just an IT issue, and gauge their organization's cybersecurity maturity against industry peers. - Board members should focus on the business implications of cyber threats rather than technical details and must demand clear, jargon-free communication from executives. - To address expertise gaps, boards should determine their need for expert advisors and actively seek training, such as tabletop cyberattack simulations. - Boards must understand that regulatory compliance does not guarantee sufficient security and should guide the organization to balance compliance with proactive risk mitigation.
Host: Welcome to A.I.S. Insights — powered by Living Knowledge. I’m your host, Anna Ivy Summers, and with me today is our expert analyst, Alex Ian Sutherland. Host: Alex, today we’re diving into a crucial topic for every modern business: cybersecurity at the board level. We're looking at a study titled "The Importance of Board Member Actions for Cybersecurity Governance and Risk Management." Host: In a nutshell, this study explores the huge challenges boards of directors face with cyber oversight and gives them a clear, actionable roadmap to improve. Expert: Exactly, Anna. It’s a critical conversation because the stakes have never been higher. Host: Let’s start there. What is the big, real-world problem this study addresses? Why is board-level cybersecurity such a hot-button issue right now? Expert: The core problem is a massive gap between responsibility and capability. Boards are legally and financially responsible for overseeing cybersecurity, but many directors are simply not equipped for the task. They don't come from tech backgrounds. Expert: The study found this creates significant risk. One board member was quoted saying, "Every board knows that cyber is a threat... How they manage it is still the wild west." Host: The wild west. That’s a powerful image. It suggests a lack of clear rules or understanding. Expert: It's true. Boards often don't know the right questions to ask, how to interpret the technical reports they're given, or how to provide meaningful guidance. This leaves their organizations incredibly vulnerable. Host: So how did the researchers get this inside look at the boardroom? What was their approach? Expert: They went straight to the source. The research is based on in-depth interviews with 35 people on the front lines—current board members, CISOs, CEOs, and other senior executives from a wide range of industries, including finance, healthcare, and technology. Host: So they captured real-world experience, not just theory. What were some of the key challenges they uncovered? Expert: The study pinpointed four primary challenges, but two really stood out. First, inconsistent attitudes and governance approaches. And second, ineffective interaction dynamics between the board and the company's security executives. Host: Let's unpack that. What does an 'inconsistent attitude' look like in practice? Expert: It can be complacency. Some boards see a dashboard report that’s mostly ‘green’ and assume everything is fine, creating a false sense of security. Others might think that because they haven't been hit by a major attack yet, they won't be. It's a dangerous mindset. Host: And what about the 'ineffective interaction' with executives like the Chief Information Security Officer, or CISO? Expert: This is crucial. The study highlights a major communication breakdown. You can have a brilliant CISO who can’t explain risk in simple business terms. They get lost in technical jargon, and the board tunes out. One board member said when that happens, "you get the blank stares and no follow-up questions." Host: That communication gap sounds like the biggest risk of all. So this brings us to the most important question, Alex. Why does this matter for business, and what are the key takeaways for leaders listening right now? Expert: The study provides ten clear actions, which we can group into a few key takeaways. First is a mindset shift. The board must acknowledge that cybersecurity is an enterprise-wide operational risk, not just an IT problem. It belongs in the same category as financial or legal risk. Host: It’s a core business function. What’s next? Expert: Better communication. Boards must demand clarity. They should tell their security leaders, "Don't get into the technical weeds, focus on the business implications." It's not the board's job to pick the technology, but it is their job to understand the strategic risk. Host: So, focus on the 'what' and 'why,' not the 'how'. What about the expertise gap you mentioned earlier? How do boards solve that? Expert: They need a plan to bridge that gap. This doesn't mean every director needs to become a coder. It means deciding if they need to bring in an expert advisor or add a director with a cyber background. And crucially, it means training. Host: What kind of training is most effective? Expert: The study strongly recommends tabletop cyberattack simulations. These are essentially practice drills where the board and executive team walk through a realistic cyber crisis scenario. Host: Like a fire drill for a data breach. Expert: Precisely. It makes the threat real and reveals the weak points in your response plan before you’re in an actual crisis. It moves the plan from paper to practice. Host: And what’s the final key takeaway for our audience? Expert: It’s simple: compliance is not security. Checking off boxes for regulators does not guarantee your organization is protected. Boards must push management to go beyond the minimum requirements and focus on proactive, genuine risk mitigation. Host: That’s a fantastic summary, Alex. So, to recap for our listeners: Boards must own cybersecurity as a core business risk, demand clear, business-focused communication, proactively address their own expertise gaps through training and simulations, and remember that just being compliant isn't enough. Host: Alex Ian Sutherland, thank you so much for breaking down this vital research for us. Expert: My pleasure, Anna. Host: And a big thank you to our audience for tuning in. This has been A.I.S. Insights — powered by Living Knowledge.
Identifying and Filling Gaps in Operational Technology Cybersecurity
Abbatemarco Nico, Hans Brechbühl
This study identifies critical gaps in Operational Technology (OT) cybersecurity by drawing on insights from 36 leaders across 14 global corporations. It analyzes the organizational challenges that hinder the successful implementation of OT cybersecurity, going beyond purely technical issues. The research provides practical recommendations for managers to bridge these security gaps effectively.
Problem
As industrial companies embrace 'Industry 4.0', their operational technology (OT) systems, which control physical processes, are becoming increasingly connected to digital networks. This connectivity introduces significant cybersecurity risks that can halt production and cause substantial financial loss, yet many organizations struggle to implement robust security due to organizational, rather than technical, obstacles.
Outcome
- Cybersecurity in OT projects is often treated as an afterthought, bolted on at the end rather than integrated from the start. - Cybersecurity teams typically lack the authority, budget, and top management support needed to enforce security measures in OT environments. - There is a severe shortage of personnel with expertise in both OT and cybersecurity, and a cultural disconnect exists between IT and OT teams. - Priorities are often misaligned, with OT personnel focusing on uptime and productivity, viewing security measures as hindrances. - The tangible benefits of cybersecurity are difficult to recognize and quantify, making it hard to justify investments until a failure occurs.
Host: Welcome to A.I.S. Insights, powered by Living Knowledge. I’m your host, Anna Ivy Summers. Today, we're digging into a critical issue for any company with physical operations. We're looking at a new study from MIS Quarterly Executive titled "Identifying and Filling Gaps in Operational Technology Cybersecurity". In short, it explores the deep organizational challenges that stop businesses from properly securing the technology that runs their factories and industrial sites. Here to break it down for us is our analyst, Alex Ian Sutherland. Alex, welcome. Expert: Great to be here, Anna. Host: Alex, let's start with the basics. We all hear about IT, or Information Technology. What is OT, Operational Technology, and why is it suddenly such a big concern? Expert: Of course. Think of OT as the technology that controls the physical world. It’s the hardware and software running everything from robotic arms on an assembly line to the control systems in a power plant. Historically, these systems were isolated, completely disconnected from the internet. But now, with Industry 4.0, companies are connecting them to their IT networks to get data and improve efficiency. Host: And connecting them opens the door to cyberattacks. Expert: A very big door. The study highlights that this isn't a theoretical risk. It points to a 100-150% surge in cyberattacks against the manufacturing sector in recent years. And an attack on OT isn't about stealing customer data; it’s about shutting down production. The study found a successful breach can cost a company anywhere from 3 to 7 million dollars per incident and halt operations for an average of four days. Host: That’s a massive business disruption. So how did the researchers in this study get to the root of why this is so hard to solve? Expert: They focused on the people and the organization, not just the tech. They conducted a series of in-depth focus groups with 36 senior leaders—people like Chief Information Officers and Chief Information Security Officers—from 14 major global corporations in manufacturing, energy, and logistics. They wanted to understand the human and structural roadblocks. Host: And what did these leaders say? What are the key findings? Expert: They found a consistent set of organizational gaps. The first is that cybersecurity is often treated as an afterthought. One security leader used the phrase "bolted on afterwards," which perfectly captures the problem. They build a new system and then try to wrap security around it at the end. Host: Why does that happen? Is it a technical oversight? Expert: It’s more of a cultural problem, which is the second major finding. There’s a huge disconnect between the IT cybersecurity teams and the OT plant-floor teams. The OT engineers prioritize uptime and productivity above all else. To them, a security update that requires shutting down a machine, even for an hour, is a direct hit to production value. Host: So the two teams have completely different priorities. Expert: Exactly. One director in the study described a situation where his factory team saw the central security staff as people who were just "reading a policy sheet," without understanding "what's really going on" in the plant. This leads to the third finding: cybersecurity teams in these environments often lack real authority, budget, and support from top management to enforce security rules. Host: I can imagine it's difficult to get budget to prevent a problem that hasn't happened yet. Expert: That's the final key finding. The study participants said the tangible benefits of good cybersecurity are almost invisible. It’s a classic case of "you don't know it's working until it fails." This makes it incredibly hard to justify the investment compared to, say, a new machine that will clearly increase output. Host: This is a complex organizational puzzle. So, for the business leaders listening, what are the practical takeaways? Why does this matter for them, and what can they do? Expert: This is the most important part. The study offers three clear recommendations that I'd frame as key business takeaways. First: you have to bridge the cultural divide. This isn't about IT forcing rules on OT. It’s about creating mutual understanding through cross-training, and even creating new roles for people who can speak both languages—technology and operations. The goal should be "Security by Design," baked in from the start. Host: So, build bridges, not walls. What's the second takeaway? Expert: Empower your security leadership. A Chief Information Security Officer, or CISO, needs real authority that extends to the factory floor, with the budget and C-suite backing to make critical decisions. One executive in the study recounted how it took a cyberattack simulation that showed the board how an incident could "bring us to our knees" to finally get the necessary support and funding. Host: It sounds like leadership needs to feel the risk to truly act on it. What’s the final piece of advice? Expert: Find the win-win. Don't frame cybersecurity as just a cost or a blocker. The study found that collaboration can lead to unexpected benefits. For instance, one company installed security monitoring tools, which had the side effect of giving the engineering team incredible new visibility into their own processes, which they then used to optimize the entire factory. Security actually became a business enabler. Host: That’s a powerful shift in perspective. To summarize, then: the growing risk to our industrial systems is fundamentally an organizational problem, not a technical one. The solution involves bridging the cultural gap between operations and security teams, empowering security leaders with real authority, and actively looking for ways that good security can also drive business value. Alex, this has been incredibly insightful. Thank you for joining us. Expert: My pleasure, Anna. Host: And thank you to our listeners for tuning into A.I.S. Insights. Join us next time as we continue to explore the ideas shaping business and technology.
Operational Technology, OT Cybersecurity, Industry 4.0, Cybersecurity Gaps, Risk Management, Industrial Control Systems, Technochange
MIS Quarterly Executive (2024)
How to Design a Better Cybersecurity Readiness Program
This study explores the common pitfalls of four types of cybersecurity training by interviewing employees at large accounting firms. It identifies four unintended negative consequences of mistraining and overtraining and, in response, proposes the LEAN model, a new framework for designing more effective cybersecurity readiness programs.
Problem
Organizations invest heavily in cybersecurity readiness programs, but these initiatives often fail due to poor design, leading to mistraining and overtraining. This not only makes the training ineffective but can also create adverse effects like employee anxiety and fatigue, paradoxically amplifying an organization's cyber vulnerabilities instead of reducing them.
Outcome
- Conventional cybersecurity training often leads to four adverse effects on employees: threat anxiety, security fatigue, risk passivity, and cyber hesitancy. - These individual effects cause significant organizational problems, including erosion of individual performance, fragmentation of team dynamics, disruption of client experiences, and stagnation of the security culture. - The study proposes the LEAN model to counteract these issues, based on four strategies: Localize, Empower, Activate, and Normalize. - The LEAN model recommends tailoring training to specific roles (Localize), fostering ownership and authority (Empower), promoting coordinated action through collaborative exercises (Activate), and embedding security into daily operations to build a proactive culture (Normalize).
