Digital technologies, such as mobile, social media and the cloud, make it possible to collect and analyze data about customers’ needs and preferences, and use it to build stronger, more personalized, higher-value business relationships.
But while the abundance of customer data can help businesses succeed, it also introduces new and pressing risks. In the data-centric environment, failure to protect, manage and store digital information effectively can have major repercussions, from crippling regulatory penalties to long-term damage to consumer and stakeholder confidence.
To protect a business against data risks, it’s necessary to understand exactly what the regulatory obligations are, what kinds of security events routinely happen on the network, which data is most critical to the business and how it can be ring fenced to maximize security. Data risk needs to become a regular topic in the boardroom.
For truly innovative businesses, though, securing data is just the first step. The real opportunity is in unlocking new insight from data to transform the business. As well as “how can I protect my data?” the question becomes “how can I use it to increase my competitive advantage?”
The role of the “digital-ready” CIO
In making the transition from risk to reward, chief information officers (CIOs) have a critical role to play. As the person with the greatest visibility of information in the business, the CIO is ideally placed to release insight from siloed IT systems and put it in its rightful place at the very heart of the business.
The real opportunity is in unlocking new insight from data to transform the business.
With a visionary, digital-ready CIO, it becomes possible to implement digital technologies and big data strategies to support business transformation on the back of data risk management activities.
According to recent research from EY – Born to be digital: the rise of the digital business – this is exactly what more than half of all CIOs in technology-intensive industries are doing.
Reaping the rewards
Time and time again, EY sees the benefits of effective data risk management for business transformation. Across the consumer products sector, we are seeing our clients seek to harness customer data to migrate from a pure play, business-to-business operation to a direct-to-consumer approach, now capable of delivering targeted, real-time, geo-sensitive marketing and promotions to individual customers – wherever they are.
For another of our customers, a major global travel retailer, putting data at the heart of the business has supported a huge shift of sales from the high street to the internet, helping to reduce costs and increase margins.
The change is not restricted to traditionally consumer-focused industries. Power and utilities companies are now focusing on leveraging smart grid technologies to drive new consumer-focused ways of working.
Do you feel digital-ready, or are there steps you need to take to get closer? Watch this space for a follow up post.