The business world is undergoing significant transformation because of the adoption of digital technologies. A growing number of companies and organizations are warming up to the use of Internet-of-Things devices. They also realize the importance of moving more of their data into cloud storage.
As digital transformation takes shape, more firms are rethinking traditional business models. They are also innovating new ways to leverage data for growth. The forecast is that global spending on digital transformation will amount to approximately $1.18 trillion by the end of 2019.
For those companies that are yet to start the digital transformation process, there is a huge task of making them understand why they’ll be better placed to adopt the changes. The reason is that digital transformation presents both opportunities and challenges in equal measure.
85% of chief information officers realize that the expansion of a company’s digital presence also comes with some of the most prevalent evolving security needs. Security issues related to digital transformation have a tremendous effect on companies. The move is altering security needs in some significant ways that users need to be aware of. The changes have both positive and negative impacts, as this article will later reveal.
What is Digital Transformation?
Digital transformation is the process of changing how organizations interact with their customers through technology. It’s also the use of technology to enhance internal processes to make them more efficient. Beyond these two applications, digital transformation comes with a variety of different types of initiatives.
The two essential parts of the process are customer-centric and the internal aspect of it. This means that it encompasses the digitalization of both internal and external processes through technology. The overall aim is to help businesses improve their operations while combating the growing threat of cybersecurity disruption.
Where Does Digital Transformation Start?
For a successful process in digital transformation, the starting point has to be the customer. An organization must understand who its customers are, how their needs evolve, and what the company can do to offer them what they want. For example, companies would previously sell their products or services through advertisers.
In the digital economy today, they have the opportunity to sell to both the investor and consumer directly, hence, bypassing the advertiser. The aim should be to engage the end consumer directly.
Implementing Digital Transformation
After identifying who your customers are and what to offer them, the next step is to anchor the process on numbers. While the process is pervasive, it’s also very easy to get lost with all the initiatives involved. This is where it becomes necessary to define some business KPIs and anchor the process on them.
For example, you need to define whether the process should help you increase your revenue growth or gain higher consumer engagement. Alternatively, is it to help with customer retention or is it all about product upsell?
Having some numbers on which to anchor the process of digital transformation will help maintain the primary focus throughout the process.
Thirdly, there must be data on which to optimize the transformation process. With well-defined customers, it becomes a lot easier to customize the offering for each customer. This is only possible if data is available on how to solve customer problems and how to avail the data.
The importance of having these steps in place is that they impact on the organizational implication. Digitalization is cross-functional and not just about IT or marketing. It’s all about the many functions of the digitization process coming together. The big question here is how to organize the business to ensure the correct execution of cross-functional projects.
Once this has been figured out, next comes the two-speed strategy. This is where the upsides and downsides of digital transformation exhibit themselves, depending on the execution of the transformation process. If the individual digital projects are implemented as a big bang, the chances of failure are very high.
In other words, avoid trying to make the process too pervasive. Instead, focus on individual cases as opposed to implementing everything across the whole organization. The process of digital transformation is not without some challenges to cybersecurity.
Cybersecurity Challenges in Digital Transformation
There’s a degree of cyber risk involved with the process of digital transformation. Among the most significant challenges have to do with data management and ownership. There are many products utilized while making the buy-versus-build decisions. Since they are sourced from different vendors, they carry more potential to make the systems more vulnerable to attacks.
As such, tackling cyber risk becomes a task that stakeholders in digital transformation can’t avoid. New technologies introduced to the enterprise come with unique threat models. These must be well understood and managed before rollout.
The ability to reconcile data in meaningful ways after each partner system has been implemented can be further complicated. This calls for careful testing of inter-system communication, alongside robust certification of data-at-rest systems and partner infrastructure.
All the new technologies that come with digital transformation must be well understood and managed before their rollout. This helps in ensuring that the threats they present can be tackled. The role of Chief Information Security Officers would hence be to design and support new technology platforms on which the rollout will happen.
They also have to be aligned on the agenda and policies surrounding the transformation process. This is in terms of resilience, accessibility, and risk-modeling.
Lastly, a culture of security must be fostered. During the designing of interactions and training, caution must be taken to allow for successful, sustained innovation in the appropriate environments. In doing so, stakeholders will create workplaces that are not only more secure, but also more efficient.
Lastly, the process won’t be successful if customers aren’t prepared for it. It’ll be necessary for an organization to invest in frequent customer education to prevent surprises from the new interface or experiences. Through the training, they’re better placed to recognize and reject any potential attacks.
When all these challenges have been addressed, below are the advantages that digital transformation presents.
Advantages of Digital Transformation
Many businesses are still slow in adopting digital technology, mostly because of the associated costs. However, this worry is short-lived because here are the benefits that enterprises can gain by taking up the process:
- Employee Empowerment
Every enterprise wants to have a team of workers that performs faster, smarter, and more productively. The best way to realize that objective is to have innovative solutions that make it easier for them to communicate, collaborate, and exchange data without any restrictions.
