Allegations of Russian interference in U.S. elections through both cyber-attacks and paid social media trolls; hacks of autos, wearables and smart home devices; and the theft or loss of mobile phones, tablets and laptops containing sensitive or confidential data – all are the unfortunate side effects of continuing innovations in technology and the exponential increase in digital and mobile use.
Businesses must address digital innovation as a tool for growth while managing the accompanying risks caused by increased complexities.
1. Digitization. This covers digital business models for acquiring customers and improving the efficiency of back office functions, as well as digital tools, i.e. augmented or virtual reality, to improve the customer shopping, buying and service experiences. It also includes targeted marketing and customer service using social media. Big data and data analytics provide market intelligence and can increase productivity and efficiency. All must be developed with a plan to provide for secure communications and protecting the underlying data from theft, disclosure or loss.
Business assets are shifting from physical to intangible intellectual property. Internet of things devices are being deployed to improve productivity, monitor and communicate updates and status, or increase safety. What might be perceived as minor human errors or the failure of small components in larger systems can significantly impact highly complex digital tools and systems.
2. Employees. Consider employees using mobile phones, tablets and laptops to work remotely either from home on their own private Wi-Fi or network or in public locations using public Wi-Fi. Other factors are changing demographics, shortages of skilled labor, shorter tenure at a job and a global marketplace for customers and employees. Also, there’s a growing number of freelance, or gig employees, that work on-demand either on-site using company equipment or remotely using their own equipment. Care must be taken to secure the access and contents of mobile devices and Wi-Fi access using remote access/location software and virtual private network access. Talent with the technological know-how to shape and deliver digital strategies and management must be acquired, trained and retained.
3. Value chain. Customers, suppliers and utilities are becoming increasingly connected to the business value chain through information technology systems and cloud or physical infrastructure networks. Consideration must be given to the direct and indirect consequences of a significant business interruption, especially nonphysical damages, and the choice of an alternative supplier or provider with the ability to respond rapidly.
The loss of telecommunication and/or internet access for more than a brief period of time will significantly impact business. Access limitations to cloud data storage and the security of cloud data must be understood. Partners must understand and agree on who owns the data that is created and stored in the system or network and what rights other partners have to access and use the data.
4. Competition. The rapid speed of disruptive innovations may outpace the ability to compete. Customer preferences can shift rapidly and new companies may enter the market with new products or service models. The company culture may not encourage the early identification and escalation of risk issues. One must have an agile business model and a defined plan and process to stay informed of new market opportunities and emerging risks.
What’s next: Advances in artificial intelligence and machine learning, connected devices and the internet of things, automation and intelligent apps/software, mobile computing, crowdsourcing, block chain, and augmented and virtual reality. Promises of increased productivity and efficiency will make these technologies more common.
Businesses that proactively monitor and plan for both opportunities and threats will have a significant advantage over their competitors.
Richard Russell is general counsel of Ollis/Akers/Arney, an employee-owned consulting and insurance advisory firm. He can be reached at email@example.com.
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