Host: Welcome to A.I.S. Insights, the podcast where we connect Living Knowledge with business innovation. I'm your host, Anna Ivy Summers. Host: Today, we're diving into a fascinating new study called "How to Design a Better Cybersecurity Readiness Program." With me is our analyst, Alex Ian Sutherland. Alex, welcome. Expert: Great to be here, Anna. Host: This study explores the common pitfalls of cybersecurity training, looking at what happens when we mistrain or overtrain employees. More importantly, it proposes a new framework for getting it right. Host: So, Alex, let's start with the big picture. Companies are pouring billions into cybersecurity training. What's the problem this study identified? Expert: The problem is that much of that investment is wasted. The study shows that poorly designed training doesn't just fail to work; it can actually make things worse. Host: Worse? How so? Expert: Instead of reducing risk, it can create what the study calls adverse effects, like extreme anxiety about security, or a kind of burnout called security fatigue. Paradoxically, this can amplify an organization's vulnerabilities. Host: So our attempts to build a human firewall are actually creating cracks in it. How did the researchers uncover this? What was their approach? Expert: They went straight to the source. They conducted in-depth interviews with 23 employees at the four major U.S. accounting firms—organizations that are on the front lines of handling sensitive client data. Host: And what were the key findings from those interviews? What are these negative side effects you mentioned? Expert: The study identified four main consequences. The first is Threat Anxiety, where employees become so hyper-aware and fearful of making a mistake that their productivity drops. They second-guess every email they open. Host: I can imagine that. What's next? Expert: Second is Security Fatigue. This is cognitive burnout from constant alerts, repetitive training, and complex rules. Employees get overwhelmed and simply tune out, which is incredibly dangerous. Host: It sounds like alarm fatigue for the inbox. Expert: Exactly. The third is Risk Passivity, which is a paradoxical outcome. Some employees become so desensitized by constant warnings they start ignoring real threats. Others become paralyzed by the perceived risk of every action. Host: And the last one? Expert: The fourth is Cyber Hesitancy. This is a reluctance to use new tools or even collaborate with colleagues for fear of blame. It creates a culture of suspicion, not security. The study found this fragments team dynamics and stalls innovation. Host: These sound like serious cultural issues, not just IT problems. This brings us to the most important question for our listeners: Why does this matter for business, and what's the solution? Expert: It matters because the old approach is broken. The study proposes a new framework to fix it, called the LEAN model. It's an acronym for four key strategies. Host: Okay, break it down for us. What does LEAN stand for? Expert: The 'L' is for Localize. It means stop the one-size-fits-all training. Tailor the content to an employee's specific role. What an accountant needs to know is different from someone in marketing. Host: That makes sense. What about 'E'? Expert: 'E' is for Empower. This is about fostering ownership. Instead of just pushing rules, involve employees in creating and improving security protocols. This gives them a real stake in the outcome. Host: From passive recipient to active participant. I like it. What's 'A'? Expert: 'A' is for Activate. This means moving beyond solo quizzes to collaborative, team-based exercises. Let teams practice responding to a simulated threat together, fostering coordinated action and mastery. Host: And finally, 'N'? Expert: 'N' is for Normalize. This is the goal: embed security so deeply into daily operations that it becomes a natural part of the workflow, not a separate, dreaded task. It reframes security as a business enabler, not a barrier. Host: So, to summarize, it seems the core message is that our cybersecurity training is often counterproductive, creating negative effects like fatigue and anxiety. Host: The solution is a more human-focused, LEAN approach: Localize the training, Empower employees to take ownership, Activate teamwork through practice, and Normalize security into the company culture. Host: Alex, thank you for breaking that down for us. It’s a powerful new way to think about security. Expert: My pleasure, Anna. Host: And thank you to our listeners for tuning into A.I.S. Insights — powered by Living Knowledge. Join us next time as we explore the latest research impacting your business.
How Large Companies Can Help Small and Medium-Sized Enterprise (SME) Suppliers Strengthen Cybersecurity
Jillian K. Kwong, Keri Pearlson
This study investigates the cybersecurity challenges faced by small and medium-sized enterprise (SME) suppliers and proposes actionable strategies for large companies to help them improve. Based on interviews with executives and cybersecurity experts, the paper identifies key barriers SMEs encounter and outlines five practical actions large firms can take to strengthen their supply chain's cyber resilience.
Problem
Large companies increasingly require their smaller suppliers to meet the same stringent cybersecurity standards they do, creating a significant burden for SMEs with limited resources. This gap creates a major security vulnerability, as attackers often target less-secure SMEs as a backdoor to access the networks of larger corporations, posing a substantial third-party risk to entire supply chains.
Outcome
- SME suppliers are often unable to meet the security standards of their large partners due to four key barriers: unfriendly regulations, organizational culture clashes, variability in cybersecurity frameworks, and misalignment of business processes. - Large companies can proactively strengthen their supply chain by providing SMEs with the resources and expertise needed to understand and comply with regulations. - Creating incentives for meeting security benchmarks is more effective than penalizing suppliers for non-compliance. - Large firms should develop programs to help SMEs elevate their cybersecurity culture and align security processes with their own. - Coordinating with other large companies to standardize cybersecurity frameworks and assessment procedures can significantly reduce the compliance burden on SMEs.
Host: Welcome to A.I.S. Insights — powered by Living Knowledge. I’m your host, Anna Ivy Summers. In today's interconnected world, your company’s security is only as strong as its weakest link. And often, that link is a small or medium-sized supplier.
Host: With me today is our analyst, Alex Ian Sutherland, to discuss a recent study titled, "How Large Companies Can Help Small and Medium-Sized Enterprise Suppliers Strengthen Cybersecurity." Alex, welcome.
Expert: Thanks for having me, Anna. This is a critical topic. The study investigates the cybersecurity challenges smaller suppliers face and, more importantly, proposes actionable strategies for large companies to help them improve.
Host: So let's start with the big problem here. Why is the gap in cybersecurity between large companies and their smaller suppliers such a major risk?
Expert: It’s a massive vulnerability. Large companies demand their smaller suppliers meet the same stringent security standards they do. But for an SME with limited staff and budget, that's often an impossible task. Attackers know this. They specifically target less-secure suppliers as a backdoor into the networks of their bigger clients.
Host: Can you give us a real-world example of that?
Expert: Absolutely. The study reminds us of the infamous 2013 data breach at Target. The hackers didn't attack Target directly at first. They got in using credentials stolen from a small, third-party HVAC vendor. That single point of entry ultimately exposed the data of over 100 million customers. It’s a classic case of the supply chain being the path of least resistance.
Host: A sobering reminder. So how did the researchers in this study approach such a complex issue?
Expert: They went straight to the source. The study is based on 27 in-depth interviews with executives, cybersecurity leaders, and supply chain managers from both large corporations and small suppliers. They gathered insights from people on the front lines who deal with these challenges every single day.
Host: And what were the biggest takeaways from those conversations? What did they find are the main barriers for these smaller companies?
Expert: The study identified four key barriers. The first is what they call "unfriendly regulation." Most cybersecurity rules are designed for big companies with legal and compliance departments. SMEs often lack the expertise to even understand them.
Host: So the rules themselves are a hurdle. What’s the second barrier?
Expert: Organizational culture clashes. For an SME, the primary focus is keeping the business running and getting products out the door. Cybersecurity can feel like a costly, time-consuming distraction, so it constantly gets pushed to the back burner.
Host: That makes sense. And the other two barriers?
Expert: Framework variability and process misalignment. Imagine being a small supplier for five different large companies, and each one asks you to comply with a slightly different security framework. One interviewee described it as "trying to navigate a sea of frameworks in a rowboat, without a map or radio." It creates a huge, confusing compliance burden.
Host: That's a powerful image. It really frames this as a partnership problem, not just a technology problem. So this brings us to the most important question for our listeners: what can businesses actually *do* about it?
Expert: This is the core of the study. It moves beyond just identifying problems to proposing five concrete actions large companies can take. First, provide your SME suppliers with the resources and expertise they lack. This could be workshops, access to your legal teams, or clear guidance on how to comply with regulations.
Host: So it's about helping, not just demanding. What’s the next action?
Expert: Create positive incentives. The study found that punishing suppliers for non-compliance is far less effective than rewarding them for meeting security benchmarks. One CTO put it perfectly: suppliers need to be rewarded for their security efforts, not just punished for failure. This changes the dynamic from a chore to a shared goal.
Host: I like that reframing. What else?
Expert: The third and fourth actions are linked. Large firms should develop programs to help SMEs elevate their security culture. And, crucially, they should coordinate with other large companies to standardize security frameworks and assessments. If competitors can agree on one common questionnaire, it saves every SME countless hours of redundant work.
Host: That seems like such a common-sense solution. What's the final recommendation?
Expert: Bring cybersecurity into the procurement process from the very beginning. Too often, security is an afterthought, brought in after a deal is already signed. This leads to delays and friction. By discussing security expectations upfront, you ensure it's a foundational part of the partnership.
Host: So, to summarize, this isn't about forcing smaller suppliers to fend for themselves. It’s about large companies taking proactive steps: providing resources, offering incentives, standardizing requirements, and making security a day-one conversation.
Expert: Exactly. The study’s main message is that strengthening your supply chain's cybersecurity is an act of partnership. When you help your suppliers become more secure, you are directly helping yourself.
Host: A powerful and practical takeaway. Alex, thank you for breaking this down for us.
Expert: My pleasure, Anna.
Host: And thanks to our audience for tuning in to A.I.S. Insights. Join us next time as we continue to explore the intersection of business, technology, and living knowledge.
Cybersecurity, Supply Chain Management, Third-Party Risk, Small and Medium-Sized Enterprises (SMEs), Cyber Resilience, Vendor Risk Management
MIS Quarterly Executive (2023)
How Boards of Directors Govern Artificial Intelligence
Benjamin van Giffen, Helmuth Ludwig
This study investigates how corporate boards of directors oversee and integrate Artificial Intelligence (AI) into their governance practices. Based on in-depth interviews with high-profile board members from diverse industries, the research identifies common challenges and provides examples of effective strategies for board-level AI governance.
Problem
Despite the transformative impact of AI on the business landscape, the majority of corporate boards struggle to understand its implications and their role in governing it. This creates a significant gap, as boards have a fiduciary responsibility to oversee strategy, risk, and investment related to critical technologies, yet AI is often not a mainstream boardroom topic.
Outcome
- Identified four key groups of board-level AI governance issues: Strategy and Firm Competitiveness, Capital Allocation, AI Risks, and Technology Competence. - Boards should ensure AI is integrated into the company's core business strategy by evaluating its impact on the competitive landscape and making it a key topic in annual strategy meetings. - Effective capital allocation involves encouraging AI experimentation, securing investments in foundational AI capabilities, and strategically considering external partnerships and acquisitions. - To manage risks, boards must engage with experts, integrate AI-specific risks into Enterprise Risk Management (ERM) frameworks, and address ethical, reputational, and legal challenges. - Enhancing technology competence requires boards to develop their own AI literacy, review board and committee composition for relevant expertise, and include AI competency in executive succession planning.
Host: Welcome to A.I.S. Insights, powered by Living Knowledge. I’m your host, Anna Ivy Summers. Today, we're diving into a critical topic for every company leader: governance. Specifically, we're looking at a fascinating new study titled "How Boards of Directors Govern Artificial Intelligence."
Host: It investigates how corporate boards oversee and integrate AI into their governance practices, based on interviews with high-profile board members. Here to break it all down for us is our analyst, Alex Ian Sutherland. Alex, welcome.
Expert: Thanks for having me, Anna.
Host: Let's start with the big picture. We hear a lot about AI's potential, but what's the real-world problem this study is trying to solve for boards?
Expert: The problem is a major governance gap. The study points out that while AI is completely reshaping the business landscape, most corporate boards are struggling to understand it. They have a fiduciary duty to oversee strategy, risk, and major investments, but AI often isn't even a mainstream topic in the boardroom.
Host: So, management might be racing ahead with AI, but the board, the ultimate oversight body, is being left behind?
Expert: Exactly. And that's risky. AI requires huge, often uncertain, capital investments. It also introduces entirely new legal, ethical, and reputational risks that many boards are simply not equipped to handle. This gap between the technology's impact and the board's understanding is what the study addresses.
Host: How did the researchers get inside the boardroom to understand this dynamic? What was their approach?
Expert: They went straight to the source. The research is based on a series of in-depth, confidential interviews with sixteen high-profile board members from a huge range of industries—from tech and finance to healthcare and manufacturing. They also spoke with executive search firms to understand what companies are looking for in new directors.
Host: So, based on those conversations, what were the key findings? What are the big themes boards need to be thinking about?
Expert: The study organized the challenges into four key groups. The first is Strategy and Firm Competitiveness. Boards need to ensure AI is actually integrated into the company’s core strategy, not just a flashy side project.
Host: Meaning they should be asking how AI will help the company win in the market?
Expert: Precisely. The second is Capital Allocation. This is about more than just signing checks. It's about encouraging experimentation—what the study calls ‘lighthouse projects’—and making strategic investments in foundational capabilities, like data platforms, that will pay off in the long run.
Host: That makes sense. What's the third group?
Expert: AI Risks. This is a big one. We're not just talking about a system crashing. Boards need to oversee ethical risks, like algorithmic bias, and major reputational and legal risks. The recommendation is to integrate these new AI-specific risks directly into the company’s existing Enterprise Risk Management framework.
Host: And the final one?
Expert: It's called Technology Competence. And this is crucial—it applies to the board itself.
Host: Does that mean every board director needs to become a data scientist?
Expert: Not at all. It’s about developing AI literacy—understanding the business implications. The study found that leading boards are actively reviewing their composition to ensure they have relevant expertise and, importantly, they're including AI competency in CEO and executive succession planning.