Some solutions that have come with digital transformation like Microsoft Office 365 can help employees collaborate at peak proficiency. The features of Office 365, like the Focused Inbox, help the users focus on what matters most. The @mentions feature reminds you to focus on what requires attention while calling others to take action on their end within the emails.
Groups in Office 365 is another excellent feature that allows you to define specific teams and enhance their collaboration. Through it, you can share calendars, share notes using OneNote, and exchange files.
As competition continues to grow, it’s imperative to foster teamwork within the office. Progressive companies can’t deny the value of collaboration as it ensures information is well utilized.
- Improved Customer Engagement
Three main components of business growth and survival are customer satisfaction, loyalty, and retention. Positive customer experience is preliminary to customer loyalty, increased sales, and a growing customer base.
Your business must invest more time in identifying how to interact with customers at the right time and place. By understanding the customer’s journey and behavior, it becomes easier to create a digital plan using the right technology.
Make use of online customer relationship management tools. They come in handy in helping you collect contact information, customer purchase and service behavior, and business website behavior. These are factors that can significantly enhance your strategy of customer engagement.
Customers are using various channels to reach out to businesses. This creates a challenge in keeping up with all of them while offering them a fantastic customer experience. It’ll only take excellent customer data to deliver exceptional services. With the right digital tools, you’ll not only save yourself time but also run your business more efficiently while staying ahead of the competition.
- Enhanced Data Protection
Organizations are turning tocloud-based solutions for critical business applications, storage of data, and backup. Cloud solutions are managed and monitored in controlled facilities for minimal downtime and proper data protection.
If you’re thinking of moving your business data to a cloud solution, there are some considerations to make.
- Have a Data Security Policy in Place
Digital transformation may backfire on you if you don’t implement a data security policy. This is the blueprint that defines the approved methods of securely transferring or sharing data. It also explains the restricted methods applicable to stopping the use of unsupported or unsafe applications or services.
The policies you create should be very specific on what is acceptable and unacceptable on the digital platforms. They should include information on policies surrounding emails, social networking, mobile devices, and internet usage, and the policies should cut across the board.
For effective implementation of the policies, they should be documented, communicated several times, enforced, and reviewed periodically. Employees are always better placed to embrace policies when they are trained on their importance. This calls the need to set up meetings or sessions to regularly update and educate the team about the reality of data security.
- Gain a Deeper Understanding of Physical and Cybersecurity Controls
While embracing digital solutions, it’s crucial to understand the physical security controls and cybersecurity controls the service provider offers. Some physical security controls range from badges required to enter a building, fingerprints, multiple security doors, or surveillance cameras.
Cybersecurity controls include security services like network monitoring, firewall protection, and wireless security. Besides, you should consider having your data encrypted.
Apart from understanding the various security measures available, it’s also vital to understand the provider’s service level agreements for service availability. Take a step further and invest in learning more about their policies concerning data breaches and how they respond to such incidents. This is the only way to determine if a service provider is the right one for you.
- Digital Transformation Enhances Competitiveness
It’s undeniable that technology is changing the business landscape. Digital transformation is no longer an alternative but a necessity. For an enterprise to survive and stay competitive, it must adapt its technology and strategies rapidly.
The key to choosing the best technology is that it should work for your business. Whatever the size of a company, it should get started with a reliable digital transformation strategy. This is by choosing the right technology that helps meet the business objectives.
By introducing cost-effective and customer-focused digital solutions, business tasks become streamlined. This eliminates overheads associated with outdated solutions. As such, businesses can create new products and services that help them stay ahead of the competition. By focusing on what customers want, services are consistently improved, making the company more favorable among consumers.
Disadvantages of Digital Transformation
Digital transformation is all good, and the benefits it creates are enormous. However, the other side of the coin can’t be ignored, bringing us to the disadvantages. Nevertheless, they should not be a reason why you postpone or ignore the process of digital transformation. Here’s a look at some of them:
- Technology Comes with Cybersecurity Risks
Unfortunately, technology creates some cybersecurity risks as it becomes more advanced. Security is a necessity, but few people like to be confronted about it, yet they work with devices and platforms that make them vulnerable.
This is the reason why security should first come to thought in transformation and digitization efforts. Many organizations keep steering away from the issue of security, despite knowing it’s crucial.
Why is security an enemy of transformation? As you transform into more advanced technology, your staff gain access to the outside world. This means that they also open doors for outsiders to gain access to your place of business. For example, emails usually contain malware that can infect your systems.
Personal devices like USB drives and smartphones connected to business computers might infect them with a virus derived from another source.
