We have been living in a world of digital disruption for more than two decades, but the new digital economy is redefining the rules of the game. This economy is defined by shared, collaborative, and on-demand services fueled by mobile, cloud, artificial intelligence, big data, and other emerging technologies. Businesses that are accustom to being market leaders and outpacing the competition are finding themselves quickly falling behind – or worse – heading toward going out of business altogether. Recent headlines show several highly recognized companies just couldn’t keep up with the new digital economy. Conversely, companies such as Uber and AirBnB utilized digital technology to transform century-old business models to become the world’s largest taxi service and the world’s largest accommodation provider in under a decade.
Digital Transformation – the process where companies overhaul their business models, processes, and functionalities to leverage the capabilities and advancements of emerging technologies to digitally reinvent their organizations – is vital to the survival of the modern business. While business leaders vary in their view and execution of digital transformation strategies the risk of doing nothing most often outweighs the risk of any internal disruption that can accompany transformation activities.
Digital transformation promises to modernize every aspect of today’s businesses, however, it comes with challenges, especially in the area of risk. As businesses implement new technologies such as big data, block-chain, artificial intelligence, and IoT they are experiencing more complex and higher risk in regards to cybersecurity and the potential for breaches of data privacy. These modernization efforts often involve unpredictable and unknown risks including concerns with non-compliance, fraud, revenue leakage, lack of governance, disaster recovery, service disruptions, and data loss. Making matters worse many organizations are historically risk averse or are ill-prepared to handle these new or increased levels of risk, in some cases resulting in the slow death of many digital transformation projects.
Over 88% of respondents in a recent 451 Research survey assessing the state of enterprise digital transformation across the globe indicated that a C-level executive was responsible for the digital transformation program within their organization. The reality is that many traditional C-level executives are often not comfortable with the kind of risk-taking and innovative thinking that is needed to achieve true digital transformation. Why? The reasons are many – the fear of the unknown, lack of freedom to try and fail, pressures to deliver strong “numbers,” fear of change and the resulting disruption, fear of cannibalizing existing lines of business – and the list goes on. Ultimately, this sets the tone for a company culture that fails to foster innovation and change and results in systematic delays, setbacks, and failures for many mission-critical technology initiatives.
The 451 Research survey also reveals that organizations identify with four goals when it comes to their digital transformation projects. The first three probably come as no surprise: Improve customer experience, boost operational efficiency, and increase the organization’s agility. The fourth goal – better managing business risk – is interesting and encouraging to see because it reflects the increased attention risk and security is starting to receive in the enterprise. Securing customer data and securing internal data (e.g., employee records, financials, etc.) were the two top priorities cited by survey respondents when it comes to better managing risk. These two objectives were followed closely by ensuring business continuity and systems availability (e.g., minimize downtime) and meeting privacy requirements.
The increased emphasis on managing the risk around customer and internal data couldn’t come at a better time.
Digital transformation, especially around the goal of improving the customer experience, requires greater access to data to achieve. The 451 Research study revealed that healthcare companies indicated that enabling greater access to electronic medical records was one of the main imperatives shaping their transformation strategies, while retail and financial service organizations are focused on optimizing and personalizing the customer experience across multiple channels. Personalized and relevant services with real-time feedback, coupled with coordination across all channels of the business are fueled by greater access to customer data.
Protecting and securing customer and internal data while granting different parts of the business (including partners) access to the right customer data delivered at the right time, and in the right format, will continue to be challenging for organizations for the foreseeable future. And if news of the latest breaches is any indication of where organizations are at in securing data then we are in for a long, rough ride.
The fear and risk of being left behind and not transforming is the catalyst to digital transformation for many organizations. At the same time, the fears and risks that come with actually implementing and making the changes needed to transform are often roadblocks to many digital transformation efforts. But, as organizations continue to progress down the road to security maturity they recognize that the need to better manage risk, especially in the new and changing digital economy, requires significate renovation in their current operations and business models that can only be achieved through digital transformation.
The 451 Research survey shows that many organizations believe they lack the expertise and abilities to modernize legacy practices and are leveraging external third-party experts to support them with executing certain aspects of their digital transformation strategy . It is a pragmatic and sensible step on the road to digital transformation.
To read the full findings of the 451 Research report, Managing Cybersecurity Risk through Digital Transformation, click here. And if you’d like to learn how to protect your business against cybersecurity breaches, talk to a CenturyLink security expert today.