Host: That brings us to the most important question, Alex. For the business leaders and board members listening, why does this matter? What is the key takeaway they can apply tomorrow?
Expert: The most powerful and immediate thing a board can do is start asking the right questions. The board's role isn't necessarily to have all the answers, but to guide the conversation and ensure management is thinking through the critical issues.
Host: Can you give us an example of a question a director should be asking?
Expert: Certainly. For strategy, they could ask: "How are our competitors using AI, and how does our approach give us a competitive advantage?" On risk, they might ask: "What is our framework for evaluating the ethical risks of a new AI system before it's deployed?" These questions signal the board's priorities and drive accountability.
Host: So, the first step is simply opening the dialogue.
Expert: Yes. That's the catalyst. The study makes it clear that in many companies, if the board doesn't start the conversation on AI governance, no one will.
Host: A powerful call to action. To summarize: this study shows that boards have a critical and urgent role in governing AI. They need to focus on four key areas: weaving AI into strategy, allocating capital wisely, managing new and complex risks, and building their own technological competence.
Host: And the journey begins with asking the right questions. Alex Ian Sutherland, thank you for these fantastic insights.
Expert: My pleasure, Anna.
Host: And thank you to our audience for tuning into A.I.S. Insights. Join us next time as we continue to explore the ideas shaping business and technology.
AI governance, board of directors, corporate governance, artificial intelligence, strategic management, risk management, technology competence
MIS Quarterly Executive (2024)
Experiences and Lessons Learned at a Small and Medium-Sized Enterprise (SME) Following Two Ransomware Attacks
Donald Wynn, Jr., W. David Salisbury, Mark Winemiller
This paper presents a case study of a small U.S. manufacturing company that suffered two distinct ransomware attacks four years apart, despite strengthening its cybersecurity after the first incident. The study analyzes both attacks, the company's response, and the lessons learned from the experiences. The goal is to provide actionable recommendations to help other small and medium-sized enterprises (SMEs) improve their defenses and recovery strategies against evolving cyber threats.
Problem
Small and medium-sized enterprises (SMEs) face unique cybersecurity challenges due to significant resource constraints compared to larger corporations. They often lack the financial capacity, specialized expertise, and trained workforce to implement and maintain adequate technical and procedural controls. This vulnerability is increasingly exploited by cybercriminals, with a high percentage of ransomware attacks specifically targeting these smaller, less-defended businesses.
Outcome
- All businesses are targets: The belief in 'security by obscurity' is a dangerous misconception; any online presence makes a business a potential target for cyberattacks. - Comprehensive backups are essential: Backups must include not only data but also system configurations and software to enable a full and timely recovery. - Management buy-in is critical: Senior leadership must understand the importance of cybersecurity and provide the necessary funding and organizational support for robust defense measures. - People are a key vulnerability: Technical defenses can be bypassed by human error, as demonstrated by the second attack which originated from a phishing email, underscoring the need for continuous employee training. - Cybercrime is an evolving 'arms race': Attackers are becoming increasingly sophisticated, professional, and organized, requiring businesses to continually adapt and strengthen their defenses.
Host: Welcome to A.I.S. Insights — powered by Living Knowledge. I'm your host, Anna Ivy Summers. Today we're diving into a story that serves as a powerful warning for any business operating online. We're looking at a study titled, "Experiences and Lessons Learned at a Small and Medium-Sized Enterprise (SME) Following Two Ransomware Attacks".
Host: With me is our analyst, Alex Ian Sutherland. Alex, this study follows a small U.S. manufacturing company that was hit by ransomware not once, but twice, despite strengthening its security after the first incident. It’s a real-world look at how businesses can defend and recover from these evolving threats.
Expert: It is, Anna. And it's a critical topic.
Host: So, let's start with the big problem. We often hear about massive corporations getting hacked. Why does this study focus on smaller businesses?
Expert: Because they are the primary target. SMEs face unique challenges due to resource constraints. They often lack the financial capacity or specialized staff to build robust cyber defenses. The study points out that a huge percentage of ransomware attacks—over 80% in some reports—are aimed specifically at these smaller, less-defended companies. Cybercriminals see them as easy targets.
Host: To explore this, what approach did the researchers take?
Expert: They conducted an in-depth case study of one company. By focusing on this single manufacturing firm, they could analyze the two attacks in detail—one in 2017 and a second, more advanced attack in 2021. They documented the company's response, the financial and operational impact, and the critical lessons learned from both experiences.
Host: Getting hit twice provides a unique perspective. What was the first major finding from this?
Expert: The first and most fundamental finding was that all businesses are targets. Before the 2017 attack, the company’s management believed in 'security by obscurity'—they thought they were too small and not in a high-value industry like finance to be of interest. That was a costly mistake.
Host: A wake-up call, for sure. After that first attack, they tried to recover. What did they learn from that process?
Expert: They learned that comprehensive backups are absolutely essential. They had backups of their data, but not their system configurations or software. This meant recovery was a slow, painful process of rebuilding servers from scratch, leading to almost two weeks of downtime for critical systems.
Host: That kind of downtime could kill a small business. You mentioned management's mindset was a problem initially. Did that change?
Expert: It changed overnight. The third finding is that management buy-in is critical. The IT director had struggled to get funding for security before the attack. Afterwards, the threat became real. He was promoted to Vice President, and the study quotes him saying, “Finding cybersecurity dollars was no longer difficult.”
Host: So with new funding and better technology, they were prepared. But they still got hit a second time. How did that happen?
Expert: This highlights the fourth key finding: people are a key vulnerability. The second, more sophisticated attack in 2021 didn't break through a firewall; it walked in the front door through a phishing email that a single employee clicked. It proved that technology alone isn't enough.
Host: It's a classic problem. And what did that second attack reveal about the attackers themselves?
Expert: It showed that cybercrime is an evolving 'arms race'. The first attack was relatively crude. The second was from a highly professional ransomware group called REvil, which operates like a criminal franchise. They used a 'double extortion' tactic—not just encrypting the company's data, but also stealing it and threatening to release sensitive HR files publicly.
Host: That's terrifying. So, Alex, this is the most important question for our listeners. What are the practical takeaways? Why does this matter for their business?
Expert: There are four key actions every business leader should take. First, accept that you are a target, no matter your size or industry. Budget for cybersecurity proactively, don't wait for a disaster.
Expert: Second, ensure your backups are truly comprehensive and test your disaster recovery plan. You need to be able to restore entire systems, not just data, and you need to know that it actually works.
Expert: Third, invest in your people. Continuous security awareness training is not optional; it’s one of your most effective defenses against threats like phishing that target human error.
Expert: And finally, build relationships with external experts *before* you need them. For the second attack, the company had an incident response firm on retainer. Having experts to call immediately made a massive difference. You don’t want to be looking for help in the middle of a crisis.
Host: Powerful advice. To summarize: assume you're a target, build and test a full recovery plan, train your team relentlessly, and have experts on speed dial. This isn't just a technology problem; it's a business continuity problem.
Host: Alex Ian Sutherland, thank you for sharing these critical insights with us.
Expert: My pleasure, Anna.
Host: And thank you for tuning into A.I.S. Insights, powered by Living Knowledge. Join us next time as we translate academic research into actionable business strategy.
ransomware, cybersecurity, SME, case study, incident response, cyber attack, information security
MIS Quarterly Executive (2023)
Evolution of the Metaverse
Mary Lacity, Jeffrey K. Mullins, Le Kuai
This paper explores the potential opportunities and risks of the emerging metaverse for business and society through an interview format with leading researchers. The study analyzes the current state of metaverse technologies, their potential business applications, and critical considerations for governance and ethical implementation for IT practitioners.
Problem
Following renewed corporate interest and massive investment, the concept of the metaverse has generated significant hype, but businesses lack clarity on its definition, tangible value, and long-term impact. This creates uncertainty for leaders about how to approach the technology, differentiate it from past virtual worlds, and navigate the significant risks of surveillance, data privacy, and governance.
Outcome
- The business value of the metaverse centers on providing richer, safer experiences for customers and employees, reducing costs, and meeting organizational goals through applications like immersive training, virtual collaboration, and digital twins. - Companies face a critical choice between centralized 'Web 2' platforms, which monetize user data, and decentralized 'Web 3' models that offer users more control over their digital assets and identity. - The metaverse can improve employee onboarding, training for dangerous tasks, and collaboration, offering a greater sense of presence than traditional videoconferencing. - Key challenges include the lack of a single, interoperable metaverse (which is likely over a decade away), limited current capabilities of decentralized platforms, and the potential for negative consequences like addiction and surveillance. - Businesses are encouraged to explore potential use cases, participate in creating open standards, and consider both the immense promise and potential perils before making significant investments.
Host: Welcome to A.I.S. Insights, the podcast where we connect business leaders with the latest in academic research. I’m your host, Anna Ivy Summers. Host: Today, we’re diving into a topic surrounded by enormous hype and investment: the metaverse. We’ll be exploring a fascinating new study titled “Evolution of the Metaverse.” Host: This study analyzes the current state of metaverse technologies, their potential business applications, and the critical ethical considerations for IT practitioners. To help us unpack it all, we have our expert analyst, Alex Ian Sutherland. Welcome, Alex. Expert: Great to be here, Anna. Host: Alex, the term 'metaverse' is everywhere, and companies are pouring billions into it. But for many business leaders, it's still a very fuzzy concept. What’s the core problem this study addresses? Expert: You've hit on it exactly. There’s a huge gap between the hype and the reality. Business leaders are struggling with a lack of clarity. They’re asking: What is the metaverse, really? How is it different from the virtual worlds of the past, like Second Life? And most importantly, what is its tangible value? Expert: This uncertainty creates real risk. Without a clear framework, it’s hard to know how to invest, or how to navigate the significant dangers the study points out, like intense user surveillance and data privacy issues. One of the researchers even described the worst-case scenario as "surveillance capitalism on steroids." Host: That’s a powerful warning. So how did the researchers approach such a broad and complex topic? Expert: Instead of a traditional lab experiment, this study is structured as a deep conversation with a team of leading academics who have been researching this space for years. They synthesized their different perspectives—from optimistic to cautious—to create a balanced view of the opportunities, risks, and the future trajectory of these technologies. Host: That’s a great approach for a topic that’s still evolving. Let's get into what they found. What did the study identify as the real business value of the metaverse today? Expert: The value isn't in some far-off sci-fi future; it's in practical applications that provide richer, safer experiences. Think of things like creating a 'digital twin' of a factory. The study mentions an auto manufacturer that did this to plan a model changeover virtually, saving massive costs by not having to shut down the physical assembly line for trial and error. Host: So it's about simulation and planning. What about for employees? Expert: Absolutely. The study highlights immersive training as a key benefit. For example, Accenture onboarded 150,000 new employees in a virtual world, creating a stronger sense of presence and connection than a standard video call. It’s also invaluable for training on dangerous tasks, like handling hazardous materials, where mistakes in a virtual setting have no real-world consequences. Host: The study also mentions a critical choice companies are facing between two different models for the metaverse. Can you break that down for us? Expert: Yes, and this is crucial. The choice is between a centralized 'Web 2' model and a decentralized 'Web 3' model. The Web 2 version, led by companies like Meta, is a closed ecosystem. The platform owner controls everything and typically monetizes user data. Expert: The Web 3 model, built on technologies like blockchain, is about user ownership. In this version, users would control their own digital identity and assets, and could move them between different virtual worlds. The challenge, as the study notes, is that these Web 3 platforms are far less developed right now. Host: Which brings us to the big question for business leaders listening: what does this all mean for them? What are the key takeaways? Expert: The first takeaway is to start exploring, but with a clear purpose. Don't build a metaverse presence just for the sake of it. Instead, identify a specific business problem that could be solved with immersive technology, like improving employee safety or reducing prototyping costs. Host: So, focus on practical use cases, not just marketing. Expert: Exactly. Second, businesses should consider participating in the creation of open standards. The study suggests that a single, interoperable metaverse is likely more than a decade away. Getting involved now gives companies a voice in shaping the future and ensuring it isn't dominated by just one or two tech giants. Expert: And finally, leaders must weigh the promise against the perils. They need to understand the governance model they’re buying into. For internal training, a centralized platform—what the study calls an "intraverse"—might be perfectly fine. But for customer-facing applications, the questions of data ownership and privacy become paramount. Host: This has been incredibly insightful, Alex. It seems the message is to approach the metaverse not as a single, flashy destination, but as a set of powerful tools that require careful, strategic implementation. Host: To summarize for our listeners: the business value of the metaverse is in specific, practical applications like immersive training and digital twins. Leaders face a critical choice between closed, company-controlled platforms and open, user-centric models. The best path forward is to explore potential use cases cautiously and participate in building an open future. Host: Alex Ian Sutherland, thank you so much for breaking down this complex topic for us. Expert: My pleasure, Anna. Host: And a big thank you to our audience for tuning in to A.I.S. Insights. We’ll see you next time.
