01 Jan 2019 Ankit Chadha

How do you manage the risk of digital transformation?

Risk Of Digital Transformation | TRC Consulting

Digital transformation may be defined as the process of application of digital technologies and methodologies to different aspects of business execution so as to deliver simplified, faster and hassle free customer solutions. These are causing major changes in the ways in which organisations conduct and govern themselves. Organisations across the globe are adopting technology and moving away from their traditional ways of process management and governance.

Different avenues for digital transformation

Key technologies like Cloud, Internet-of-things, mobility and artificial intelligence are the new ways of digital transformation. While the benefits of digital transformation are enormous, it has its own share of potential risks too. A few effective ways to manage risks associated with digital transformation are as follows.

How to manage risk of digital transformation?

  1. Understanding threats to business: It is of utmost importance to understand the digital risks to which one is exposed. For example- An Organisation depends on an outsourced partner for a part of their execution. It would be important to evaluate the risks associated with the said outsourcing and further the mode under which the outsourced partner operates. Risk is associated if the outsourced agent further outsources to some third party would further increase the risk exposure.
  2. Data security and privacy are the most important considerations. Data security could depend on factors such as Laws and regulations of the zone where the work is outsourced. It would also be dependent of the type of industry or industrial practices. Data sets here would include both external customer information as well as internal data sets.
  3. Monitoring of unwanted exposure: Digital transformation cannot be considered as a “one and done” project. Evolution of organisations through innovation and application of digital technology is an ongoing process. The following need special consideration:
  • Managing dangers or losses arising due to obsolete technologies and technology failures.
  • Ensuring complete confidentiality. Unauthorised usage or access should be restricted.
  • A check on operations. Key activities like data classification, data processing, data retention and data encryption which may interfere with an Organisation’s execution of day to day operations need to be kept under special vigil.
  • Creation of audit trail acceptable to geography wise authorities (https://en.wikipedia.org/wiki/List_of_regulators_in_India) for enabling investigation if a fraud or security breach occurs.

There is a constant need for organisations to critically consider investments on security. There is an extreme need to develop an ability to anticipate security breaches and threats before any such occurrences and developing solutions to head them off. Investments made in external cyber security expertise aids with  addressing complex challenges introduced by digital transformations. Companies investing in designing security measures should continuously work on tracking and reporting the performance of their security systems and the corresponding control in the security systems so designed.

Execute in interest of protection: Most important measure in this regard is to establish robust measures in and around cyber security. Block chain architecture should in place for security against external and internal threats. A governance framework needs to be established to manage risks associated with digital programs implementation. Strategy for handling digital risks needs to be worked out. Having an authorization and authentic mechanism effectively applied to all digital enablers further works in favour of increased protection. Integrating systems for creation of unified system architecture, sharing threat intelligence with all in the Organisation, ensuring safeguards adopted work across the network and automating most of the security practices are a few more measures which may be adopted for ensuring protection.

Ensure reliability even in case of unforeseen contingencies: For Organisations with increased dependence on technology, the chances of collapse are far higher in event of technology failure. Organisations need to work on areas like disaster recovery, business continuity, crisis management and cyber resiliency.

Technological advancements and digital transformations will result in exponential growth of data being generated in years to come. This would require all establishments to work out more trusted, secure and seamless processes of data flow to ensure no gaps in protection. Adhering to best practices like automation and integration would definitely help security challenges and ease the stress associated with digital transformation. If you’re looking for a trusted knowledge partner for your digital transformation needs, then we’re here to guide you!

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