Hackers and cybercriminals can steal essential files, as it happened to Sony after sensitive emails leaked. Equifax was also a victim of such an attack in which private information of millions of people were compromised through electronic snooping.
Cybercriminals may also introduce ransomware. It’s a type of malware that freezes up the system until some payment has been made to the hackers. In extreme cases, malware has been known to take remote control of business operations, crash electric utilities, interfere with police stations, and takeover computer-operated cars.
Why Cybersecurity Lags in Digital Transformation
There are many reasons why security isn’t catching up with digital transformation as fast as it should. It lacks a strategy to enable enterprises to transform and optimize.
The first reason is that security calls for strategy and prioritization, which many businesses haven’t given much thought to. This is understandable because security isn’t always easy, as it’s not just a matter of adding security controls.
Instead, it calls for prioritization of the most critical systems, processes and sources of attacks and vulnerabilities. In the internet-of-things, the risk of vulnerability increases with every new chance at technology. As such, security requires a strategy that is more than just adding a few firewalls.
Secondly, cybersecurity comes with specific security skillset challenges. It’s undeniable that most large organizations find it challenging to find the right security experts for particular applications. This is especially the case in digital transformation where loads of data are involved, and new technologies are involved.
Thirdly, the security parameter has changed and the attack surface as grown exponentially. The good old point solutions like firewalls alone don’t work anymore, especially in a digital transformation context — protection at the user level does, especially where mobile devices are concerned.
- Technology Can Be a Distraction
Technology is nowadays accessible to everyone who has a smartphone, desktop, laptop, or tablet. Through the gadgets, they have access to the world of the internet. Hopefully, this access should be used for communication and research, but unfortunately, this is not the actual situation.
The Internet can be a very powerful distortion that tampers with productivity. Employees are faced with the temptation to check the latest trends on social media platforms. Some estimates reveal that almost 50% of office employees spend at least an hour on non-work-related sites. Of course, this includes some darker distractions, including pornography and other illicit videos.
- Technology Creates and Destroys Social Boundaries
Technology has made communication with anyone anywhere possible. While this is an advantage, it can interfere with the ordinary dynamics of human interaction. For example, it could result in fewer employees showing up for meetings, with most of them preferring to take advantage of telecommuting options.
These capabilities, if well utilized, can improve productivity, but on the other hand, it makes people miss out on the more social aspects of a traditional company.
On the other hand, technology can destroy some necessary boundaries. The fact that it makes you and your staff reachable all year round creates very high expectations in clients. It makes them feel entitled to full service regardless of the time of day or year, which brings social boundaries crumbling down.
- Uncontained Enterprise Networks
In days not so long ago, businesses operated on contained networks and they hosted their IT equipment on-site. Some businesses still do this, especially those that handle very sensitive data. However, other companies use digital applications and have resorted to hosting their servers in the cloud.
The implication is that these companies’ networks are not contained and their connections can be publicly accessed. The use of digital technologies introduces the systems to potential hackers, making it possible for them to break through these defenses, hence, accessing company networks.
- Constant Changes
Through digital capabilities and all the technological improvements, the speed at which developers can update software has also increased. The technology of data has rapidly changed, and while this provides some advantages, it also poses a challenge in keeping up with security processes.
The increased speed in making changes makes it easier for security vulnerabilities to find their way into systems. Cybercriminals are also keeping up with these changes by continually coming up with new hacking methods. This means that security professionals need to work consistently and with a lot more effort to create new protection strategies.
Despite these downsides to digital transformation, the process remains a fundamental approach to taking a business to the next level. Those in charge of cybersecurity can take a few necessary steps to account for the effects of digital transformation. Some of these steps include
- Integrating security systems to help improve visibility into a network while managing a larger attack surface
- Use of applications and devices that have built-in security
- Providing training to employees
- Performing regular testing
- Automating cybersecurity practices
- Sharing threat intelligence
For effective implementation of these steps, it calls for a proactive, continuously integrated, and automated approach to security. Companies must also adjust their strategies as the threat landscape continues to evolve.
Digital transformation is a process that businesses can’t afford to ignore. The use of technology opens up opportunities for growth and business stability. Clients would rather go to a company that is technologically advanced than one that is stuck with outdated systems.
The concept of digital transformation is already producing tangible and real-world results. Some advanced processes have helped in predicting system failure before it happens, hence, helping in its effective maintenance. In the healthcare sector, for example, technology has helped in analyzing the success of specific treatment options alongside a patient’s genetic characteristics.
When approached through well-thought strategies, digital transformation comes with a myriad of advantages. It streamlines business processes, enhances customer loyalty, and enhances employee productivity.
However, the process is not without some downsides, the biggest one being increased cybersecurity risk. Technology also creates or destroys social boundaries in one way or another. Businesses need not focus on the disadvantages but on what they can do to ensure a smooth transformation process for the sake of business stability and growth.