Metaverse, Virtual Worlds, Augmented Reality, Web 3.0, Digital Twin, Business Strategy, Governance
MIS Quarterly Executive (2024)
Adopt Agile Cybersecurity Policymaking to Counter Emerging Digital Risks
This study investigates the need for flexibility and speed in creating and updating cybersecurity rules within organizations. Through in-depth interviews with cybersecurity professionals, the research identifies key areas of digital risk and provides practical recommendations for businesses to develop more agile and adaptive security policies.
Problem
In the face of rapidly evolving cyber threats, many organizations rely on static, outdated cybersecurity policies that are only updated after a security breach occurs. This reactive approach leaves them vulnerable to new attack methods, risks from new technologies, and threats from business partners, creating a significant security gap.
Outcome
- Update cybersecurity policies to address risks from outdated legacy systems by implementing modern digital asset and vulnerability management. - Adapt policies to address emerging technologies like AI by enhancing technology scouting and establishing a resilient cyber risk management framework. - Strengthen policies for third-party vendors by conducting agile risk assessments and regularly reviewing security controls in contracts. - Build flexible policies for disruptive external events (like pandemics or geopolitical tensions) through continuous employee training and robust business continuity plans.
Host: Welcome to A.I.S. Insights, powered by Living Knowledge. I’m your host, Anna Ivy Summers. Today, we're diving into a study that tackles a critical issue for every modern business: cybersecurity. The study is titled, "Adopt Agile Cybersecurity Policymaking to Counter Emerging Digital Risks".
Host: It explores the urgent need for more speed and flexibility in how organizations create and update their security rules. We’re joined by our expert analyst, Alex Ian Sutherland, to break it down for us. Alex, welcome.
Expert: Thanks for having me, Anna.
Host: Let's start with the big picture. Why is this topic so important right now? What's the problem this study is addressing?
Expert: The core problem is that many businesses are trying to fight tomorrow's cyber threats with yesterday's rulebook. They often rely on static, outdated cybersecurity policies.
Host: What do you mean by static?
Expert: It means the policies are written once and then left on a shelf. They’re often only updated after the company suffers a major security breach. This reactive approach leaves them completely exposed to new attack methods, risks from new technology like AI, and even threats coming from their own business partners. It creates a massive security gap.
Host: So businesses are always one step behind. How did the researchers investigate this? What was their approach?
Expert: They went directly to the front lines. The study is based on in-depth interviews with nine senior cybersecurity leaders—people like Chief Information Security Officers and CTOs from a range of industries, including finance, technology, and telecommunications. They wanted to understand the real-world pressures and challenges these leaders face in keeping their policies effective.
Host: And what were the key findings? What are the biggest risks that demand this new, agile approach?
Expert: The study pinpointed four primary risk areas. The first is internal: outdated legacy systems. These are old software or hardware that are critical to the business but can't be easily updated to defend against modern threats.
Host: And the other three?
Expert: The other three are external. The second is the rapid pace of emerging technologies. For instance, one expert described how hackers can now use AI to clone a manager’s voice, call an employee, and trick them into revealing a password. An old policy manual won't have a procedure for that.
Host: That's terrifying. What's the third risk area?
Expert: Attacks via third parties, which is a huge one. Hackers don't attack you directly; they attack your software supplier or a contractor who has access to your systems. This is often called a supply chain attack.
Host: And the final one?
Expert: The fourth risk is disruptive external events. Think about the COVID-19 pandemic. Suddenly, everyone had to work from home, often on personal devices connecting to the company network. This required a massive, immediate change in security policy that most organizations were not prepared for.
Host: That really puts it into perspective. So, Alex, this brings us to the most important question for our listeners: why does this matter for their business, and what can they do about it?
Expert: This is the critical takeaway. The study provides a clear roadmap. It’s about shifting from a passive, 'set-it-and-forget-it' mentality to an active, continuous cycle of security improvement.
Host: Can you give us some concrete actions?
Expert: Certainly. For legacy systems, the study recommends implementing modern digital asset management. You must know what systems you have, what data they hold, and how vulnerable they are. For emerging tech like AI, it’s about proactive 'technology scouting' to anticipate new threats and having a resilient risk management framework to assess them quickly.
Host: What about those third-party risks?
Expert: Here, the study emphasizes strengthening vendor risk management. One interviewee told a story about their company losing its entire code base because a password manager they used was hacked. The lesson was clear: you need to conduct agile risk assessments of your suppliers and build clear security controls directly into your contracts. Don't just trust; verify.
Host: And for preparing for those big, disruptive events?
Expert: It comes down to two things: continuous employee training and robust business continuity plans that are tested regularly. When a crisis hits, your people need to know the procedures, and your policies need to be flexible enough to adapt without compromising security.
Host: This has been incredibly insightful. So, to sum it up, the old way of writing a security policy once every few years is no longer enough. Businesses need to treat cybersecurity policy as a living document.
Expert: Exactly. It needs to be agile and adaptive, constantly evolving to meet new threats head-on.
Host: That’s a powerful message for every leader. Alex Ian Sutherland, thank you so much for breaking down this crucial study for us.
Expert: My pleasure, Anna.
Host: And thank you to our audience for tuning into A.I.S. Insights, powered by Living Knowledge. Join us next time as we translate another key piece of research into actionable business intelligence.
agile cybersecurity, cybersecurity policymaking, digital risk, adaptive security, risk management, third-party risk, legacy systems
MIS Quarterly Executive (2025)
Promoting Cybersecurity Information Sharing Across the Extended Value Chain
Olga Biedova, Lakshmi Goel, Justin Zhang, Steven A. Williamson, Blake Ives
This study analyzes an alternative cybersecurity information-sharing forum centered on the extended value chain of a single company in the forest and paper products industry. The paper explores the forum's design, execution, and challenges to provide recommendations for similar company-specific collaborations. The goal is to enhance cybersecurity resilience across interconnected business partners by fostering a more trusting and relevant environment for sharing best practices.
Problem
As cyberthreats become more complex, industries with interconnected information and operational technologies (IT/OT) face significant vulnerabilities. Despite government and industry calls for greater collaboration, inter-organizational cybersecurity information sharing remains sporadic due to concerns over confidentiality, competitiveness, and lack of trust. Standard sector-based sharing initiatives can also be too broad to address the specific needs of a company and its unique value chain partners.
Outcome
- A company-led, value-chain-specific cybersecurity forum is an effective alternative to broader industry groups, fostering greater trust and more relevant discussions among business partners. - Key success factors for such a forum include inviting the right participants (security strategy leaders), establishing clear ground rules to encourage open dialogue, and using external facilitators to ensure neutrality. - The forum successfully shifted the culture from one of distrust to one of transparency and collaboration, leading participants to be more open about sharing experiences, including previous security breaches. - Participants gained valuable insights into the security maturity of their partners, leading to tangible improvements in cybersecurity practices, such as updating security playbooks, adopting new risk metrics, and enhancing third-party risk management. - The collaborative model strengthens the entire value chain, as companies learn from each other's strategies, tools, and policies to collectively improve their defense against common threats.
Host: Welcome to A.I.S. Insights, powered by Living Knowledge, where we translate complex research into actionable business strategy. I’m your host, Anna Ivy Summers.
Host: Today, we’re talking about a challenge that keeps leaders up at night: cybersecurity. We’ll be discussing a fascinating study titled "Promoting Cybersecurity Information Sharing Across the Extended Value Chain."
Host: It explores a new model for cybersecurity collaboration, one centered not on an entire industry, but on the specific value chain of a single company, aiming to build a more trusting and effective defense against cyber threats.
Host: And to help us unpack this is our analyst, Alex Ian Sutherland. Welcome, Alex.
Expert: Great to be here, Anna.
Host: Alex, we all know cybersecurity is important, but collaboration between companies has always been tricky. What’s the big problem this study is trying to solve?
Expert: The core problem is trust. As cyber threats get more complex, especially in industries that blend physical machinery with digital networks, the risks are huge. Think of manufacturing or logistics.
Expert: Government and industry groups have called for companies to share threat information, but it rarely happens. Businesses are worried about confidentiality, losing a competitive edge, or legal repercussions if they admit to a vulnerability or a breach.
Host: So everyone is guarding their own castle, even though the attackers are collaborating and sharing information freely.
Expert: Exactly. And the study points out that even when companies join traditional sector-wide sharing groups, the information can be too broad to be useful. The threats facing a specific paper company and its logistics partner are very different from the threats facing an automotive manufacturer in the same general group.
Host: So this study looked at a different model. How did the researchers approach this?
Expert: They facilitated and analyzed a real-world forum initiated by a single large company in the forest and paper products industry. This company, which the study calls 'Company A', invited its own key partners—suppliers, distributors, and customers—to form a private, focused group.
Expert: They also brought in neutral university researchers to facilitate the discussions. This was crucial. It ensured that the organizing company was seen as an equal participant, not a dominant force, which helped build a safe environment for open dialogue.
Host: A private club for cybersecurity, but with your own business partners. I can see how that would build trust. What were some of the key findings?
Expert: The biggest finding was that this model works incredibly well. It created a level of trust and relevance that broader forums just can't match. The conversations became much more transparent and collaborative.
Host: Can you give us an example of that transparency in action?
Expert: Absolutely. One of the most powerful moments was when a company that had previously suffered a major ransomware attack openly shared its story—the details of the breach, the recovery process, and the lessons learned. That kind of first-hand account is invaluable and only happens in a high-trust environment. It moved the conversation beyond theory into real, shared experience.
Host: That’s incredibly powerful. So this open dialogue actually led to concrete improvements?
Expert: Yes, that’s the critical outcome. Participants started seeing the security maturity of their partners, for better or worse. This led to tangible changes. For instance, the organizing company completely revised its cybersecurity playbook based on new risk metrics discussed in the forum. Others updated their third-party risk management and adopted new tools shared by the group.
Host: This is the most important part for our listeners, Alex. What does this all mean for business leaders, regardless of their industry? What’s the key takeaway?
Expert: The biggest takeaway is that your company’s security is only as strong as the weakest link in your value chain. You can have the best defenses in the world, but if a key supplier gets breached, your operations can grind to a halt. This model strengthens the entire ecosystem.
Host: So it’s about taking ownership of your immediate business environment, not just your own four walls.
Expert: Precisely. You don’t need to wait for a massive industry initiative. As a business leader, you can be the catalyst. This study shows that an invitation from a key business partner is very likely to be accepted. You have the power to convene your critical partners and start this conversation.
Host: What would you say is a practical first step for a leader who wants to try this?
Expert: Start by identifying your most critical partners—those you share sensitive data or network connections with. Then, frame the conversation around shared risk and mutual benefit. The goal isn't to point fingers; it's to learn from each other's strategies, policies, and tools to collectively raise your defenses against common threats.
Host: Fantastic insights, Alex. To summarize for our audience: traditional, broad cybersecurity forums often fall short due to a lack of trust and relevance. A company-led forum, focused specifically on your own business value chain, is a powerful alternative that builds trust, encourages transparency, and leads to real, tangible security improvements for everyone involved.
Host: It’s a powerful reminder that collaboration isn’t just a buzzword; it’s a strategic imperative for survival in today’s digital world.
Host: Alex Ian Sutherland, thank you so much for your time and expertise today.
Expert: My pleasure, Anna.
Host: And thanks to all of you for listening to A.I.S. Insights, powered by Living Knowledge. Join us next time as we continue to bridge the gap between academia and business.
cybersecurity, information sharing, extended value chain, supply chain security, cyber resilience, forest products industry, inter-organizational collaboration
MIS Quarterly Executive (2025)
Unraveling the Role of Cyber Insurance in Fortifying Organizational Cybersecurity
Wojciech Strzelczyk, Karolina Puławska
This study explores how cyber insurance serves as more than just a financial tool for compensating victims of cyber incidents. Based on in-depth interviews with insurance industry experts and policy buyers, the research analyzes how insurance improves an organization's cybersecurity across three distinct stages: pre-purchase, post-purchase, and post-cyberattack.
Problem
As businesses increasingly rely on digital technologies, they face a growing risk of cyberattacks that can lead to severe financial losses, reputational harm, and regulatory penalties. Many companies possess inadequate cybersecurity measures, and there is a need to understand how external mechanisms like insurance can proactively strengthen defenses rather than simply covering losses after an attack.
Outcome
- Cyber insurance actively enhances an organization's security posture, not just providing financial compensation after an incident. - The pre-purchase underwriting process forces companies to rigorously evaluate and improve their cybersecurity practices to even qualify for a policy. - Post-purchase, insurers require continuous improvement through audits and training, often providing resources and expertise to help clients strengthen their defenses. - Following an attack, cyber insurance provides access to critical incident management services, including expert support for damage containment, system restoration, and post-incident analysis to prevent future breaches.
Host: Welcome to A.I.S. Insights, the podcast at the intersection of business and technology, powered by Living Knowledge. I’m your host, Anna Ivy Summers. Host: Today, we’re looking at a new study titled "Unraveling the Role of Cyber Insurance in Fortifying Organizational Cybersecurity." It argues that cyber insurance is much more than a financial safety net. Host: With me is our analyst, Alex Ian Sutherland, who has dug into this research. Alex, welcome. Expert: Great to be here, Anna. Host: So, let's start with the big picture. Most business leaders know cyberattacks are a threat, but what’s the specific problem this study addresses? Expert: The problem is a dangerous gap in perception. As the study highlights, the global average cost of a data breach has hit a record $4.88 million. Yet many companies still have inadequate security, viewing insurance as a simple payout for when things go wrong. Expert: This research challenges that idea, showing that insurance shouldn’t be a reactive measure, but a proactive partnership to strengthen a company's defenses *before* an attack ever happens. Host: A proactive partnership. That’s a powerful shift in thinking. How did the researchers explore this? What was their approach? Expert: They went directly to the source. The study is based on in-depth interviews with 19 key players. One group was from the insurance industry itself—the brokers and underwriters who create and sell these policies. The other group was made up of business leaders who are the actual buyers of cyber insurance. Expert: This gave them a 360-degree view of how the process really works and the value it creates beyond just the policy document. Host: So, getting perspectives from both sides of the table. What were the key findings? What did they uncover? Expert: The study breaks it down into three distinct stages where insurance actively improves security. The first is the "pre-purchase" or underwriting phase. Host: This is when a company is just applying for a policy, right? Expert: Exactly. And it’s not just filling out a form. Insurers demand companies meet, and I'm quoting an IT security officer from the study, "very strict cybersecurity requirements." It forces a comprehensive look at your own systems. One interviewee called it a "conscience check" for confronting neglected areas. Expert: Insurers often conduct their own vulnerability scans and provide recommendations for improvement, essentially offering a low-cost security audit before a policy is even issued. Host: So the application process itself is a security benefit. What happens after the policy is in place? Expert: That's the second stage: "post-purchase." The insurance policy isn't a one-and-done deal. It acts as a catalyst for continuous improvement. Insurers often require ongoing actions like employee training on phishing and password hygiene. Expert: They also provide resources, like access to cybersecurity experts or discounts on security software, to help clients stay ahead of new threats. It’s an ongoing relationship. Host: And the third stage, which no business wants to experience, is after an attack. How does insurance play a role there? Expert: This is where the true value becomes clear. It’s not just about the money. The study shows the most critical benefit is immediate access to "cyber-emergency professionals." Expert: When an attack happens, one expert said "seconds matter." The policy gives you a 24/7 hotline to experts in damage containment, system restoration, and forensic analysis. This rapid, expert-led response can be the difference between a minor disruption and a catastrophic failure. Host: This is fascinating. It reframes the entire value proposition of cyber insurance. So, for the business leaders and executives listening, what are the key takeaways? Why does this matter for them? Expert: There are three critical takeaways. First, treat the insurance application process as a strategic review of your cybersecurity, not a bureaucratic hurdle. It’s an opportunity to get an expert, outside-in view of your vulnerabilities. Host: So, embrace the scrutiny. Expert: Yes. Second, view your insurer as an active security partner. Use the resources they offer—the training, the threat intelligence, the expert consultations. They have a vested financial interest in keeping you safe, so their goals are aligned with yours. Host: And the third takeaway? Expert: Understand that in a crisis, the insurer’s incident response service is arguably more valuable than the financial payout. Having an elite team of experts on call, ready to contain a breach, is a capability most companies simply can't afford to maintain in-house. A chief operating officer in the study said insurance should be seen as just one part of a holistic remedy, contributing to about 10% of a company's total cyber resilience. Host: That really puts it in perspective. So to recap: The insurance application is a valuable audit, your insurer is a security partner, and their expert response team is a critical asset. Host: Alex, thank you for breaking down this insightful study for us. It’s clear that cyber insurance is evolving from a simple financial product into a core pillar of a proactive cybersecurity strategy. Expert: My pleasure, Anna. Host: And thanks to all of you for tuning in to A.I.S. Insights. We'll see you next time.
How Germany Successfully Implemented Its Intergovernmental FLORA System
Julia Amend, Simon Feulner, Alexander Rieger, Tamara Roth, Gilbert Fridgen, and Tobias Guggenberger
This paper presents a case study on Germany's implementation of FLORA, a blockchain-based IT system designed to manage the intergovernmental processing of asylum seekers. It analyzes how the project navigated legal and technical challenges across different government levels. Based on the findings, the study offers three key recommendations for successfully deploying similar complex, multi-agency IT systems in the public sector.
Problem
Governments face significant challenges in digitalizing services that require cooperation across different administrative layers, such as federal and state agencies. Legal mandates often require these layers to maintain separate IT systems, which complicates data exchange and modernization. Germany's asylum procedure previously relied on manually sharing Excel-based lists between agencies, a process that was slow, error-prone, and created data privacy risks.
Outcome
- FLORA replaced inefficient Excel-based lists with a decentralized system, enabling a more efficient and secure exchange of procedural information between federal and state agencies. - The system created a 'single procedural source of truth,' which significantly improved the accuracy, completeness, and timeliness of information for case handlers. - By streamlining information exchange, FLORA reduced the time required for initial stages of the asylum procedure by up to 50%. - The blockchain-based architecture enhanced legal compliance by reducing procedural errors and providing a secure way to manage data that adheres to strict GDPR privacy requirements. - The study recommends that governments consider decentralized IT solutions to avoid the high hidden costs of centralized systems, deploy modular solutions to break down legacy architectures, and use a Software-as-a-Service (SaaS) model to lower initial adoption barriers for agencies.
Host: Welcome to A.I.S. Insights, the podcast where we connect Living Knowledge to your business. I'm your host, Anna Ivy Summers. Host: Today, we're diving into a fascinating case of digital transformation in a place you might not expect: government administration. We're looking at a study titled "How Germany Successfully Implemented Its Intergovernmental FLORA System." Host: With me is our analyst, Alex Ian Sutherland. Alex, in simple terms, what is this study all about? Expert: Hi Anna. This study is a deep dive into FLORA, a blockchain-based IT system Germany built to manage the complex process of handling asylum applications. It’s a great example of how to navigate serious legal and technical hurdles when multiple, independent government agencies need to work together. Host: And this is a common struggle, right? Getting different departments, or in this case, entire levels of government, to use the same playbook. Expert: Exactly. Governments often face a big challenge: legal rules require federal and state agencies to have their own separate IT systems. This makes sharing data securely and efficiently a real nightmare. Host: So what was Germany's asylum process like before FLORA? Expert: It was surprisingly low-tech and risky. The study describes how agencies were manually filling out Excel spreadsheets and emailing them back and forth. This process was incredibly slow, full of errors, and created huge data privacy risks. Host: A classic case of digital transformation being desperately needed. How did the researchers get such an inside look at how this project was fixed? Expert: They conducted a long-term case study, following the FLORA project for six years, right from its initial concept in 2018 through its successful rollout. They interviewed nearly 100 people involved, analyzed thousands of pages of documents, and were present in project meetings. It's a very thorough look behind the curtain. Host: So after all that research, what were the big wins? How did FLORA change things? Expert: The results were dramatic. First, it replaced those insecure Excel lists with a secure, decentralized system. This meant federal and state agencies could share procedural information efficiently without giving up control of their own core systems. Host: That sounds powerful. What else did they find? Expert: The system created what the study calls a 'single procedural source of truth.' For the first time, every case handler, regardless of their agency, was looking at the same accurate, complete, and up-to-date information. Host: I can imagine that saves a lot of headaches. Did it actually make the process faster? Expert: It did. The study found that by streamlining this information exchange, FLORA reduced the time needed for the initial stages of the asylum procedure by up to 50 percent. Host: Wow, a 50 percent reduction is massive. Was there also an impact on security and compliance? Expert: Absolutely. The blockchain-based design was key here. It provided a secure, transparent log of every step, which reduced procedural errors and made it easier to comply with strict GDPR privacy laws. Host: This is a fantastic success story for the public sector. But Alex, what are the key takeaways for our business listeners? How can a company apply these lessons? Expert: There are three huge takeaways. First, when you're trying to connect siloed departments or integrate a newly acquired company, don't automatically default to building one giant, centralized system. Host: Why not? Isn't that the simplest approach? Expert: It seems simple, but the study highlights the massive 'hidden costs'—like trying to force everyone to standardize their processes or overhauling existing software. FLORA’s decentralized approach allowed different agencies to cooperate without losing their autonomy. It's a model for flexible integration. Host: That makes sense. What's the second lesson? Expert: Deploy modular solutions to break down legacy architecture. Instead of a risky 'rip and replace' project, FLORA was designed to complement existing systems. It's about adding new, flexible layers on top of the old, and gradually modernizing piece by piece. Any business with aging critical software should pay attention to this. Host: So, evolution, not revolution. And the final takeaway? Expert: Use a Software-as-a-Service, or SaaS, model to lower adoption barriers. The study explains that the federal agency initially built and hosted FLORA for the state agencies at no cost. This removed the financial and technical hurdles, getting everyone on board quickly. Once they saw the value, they were willing to share the costs later on. Host: That's a powerful strategy. So, to recap: Germany's FLORA project teaches us that for complex integration projects, businesses should consider decentralized systems to maintain flexibility, use modular solutions to tackle legacy tech, and leverage a SaaS model to drive initial adoption. Host: Alex, this has been incredibly insightful. Thank you for breaking it down for us. Expert: My pleasure, Anna. Host: And thank you to our listeners for tuning in to A.I.S. Insights, powered by Living Knowledge. We'll see you next time.
intergovernmental IT systems, digital government, blockchain, public sector innovation, case study, asylum procedure, Germany
MIS Quarterly Executive (2025)
Promises and Perils of Generative AI in Cybersecurity
Pratim Datta, Tom Acton
This paper presents a case study of a fictional insurance company, based on real-life events, to illustrate how generative artificial intelligence (GenAI) can be used for both offensive and defensive cybersecurity purposes. It explores the dual nature of GenAI as a tool for both attackers and defenders, presenting a significant dilemma for IT executives. The study provides actionable recommendations for developing a comprehensive cybersecurity strategy in the age of GenAI.
Problem
With the rapid adoption of Generative AI by both cybersecurity defenders and malicious actors, IT leaders face a critical challenge. GenAI significantly enhances the capabilities of attackers to create sophisticated, large-scale, and automated cyberattacks, while also offering powerful new tools for defense. This creates a high-stakes 'AI arms race,' forcing organizations to decide how to strategically embrace GenAI for defense without being left vulnerable to adversaries armed with the same technology.
Outcome
- GenAI is a double-edged sword, capable of both triggering and defending against sophisticated cyberattacks, requiring a proactive, not reactive, security posture. - Organizations must integrate a 'Defense in Depth' (DiD) strategy that extends beyond technology to include processes, a security-first culture, and continuous employee education. - Robust data governance is crucial to manage and protect data, the primary target of attacks, by classifying its value and implementing security controls accordingly. - A culture of continuous improvement is essential, involving regular simulations of real-world attacks (red-team/blue-team exercises) and maintaining a zero-trust mindset. - Companies must fortify defenses against AI-powered social engineering by combining advanced technical filtering with employee training focused on skepticism and verification. - Businesses should embrace proactive, AI-driven defense mechanisms like AI-powered threat hunting and adaptive honeypots to anticipate and neutralize threats before they escalate.
Host: Welcome to A.I.S. Insights, powered by Living Knowledge. I’m your host, Anna Ivy Summers. Host: Today, we're diving into a critical topic for every business leader: cybersecurity in the age of artificial intelligence. Host: We'll be discussing a fascinating study from the MIS Quarterly Executive, titled "Promises and Perils of Generative AI in Cybersecurity." Host: It explores how GenAI has become a tool for both attackers and defenders, creating a significant dilemma for IT executives. Host: To help us unpack this, we have our expert analyst, Alex Ian Sutherland. Welcome, Alex. Expert: Great to be here, Anna. Host: Alex, let's start with the big picture. The study summary mentions an 'AI arms race'. What is the core problem that business leaders are facing right now? Expert: The problem is that the game has fundamentally changed. For years, cyberattacks were something IT teams reacted to. But Generative AI has supercharged the attackers. Expert: Malicious actors are now using what the study calls 'black-hat GenAI' to create incredibly sophisticated, large-scale, and automated attacks that are faster and more convincing than anything we've seen before. Expert: Think of phishing emails that perfectly mimic your CEO's writing style, or malware that can change its own code in real-time to avoid detection. This technology makes it easy for even non-technical criminals to launch devastating attacks. Host: So, how did the researchers actually go about studying this fast-moving threat? Expert: They used a very practical approach. The study presents a detailed case study of a fictional insurance company, "Surine," that suffers one of these advanced attacks. Expert: But what's crucial is that this fictional story is based on real-life events and constructed from interviews with actual cybersecurity professionals and their clients. It’s not just theory; it’s a reflection of what’s happening in the real world. Host: That's a powerful way to illustrate the risk. So, after analyzing this case, what were the main findings? Expert: The first, and most important, is that GenAI is a double-edged sword. It’s an incredible weapon for attackers, but it's also an essential shield for defenders. This means companies can no longer afford to be reactive. They must be proactive. Host: What does being proactive look like in this context? Expert: It means adopting what the study calls a 'Defense in Depth' strategy. This isn't just about buying the latest security software. It’s a holistic approach that integrates technology, processes, and people. Host: And that people element seems critical. The study mentions that GenAI is making social engineering, like phishing attacks, much more dangerous. Expert: Absolutely. In the Surine case, the attackers used GenAI to craft a perfectly convincing email, supposedly from the CIO, complete with a deepfake video. It tricked employees into giving up their credentials. Expert: This is why the study emphasizes the need for a security-first culture and continuous employee education. We need to train our teams to have a healthy skepticism. Host: It sounds like fighting an AI-powered attacker requires an AI-powered defender. Expert: Precisely. The other key finding is the need to embrace proactive, AI-driven defense. The company in the study fought back using AI-powered 'honeypots'. Host: Honeypots? Can you explain what those are? Expert: Think of them as smart traps. They are decoy systems designed to look like valuable targets. A defensive AI uses them to lure the attacking AI, study its methods, and learn how to defeat it—all without putting real company data at risk. It’s literally fighting fire with fire. Host: This is all so fascinating. Alex, let’s bring it to our audience. What are the key takeaways for business leaders listening right now? Why does this matter to them? Expert: First, recognize that cybersecurity is no longer just an IT problem; it’s a core business risk. It requires a company-wide culture of security, championed from the C-suite down. Expert: Second, you must know what you're protecting. The study stresses the importance of robust data governance. Classify your data, understand its value, and focus your defenses on your most critical assets. Expert: Third, you have to shift from a reactive to a proactive mindset. This means investing in continuous training, running real-world attack simulations, and adopting a 'zero-trust' culture where every access attempt is verified. Expert: And finally, you have to leverage AI in your defense. In this new landscape, human teams alone can't keep up with the speed and scale of AI-driven attacks. You need AI to help anticipate and neutralize threats before they escalate. Host: So the message is clear: the threat has evolved, and so must our defense. Generative AI is both a powerful weapon and an essential shield. Host: Business leaders need a holistic, culture-first strategy and must be proactive, using AI to fight AI. Host: Alex Ian Sutherland, thank you for sharing these invaluable insights with us today. Expert: My pleasure, Anna. Host: And thank you to our listeners for tuning in to A.I.S. Insights, powered by Living Knowledge. Join us next time as we continue to explore the intersection of business and technology.
Generative AI, Cybersecurity, Black-hat AI, White-hat AI, Threat Hunting, Social Engineering, Defense in Depth
MIS Quarterly Executive (2025)
How Siemens Empowered Workforce Re- and Upskilling Through Digital Learning
Leonie Rebecca Freise, Eva Ritz, Ulrich Bretschneider, Roman Rietsche, Gunter Beitinger, and Jan Marco Leimeister
This case study examines how Siemens successfully implemented a human-centric, bottom-up approach to employee reskilling and upskilling through digital learning. The paper presents a four-phase model for leveraging information systems to address skill gaps and provides five key recommendations for organizations to foster lifelong learning in dynamic manufacturing environments.
Problem
The rapid digital transformation in manufacturing is creating a significant skills gap, with a high percentage of companies reporting shortages. Traditional training methods are often not scalable or adaptable enough to meet these evolving demands, presenting a major challenge for organizations trying to build a future-ready workforce.
Outcome
- The study introduces a four-phase model for developing human-centric digital learning: 1) Recognizing employee needs, 2) Identifying key employee traits (like self-regulation and attitude), 3) Developing tailored strategies, and 4) Aligning strategies with organizational goals. - Key employee needs for successful digital learning include task-oriented courses, peer exchange, on-the-job training, regular feedback, personalized learning paths, and micro-learning formats ('learning nuggets'). - The paper proposes four distinct learning strategies based on employees' attitude and self-regulated learning skills, ranging from community mentoring for those low in both, to personalized courses for those high in both. - Five practical recommendations for companies are provided: 1) Foster a lifelong learning culture, 2) Tailor digital learning programs, 3) Create dedicated spaces for collaboration, 4) Incorporate flexible training formats, and 5) Use analytics to provide feedback.
Host: Welcome to A.I.S. Insights — powered by Living Knowledge, the podcast where we break down complex research into actionable business strategy. I'm your host, Anna Ivy Summers.
Host: Today, we're diving into a fascinating case study called "How Siemens Empowered Workforce Re- and Upskilling Through Digital Learning." It examines how the manufacturing giant successfully implemented a human-centric, bottom-up approach to employee training in the digital age. With me to unpack this is our analyst, Alex Ian Sutherland. Welcome, Alex.
Expert: Great to be here, Anna.
Host: Alex, let's start with the big picture. We hear about digital transformation constantly, but this study highlights a serious challenge that comes with it. What's the core problem they're addressing?
Expert: The core problem is a massive and growing skills gap. As manufacturing becomes more automated and digitized, the skills employees need are changing faster than ever. The study notes that in Europe alone, a staggering 77% of companies report skills shortages.
Expert: The old model of sending employees to a week-long training course once a year just doesn't work anymore. It's not scalable, it's not adaptable, and it often doesn't stick. Companies are struggling to build a future-ready workforce.
Host: So how did the researchers get inside this problem to find a solution? What was their approach?
Expert: They conducted an in-depth case study at Siemens Digital Industries. This wasn't about looking at spreadsheets from a distance. They went right to the source, conducting detailed interviews with employees from all levels—from the factory floor to management—to understand their genuine needs, challenges, and motivations when it comes to digital learning.
Host: Taking a human-centric approach to the research itself. So, what did they find? What were the key takeaways from those conversations?
Expert: They uncovered several critical insights, which they organized into a four-phase model for success. The first and most important finding is that you have to start by recognizing what employees actually need, not what the organization thinks they need.
Host: And what do employees say they need? Is it just more training courses?
Expert: Not at all. They need task-oriented training that’s directly relevant to their job. They want opportunities to exchange knowledge with their peers and mentors. And they really value flexible, bite-sized learning—what Siemens calls 'learning nuggets'. These are short, focused videos or tutorials they can access right on the factory floor during a short production stop.
Host: That makes so much sense. It's about integrating learning into the workflow. What else stood out?
Expert: A crucial finding was that a one-size-fits-all approach is doomed to fail because employees are not all the same. The research identified two key traits that determine how a person engages with learning: their attitude, meaning how motivated they are, and their skill at self-regulated learning, which is their ability to manage their own progress.
Expert: Based on those two traits, the study proposes four distinct strategies. For an employee with a great attitude and high self-regulation, you can offer a rich library of personalized courses and let them drive. But for someone with a low attitude and weaker self-regulation skills, you need to start with community mentoring and guided support to build their confidence.
Host: This is the most important part for our listeners. Alex, what does this all mean for a business leader? Why does this matter and how can they apply these lessons?
Expert: It matters because it offers a clear roadmap to solving the skills gap, and it creates immense business value through a more engaged and capable workforce. The study boils it down to five key recommendations. First, you have to foster a lifelong learning culture. Siemens's company-wide slogan is "Making learning a habit." It has to be a core value, not just an HR initiative.
Host: Okay, so culture is number one. What’s next?
Expert: Second, tailor the learning programs. Move away from generic content and use technology to create personalized learning paths for different roles and skill levels. This is far more cost-efficient and effective.
Host: You mentioned peer exchange. How does that fit in?
Expert: That’s the third recommendation: create dedicated spaces for collaboration. This can be digital or physical. Siemens successfully uses "digi-coaches"—employees who are trained to help their peers use the digital learning tools. It builds a supportive ecosystem.
Expert: The fourth is to incorporate flexible training formats. Those 'learning nuggets' are a perfect example. It respects the employee's time and workflow, which boosts engagement.
Expert: And finally, number five: use analytics to provide feedback. This isn't for surveillance, but to help employees track their own progress and for managers to identify where support is needed. It helps make learning a positive, data-informed journey.
Host: So, to summarize, the old top-down training model is broken. This study of Siemens proves that the path forward is a human-centric, bottom-up strategy. It's about truly understanding your employees' needs and tailoring learning to them.
Host: It seems that by empowering the individual, you empower the entire organization. Alex, thank you for these fantastic insights.
Expert: My pleasure, Anna.
Host: And thank you for tuning in to A.I.S. Insights. Join us next time as we continue to connect knowledge with opportunity.
digital learning, upskilling, reskilling, workforce development, human-centric, manufacturing, case study
MIS Quarterly Executive (2025)
Transforming Energy Management with an AI-Enabled Digital Twin
Hadi Ghanbari, Petter Nissinen
This paper reports on a case study of how one of Europe's largest district heating providers, called EnergyCo, implemented an AI-assisted digital twin to improve energy efficiency and sustainability. The study details the implementation process and its outcomes, providing six key recommendations for executives in other industries who are considering adopting digital twin technology.
Problem
Large-scale energy providers face significant challenges in managing complex district heating networks due to fluctuating energy prices, the shift to decentralized renewable energy sources, and operational inefficiencies from siloed departments. Traditional control systems lack the comprehensive, real-time view needed to optimize the entire network, leading to energy loss, higher costs, and difficulties in achieving sustainability goals.
Outcome
- The AI-enabled digital twin provided a comprehensive, real-time representation of the entire district heating network, replacing fragmented views from legacy systems. - It enabled advanced simulation and optimization, allowing the company to improve operational efficiency, manage fluctuating energy prices, and move toward its carbon neutrality goals. - The system facilitated scenario-based decision-making, helping operators forecast demand, optimize temperatures and pressures, and reduce heat loss. - The digital twin enhanced cross-departmental collaboration by providing a shared, holistic view of the network's operations. - It enabled a shift from reactive to proactive maintenance by using predictive insights to identify potential equipment failures before they occur, reducing costs and downtime.
Host: Welcome to A.I.S. Insights, the podcast powered by Living Knowledge, where we translate complex research into actionable business strategy. I’m your host, Anna Ivy Summers.
Host: Today, we're diving into a fascinating case study called "Transforming Energy Management with an AI-Enabled Digital Twin." It details how one of Europe's largest energy providers used this cutting-edge technology to completely overhaul its operations for better efficiency and sustainability. With me is our expert analyst, Alex Ian Sutherland. Alex, welcome.
Expert: Thanks for having me, Anna.
Host: So, Alex, let's start with the big picture. Why would a massive energy company need a technology like an AI-enabled digital twin? What problem were they trying to solve?
Expert: Well, a company like EnergyCo, as it's called in the study, manages an incredibly complex district heating network. We're talking about over 2,800 kilometers of pipes. Their traditional control systems just couldn't keep up.
Host: What was making it so difficult?
Expert: It was a perfect storm of challenges. First, you have volatile energy prices. Second, they're shifting from a few big fossil-fuel plants to many smaller, decentralized renewable sources, which are less predictable. And internally, their departments were siloed. The production team, the network team, and the customer team all had different data and different priorities, leading to significant energy loss and higher costs.
Host: It sounds like they were flying with a dozen different dashboards but no single view of the cockpit. So what was the approach they took? What exactly is a digital twin?
Expert: In simple terms, a digital twin is a dynamic, virtual replica of a physical system. The key thing that distinguishes it from a simple digital model is that the data flow is automatic and two-way. It doesn't just receive real-time data from the physical network; it can be used to simulate changes and even send instructions back to optimize it.
Host: So it’s a living model, not a static blueprint. How did the study find this approach worked in practice for EnergyCo? What were the key outcomes?
Expert: The results were transformative. The first major finding was that the digital twin provided a single, comprehensive, real-time representation of the entire network. For the first time, everyone was looking at the same holistic picture.
Host: And what did that unified view enable them to do?
Expert: It unlocked advanced simulation and optimization. Operators could now run "what-if" scenarios. For example, they could accurately forecast demand based on weather data and then simulate the most cost-effective way to generate and distribute heat, drastically reducing energy loss and managing those fluctuating fuel prices.
Host: The study also mentions collaboration. How did it help there?
Expert: By breaking down the data silos, it naturally improved cross-departmental collaboration. When the production team could see how their decisions impacted network pressure miles away, they could make smarter, more coordinated choices. It created a shared operational language.
Host: That makes sense. And I was particularly interested in the shift from reactive to proactive maintenance.
Expert: Absolutely. Instead of waiting for a critical failure, the AI within the twin could analyze data to predict which components were under stress or likely to fail. This allowed EnergyCo to schedule maintenance proactively, which is far cheaper and less disruptive than emergency repairs.
Host: Alex, this is clearly a game-changer for the energy sector. But what’s the key takeaway for our listeners—the business leaders in manufacturing, logistics, or even retail? Why does this matter to them?
Expert: The most crucial lesson is about global versus local optimization. So many businesses try to improve one department at a time, but that can create bottlenecks elsewhere. A digital twin gives you a holistic view of your entire value chain, allowing you to make decisions that are best for the whole system, not just one part of it.
Host: So it’s a tool for breaking down those internal silos we see everywhere.
Expert: Exactly. The second key takeaway is that the human element is vital. The study shows that EnergyCo didn't just deploy the tech and replace people. They positioned it as a tool to support their operators, building trust and involving them in the process. Automation was gradual, which is critical for buy-in.
Host: That’s a powerful point about managing technological change. Any final takeaway for our audience?
Expert: Yes, the study highlights how this technology can become a foundation for new business models. EnergyCo is now exploring how to use the digital twin to give customers real-time data, turning them from passive consumers into active participants in energy management. For any business, this shows that operational tools can unlock future strategic growth.
Host: So, to summarize: an AI-enabled digital twin offers a holistic, real-time view of your operations, it breaks down silos to enable smarter decisions, and it can even pave the way for future innovation. It's about augmenting your people, not just automating processes.
Host: Alex Ian Sutherland, thank you so much for these brilliant insights.
Expert: My pleasure, Anna.
Host: And thank you to our audience for tuning into A.I.S. Insights, powered by Living Knowledge. Join us next time as we uncover more actionable intelligence from the world of research.
Digital Twin, Energy Management, District Heating, AI, Cyber-Physical Systems, Sustainability, Case Study
MIS Quarterly Executive (2024)
How a Utility Company Established a Corporate Data Culture for Data-Driven Decision Making
Philipp Staudt, Rainer Hoffmann
This paper presents a case study of a large German utility company's successful transition to a data-driven organization. It outlines the strategy, which involved three core transformations: enabling the workforce, improving the data lifecycle, and implementing employee-centered data management. The study provides actionable recommendations for industrial organizations facing similar challenges.
Problem
Many industrial companies, particularly in the utility sector, struggle to extract value from their data. The ongoing energy transition, with the rise of renewable energy sources and electric vehicles, has made traditional, heuristic-based decision-making obsolete, creating an urgent need for a robust corporate data culture to manage increasing complexity and ensure grid stability.
Outcome
- A data culture was successfully established through three intertwined transformations: enabling the workforce, improving the data lifecycle, and transitioning to employee-centered data management. - Enabling the workforce involved upskilling programs ('Data and AI Multipliers'), creating platforms for knowledge sharing, and clear communication to ensure widespread buy-in and engagement. - The data lifecycle was improved by establishing new data infrastructure for real-time data, creating a central data lake, and implementing a strong data governance framework with new roles like 'data officers' and 'data stewards'. - An employee-centric approach, featuring cross-functional teams, showcasing quick wins to demonstrate value, and transparent communication, was crucial for overcoming resistance and building trust. - The transformation resulted in the deployment of over 50 data-driven solutions that replaced outdated processes and improved decision-making in real-time operations, maintenance, and long-term planning.
Host: Welcome to A.I.S. Insights — powered by Living Knowledge, the podcast where we turn academic research into actionable business intelligence. I’m your host, Anna Ivy Summers. Host: Today, we’re diving into a fascinating case study titled, "How a Utility Company Established a Corporate Data Culture for Data-Driven Decision Making." Host: It explores how a large German utility company transformed itself into a data-driven organization. To help us unpack this, we have our expert analyst, Alex Ian Sutherland. Welcome, Alex. Expert: Great to be here, Anna. Host: Alex, let's start with the big picture. Most companies know data is important, but this study focuses on a utility company. What was the specific problem they were trying to solve? Expert: It’s a problem many traditional industries are facing, but it's especially acute in the energy sector. They’re dealing with a massive shift—the rise of renewable energy like wind and solar, and the explosion in electric vehicle charging. Host: So the old ways of working just weren't cutting it anymore? Expert: Exactly. For decades, they relied on experience and simple tools. The study gives a great example of a "drag pointer"—basically a needle on a gauge that only showed the highest energy load a substation ever experienced. It didn't tell you when it happened, or why. Host: A single data point, with no context. Expert: Precisely. And that was fine when the grid was predictable. But suddenly, they went from handling a dozen requests for new EV chargers a month to nearly three thousand. The old "rule-of-thumb" approach became obsolete and even risky for grid stability. They were flying blind. Host: So how did the researchers get inside this transformation to understand how the company fixed this? Expert: They conducted a deep-dive case study, interviewing seven of the company’s key domain experts. These were the people on the front lines—the ones directly involved in building the new data strategy. This gave them a real ground-truth perspective on what actually worked. Host: So what were the key findings? What was the secret to their success? Expert: The study breaks it down into three core transformations that were all linked together. The first, and perhaps most important, was enabling the workforce. Host: This wasn't just about hiring a team of data scientists, then? Expert: Not at all. They created a program to train existing employees to become "Data and AI Multipliers." These were people from various departments who became data champions, identifying opportunities and helping their colleagues use new tools. It was about upskilling from within. Host: Building capability across the organization. What was the second transformation? Expert: Improving the data lifecycle. This sounds technical, but it’s really about fixing the plumbing. They moved from scattered, siloed databases to a central data lake, creating a single source of truth that everyone could access. Host: And I see they also created new roles like 'data officers' and 'data stewards'. Expert: Yes, and this is crucial. It made data quality a formal part of people's jobs. Instead of data being an abstract IT issue, specific people became accountable for its accuracy and maintenance within their business units. Host: That makes sense. But change is hard. How did they get everyone to embrace this new way of working? Expert: That brings us to the third piece: an employee-centered approach. They knew they couldn't just mandate this from the top down. They formed cross-functional teams, bringing engineers and data specialists together to solve real problems. Host: And they made a point of showcasing quick wins, right? Expert: Absolutely. This was key to building momentum. For example, they automated a critical report that used to take two employees a full month to compile, three times a year. Suddenly, that data was available in real-time. When people see that kind of tangible benefit, it overcomes resistance and builds trust in the process. Host: This is all fascinating for a utility company, but what's the key takeaway for a business leader in, say, manufacturing or retail? Why does this matter to them? Expert: The lessons are completely universal. First, you can't just buy technology; you have to invest in your people. The "Data Multiplier" model of empowering internal champions can work in any industry. Host: So, people first. What else? Expert: Second, make data quality an explicit responsibility. Creating roles like data stewards ensures accountability and treats data as the critical business asset it is. It stops being everyone's problem and no one's priority. Host: And the third lesson? Expert: Start small and demonstrate value fast. Don't try to boil the ocean. Find a painful, manual process, fix it with a data-driven solution, and then celebrate that "quick win." That success story becomes your best marketing tool for driving wider adoption. Ultimately, this company deployed over 50 new data solutions that transformed their operations. Host: A powerful example of real-world impact. So, to recap: the challenges of the energy transition forced this company to ditch its old methods. Their success came from a three-part strategy: empowering their workforce, rebuilding their data infrastructure, and using an employee-centric approach focused on quick wins. Host: Alex, thank you so much for breaking that down for us. It’s a brilliant roadmap for any company looking to build a true data culture. Expert: My pleasure, Anna. Host: And thank you to our listeners for joining us on A.I.S. Insights — powered by Living Knowledge. We’ll see you next time.
data culture, data-driven decision making, utility company, energy transition, change management, data governance, case study
MIS Quarterly Executive (2024)
The Hidden Causes of Digital Investment Failures
Joe Peppard, R. M. Bastien
This study analyzes hundreds of digital projects to uncover the subtle, hidden root causes behind their frequent failure or underachievement. It moves beyond commonly cited symptoms, like budget overruns, to identify five fundamental organizational and structural issues that prevent companies from realizing value from their technology investments. The analysis is supported by an illustrative case study of a major insurance company's large-scale transformation program.
Problem
Organizations invest heavily in digital technology expecting significant returns, but most struggle to achieve their goals, and project success rates have not improved over time. Despite an abundance of project management frameworks and best practices, companies often address the symptoms of failure rather than the underlying problems. This research addresses the gap by identifying the deep-rooted, often surprising causes for these persistent investment failures.
Outcome
- The Illusion of Control: Business leaders believe they are controlling projects through metrics and governance, but this is an illusion that masks a lack of real influence over value creation. - The Fallacy of the “Working System”: The primary goal becomes delivering a functional IT system on time and on budget, rather than achieving the intended business performance improvements. - Conflicts of Interest: The conventional model of a single, centralized IT department creates inherent conflicts of interest, as the same group is responsible for designing, building, and quality-assuring systems. - The IT Amnesia Syndrome: A project-by-project focus leads to a collective organizational memory loss about why and how systems were built, creating massive complexity and technical debt for future projects. - Managing Expenses, Not Assets: Digital systems are treated as short-term expenses to be managed rather than long-term productive assets whose value must be cultivated over their entire lifecycle.
Host: Welcome to A.I.S. Insights — powered by Living Knowledge. I'm your host, Anna Ivy Summers. Host: Today, we’re tackling a multi-billion-dollar question: why do so many major digital and technology projects fail to deliver on their promise? Host: We’re diving into a fascinating new study called "The Hidden Causes of Digital Investment Failures". It analyzes hundreds of projects to uncover the subtle, often invisible root causes behind these failures, moving beyond the usual excuses like budget overruns or missed deadlines. Host: To help us unpack this is our analyst, Alex Ian Sutherland. Alex, welcome. Expert: Great to be here, Anna. Host: Alex, let's start with the big problem. Companies are pouring huge amounts of money into digital transformation, but the success rates just aren't improving. What's going on? Expert: It’s a huge issue. The study uses a great analogy: it’s like treating sciatica. You feel the pain in your leg, so you stretch the muscle. That gives temporary relief, but the root cause is a problem in your lower back. In business, we see symptoms like budget overruns and we react by adding more governance or new project management tools. We’re treating the leg, not the back. Expert: The study highlights a case of a major insurance company. They spent over $120 million and six years on a new platform, only to find they were less than a third of the way done, with the final cost estimate having nearly doubled. They were doing all the "right" project management things, but it was still failing. Host: So they were addressing the symptoms, not the true cause. How did the researchers in this study get to those root causes? What was their approach? Expert: They conducted a deep root-cause analysis. Think of it as business archaeology. They didn't just look at the surface of failed projects; they analyzed hundreds of them to map the complex cause-and-effect relationships that led to poor outcomes. They then workshopped these findings with senior practitioners to ensure they reflected real-world experience. Host: And this "archaeology" uncovered five key hidden causes. The first one is called 'The Illusion of Control'. It sounds a bit ominous. Expert: It is, in a way. Business leaders believe they're in control because they have dashboards, metrics, and steering committees tracking time and cost. But the study found this is an illusion. They are controlling the execution of the project, but they have no real influence over the creation of business value. Expert: In that insurance case, the executives saw progress reports, but over 95% of the budget was being spent by technical teams making hundreds of small, invisible decisions every week that ultimately determined the project's fate. The business leaders were too far removed to have any real control over the outcome. Host: Which sounds like it leads directly to the second finding: 'The Fallacy of the Working System'. What does that mean? Expert: It means the goalpost shifts. The original objective was to improve business performance, but the project's primary goal becomes just delivering a functional IT system on time and on budget. Everyone from the project manager to the CIO is incentivized to just get a "working system" out the door. Host: So, the 'working system' becomes the end goal, not the business value it was supposed to create. Expert: Exactly. And there's often no one held accountable for delivering that value after the project team declares victory and disbands. Host: The third cause is 'Conflicts of Interest'. This sounds like a structural problem. Expert: It's a huge one. The study points out that in mature industries like construction, you have separate roles: the customer funds it, the architect designs it, and the builder constructs it. They have separate accountabilities. But in the typical corporate structure, a single IT department does all three. They design, build, and quality-check their own work. Host: So when a trade-off has to be made between long-term quality and the short-term deadline... Expert: The deadline and budget almost always win. It creates a system that prioritizes short-term delivery over building resilient, high-quality digital assets. Host: And I imagine that short-term focus creates long-term problems, which might be what the fourth cause, 'The IT Amnesia Syndrome', is about. Expert: Precisely. Because the focus is on finishing the current project, things like proper documentation are the first to be cut. As teams move on and people leave, the organization forgets why systems were built a certain way. The study found this creates massive, unnecessary complexity. Future projects are then bogged down by trying to understand these poorly documented legacy systems. Host: It sounds like building on a shaky foundation you can't even see properly. Expert: A perfect description. Host: And the final hidden cause: 'Managing Expenses, Not Assets'. Expert: Right. A company would never treat a new factory or a fleet of cargo ships as a simple expense. They are managed as productive assets over their entire lifecycle. But digital systems, which can cost hundreds of millions, are often treated as short-term project expenses. There's no focus on their long-term value, maintenance costs, or when they should be retired. Host: So Alex, this is a pretty powerful diagnosis of what’s going wrong. The crucial question for our listeners is: what's the cure? What do leaders need to do differently? Expert: The study offers some clear, if challenging, recommendations. First, business leaders must truly *own* their digital systems as productive assets. The business unit that gets the value should be the owner, not the IT department. Expert: Second, organizations need to eliminate those conflicts of interest by separating the roles of architecting, building, and quality assurance. You need independent checks and balances. Expert: And finally, the mindset has to shift from securing funding to delivering value. One CEO the study mentions now calls project sponsors back before the investment committee years after a project is finished to prove the business benefits were actually achieved. That creates real accountability. Host: So it’s not about finding a better project methodology, but about fundamentally changing organizational structure and, most importantly, the mindset of leadership. Expert: That's the core message. The success or failure of a digital investment is determined long before the project itself ever kicks off. It's determined by the organizational system it operates in. Host: A fascinating and crucial insight. We’ve been discussing the study "The Hidden Causes of Digital Investment Failures". The five hidden causes are: The Illusion of Control, The Fallacy of the Working System, Conflicts of Interest, IT Amnesia Syndrome, and Managing Expenses, Not Assets. Host: Alex Ian Sutherland, thank you for making this so clear for us. Expert: My pleasure, Anna. Host: And thank you for listening to A.I.S. Insights — powered by Living Knowledge. Join us next time as we decode the research that’s reshaping the world of business.
digital investment, project failure, IT governance, root cause analysis, business value, single-counter IT model, technical debt
MIS Quarterly Executive (2024)
Establishing a Low-Code/No-Code-Enabled Citizen Development Strategy
Björn Binzer, Edona Elshan, Daniel Fürstenau, Till J. Winkler
This study analyzes the low-code/no-code adoption journeys of 24 different companies to understand the challenges and best practices of citizen development. Drawing on these insights, the paper proposes a seven-step strategic framework designed to guide organizations in effectively implementing and managing these powerful tools. The framework helps structure critical design choices to empower employees with little or no IT background to create digital solutions.
Problem
There is a significant gap between the high demand for digital solutions and the limited availability of professional software developers, which constrains business innovation and problem-solving. While low-code/no-code platforms enable non-technical employees (citizen developers) to build applications, organizations often lack a coherent strategy for their adoption. This leads to inefficiencies, security risks, compliance issues, and wasted investments.
Outcome
- The study introduces a seven-step framework for creating a citizen development strategy: Coordinate Architecture, Launch a Development Hub, Establish Rules, Form the Workforce, Orchestrate Liaison Actions, Track Successes, and Iterate the Strategy. - Successful implementation requires a balance between centralized governance and individual developer autonomy, using 'guardrails' rather than rigid restrictions. - Key activities for scaling the strategy include the '5E Cycle': Evangelize, Enable, Educate, Encourage, and Embed citizen development within the organization's culture. - Recommendations include automating governance tasks, promoting business-led development initiatives, and encouraging the use of these tools by IT professionals to foster a collaborative relationship between business and IT units.
Host: Welcome to A.I.S. Insights — powered by Living Knowledge. I’m your host, Anna Ivy Summers. Host: Today, we’re diving into a fascinating new study titled "Establishing a Low-Code/No-Code-Enabled Citizen Development Strategy". Host: It explores how companies can strategically empower their own employees—even those with no IT background—to create digital solutions using low-code and no-code tools. Joining me to unpack this is our analyst, Alex Ian Sutherland. Alex, welcome. Expert: Great to be here, Anna. Host: So, let’s start with the big picture. Why is a study like this so necessary right now? What’s the core problem businesses are facing? Expert: The problem is a classic case of supply and demand. The demand for digital solutions, for workflow automations, for new apps, is skyrocketing. But the supply of professional software developers is extremely limited and expensive. This creates a huge bottleneck that slows down innovation. Host: And companies are turning to low-code platforms as a solution? Expert: Exactly. They hope to turn regular employees into “citizen developers.” The issue is, most companies just buy the software and hope for the best, a sort of "build it and they will come" approach. Expert: But without a real strategy, this can lead to chaos. We're talking security risks, compliance issues, duplicated efforts, and ultimately, wasted money. It's like giving everyone power tools without any blueprints or safety training. Host: That’s a powerful analogy. So how did the researchers in this study figure out what the right approach should be? Expert: They went straight to the source. They conducted in-depth interviews with leaders, managers, and citizen developers at 24 different companies that were already on this journey. They analyzed their successes, their failures, and the best practices that emerged. Host: A look inside the real-world lab. What were some of the key findings that came out of that? Expert: The study's main outcome is a seven-step strategic framework. It covers everything from coordinating the technology architecture to launching a central support hub and tracking successes. Host: Can you give us an example? Expert: One of the most critical findings was the need for balance between control and freedom. The study found that rigid, restrictive rules don't work. Instead, successful companies create ‘guardrails.’ Expert: One manager used a great analogy, saying, "if the guardrails are only 50 centimeters apart, I can only ride through with a bicycle, not a truck. Ultimately, we want to achieve that at least cars can drive through." It’s about enabling people safely, not restricting them. Host: I love that. So it's not just about rules, but about creating the right environment. Expert: Precisely. The study also identified what it calls the ‘5E Cycle’: Evangelize, Enable, Educate, Encourage, and Embed. This is a process for making citizen development part of the company’s DNA, to build a culture where people are excited and empowered to innovate. Host: This is where it gets really practical. Let's talk about why this matters for a business leader. What are the key takeaways they can act on? Expert: The first big takeaway is to promote business-led citizen development. This shouldn't be just another IT project. The study shows that the most successful initiatives are driven by the business units themselves, with 'digital leads' or champions who understand their department's specific needs. Host: So, ownership moves from the IT department to the business itself. What else? Expert: The second is to automate governance wherever possible. Instead of manual checks for every new app, companies can use automated tools—often built with low-code itself—to check for security issues or compliance. This frees up IT to focus on bigger problems and empowers citizen developers to move faster. Host: And the final key takeaway? Expert: It’s about fostering a new, symbiotic relationship between business and IT. For decades, IT has often been seen as the department of "no." This study shows how citizen development can be a bridge. One leader admitted that building trust was their biggest hurdle, but now IT is seen as a valuable partner that enables transformation. Host: It sounds like this is about much more than just technology; it’s a fundamental shift in how work gets done. Expert: Absolutely. It’s about democratizing digital innovation. Host: Fantastic insights, Alex. To sum it up for our listeners: the developer shortage is a major roadblock, but simply buying low-code tools isn't the answer. Host: This study highlights the need for a clear strategy, one that uses flexible guardrails, builds a supportive culture, and transforms the relationship between business and IT from a source of friction to a true partnership. Host: Alex Ian Sutherland, thank you so much for breaking that down for us. Expert: My pleasure, Anna. Host: And thank you to our listeners for tuning into A.I.S. Insights. Join us next time as we continue to explore the ideas shaping the future of business.
Citizen Development, Low-Code, No-Code, Digital Transformation, IT Strategy, Governance Framework, Upskilling
MIS Quarterly Executive (2024)
Combining Low-Code/No-Code with Noncompliant Workarounds to Overcome a Corporate System's Limitations
Robert M. Davison, Louie H. M. Wong, Steven Alter
This study explores how employees at a warehouse in Hong Kong utilize low-code/no-code principles with everyday tools like Microsoft Excel to create unofficial solutions. It examines these noncompliant but essential workarounds that compensate for the shortcomings of their mandated corporate software system. The research is based on a qualitative case study involving interviews with warehouse staff.
Problem
A global company implemented a standardized, non-customizable corporate system (Microsoft Dynamics) that was ill-suited for the unique logistical needs of its Hong Kong operations. This created significant operational gaps, particularly in delivery scheduling, leaving employees unable to perform critical tasks using the official software.
Outcome
- Employees effectively use Microsoft Excel as a low-code tool to create essential, noncompliant workarounds that are vital for daily operations, such as delivery management. - These employee-driven solutions, developed without formal low-code platforms or IT approval, become institutionalized and crucial for business success, highlighting the value of 'shadow IT'. - The study argues that low-code/no-code development is not limited to formal platforms and that managers should recognize, support, and govern these informal solutions. - Businesses are advised to adopt a portfolio approach to low-code development, leveraging tools like Excel alongside formal platforms, to empower employees and solve real-world operational problems.
Host: Welcome to A.I.S. Insights, the podcast at the intersection of business and technology, powered by Living Knowledge. I’m your host, Anna Ivy Summers. Host: Today, we're diving into a fascinating study titled "Combining Low-Code/No-Code with Noncompliant Workarounds to Overcome a Corporate System's Limitations." Host: It explores how employees at a warehouse in Hong Kong used everyday tools, like Microsoft Excel, to create unofficial but essential solutions when their official corporate software fell short. Host: To help us unpack this, we have our expert analyst, Alex Ian Sutherland. Alex, welcome back. Expert: Great to be here, Anna. Host: So, Alex, let's start with the big picture. What was the real-world problem this study looked into? Expert: It’s a classic story of a global headquarters rolling out a one-size-fits-all solution. The company, called CoreRidge in the study, implemented a standardized corporate software, Microsoft Dynamics. Expert: The problem was, this system was completely non-customizable. It worked fine in most places, but it was a disaster for their Hong Kong operations. Host: A disaster how? What was so unique about Hong Kong? Expert: In Hong Kong, due to the high cost of real estate, the company has small retail stores and one large, central warehouse. The corporate software was designed for locations where the warehouse and store are together. Expert: It simply couldn't handle the complex delivery scheduling needed to get products from that single warehouse to all the different stores and customers. Core tasks were impossible to perform with the official system. Host: So employees were stuck. How did the researchers figure out what was happening? Expert: They went right to the source. It was a qualitative case study where they conducted in-depth interviews with 31 employees at the warehouse, from trainees all the way up to senior management. This gave them a ground-level view of how the team was actually getting work done. Host: And that brings us to the findings. What did they discover? Expert: They found that employees had essentially turned Microsoft Excel into their own low-code development tool. They were downloading data from the official system and using Excel to manage everything from delivery lists to rescheduling shipments during a typhoon. Host: So they built their own system, in a way. Expert: Exactly. And this wasn't a secret, rogue operation. These Excel workarounds became standard operating procedure. They were noncompliant with corporate IT policy, but they were absolutely vital for daily operations and customer satisfaction. The study calls this 'shadow IT', but frames it as a valuable, employee-driven innovation. Host: That’s a really interesting perspective. It sounds like the company should be celebrating these employees, not punishing them. Expert: That’s the core argument. The study suggests that this kind of informal, tool-based problem-solving is a legitimate form of low-code development. It’s not always about using a fancy, dedicated platform. Sometimes the best tool is the one your team already knows how to use. Host: This is the crucial part for our listeners. What are the key business takeaways here? Why does this matter? Expert: It matters immensely. First, it shows that managers need to recognize and support these informal solutions, not just shut them down. These workarounds are a goldmine of information about what's not working in your official systems. Host: So, don't fight 'shadow IT', but try to understand it? Expert: Precisely. The second major takeaway is that businesses should adopt a "portfolio approach" to low-code development. Don't just invest in one big platform. Empower your employees by recognizing the value of flexible, everyday tools like Excel. Expert: It’s about creating a governance structure that can embrace these informal solutions, manage their risks, and learn from them to make the whole organization smarter and more agile. Host: It sounds like a shift from rigid, top-down control to a more flexible, collaborative approach to technology. Expert: That's it exactly. It's about trusting your employees on the front lines to solve the problems they face every day, with the tools they have at hand. Host: So, to summarize: a rigid corporate system can fail to meet local needs, but resourceful employees can bridge the gap using everyday tools like Excel. And the big lesson for businesses is to recognize, govern, and learn from these informal innovations rather than just trying to eliminate them. Host: Alex, this has been incredibly insightful. Thank you for breaking it down for us. Expert: My pleasure, Anna. Host: And a big thank you to our audience for tuning in to A.I.S. Insights. Join us next time as we continue to explore the ideas shaping our world, powered by Living Knowledge.
Low-Code/No-Code, Workarounds, Shadow IT, Citizen Development, Enterprise Systems, Case Study, Microsoft Excel