The risks and opportunities to leveraging technology and data
We are in the midst of a digital revolution, with technology consistently evolving and providing enhanced features and functionality for both customers and employees. Middle market companies must proactively leverage technology and data to achieve business goals and stay ahead of competitors that are continually adopting new innovation. However, companies must be careful when implementing new initiatives because technology is a double-edged sword; it is central to growth, but can also introduce new risks.
Now more than ever, companies seek to transform their businesses through digital technologies, protecting their organization and predicting the future. Ultimately, the goal is to improve experiences, maximize relationships and drive operational efficiency, while integrating more data insight provides stronger decision-making to guide the business. Unfortunately, while continued innovation is a necessity, businesses must understand potential data privacy concerns and evolving data breach threats.
Research shows that more professions are introducing automation. In fact, a recent Oxford University study indicated that in the next five years, 47 percent of U.S. jobs will be disrupted due to advances in artificial intelligence. We are already seeing it in several industries, from manufacturing and transportation to fast food. Opportunities to improve processes through digital technology are emerging quickly and will only continue to present themselves in the future.
Opportunity vs. risk
When companies seek to make improvements to digital capabilities, they should first look at who they are trying to impact: customers, employees, shareholders or public perception. And then they should consider how to address that audience: how personalized they are, how they engage, how well they predict outcomes and how agile they are. Every business is different, and potential technology solutions depend on what issues the company is trying to solve. For example, many companies want to improve their talent experience, strengthening both efficiency and employee satisfaction. With recent innovations, several technologies can solve that issue.
Today’s customers and employees can sense if a business has a lack of technology. For example, organizations of all sizes can personalize interactions with clients with the help of customer relationship management (CRM) solutions. Becoming more engaging by understanding customer buying practices and employee habits typically leads to greater success. However, if the overall technology experience is deficient, the business could lose customers or employees to competitors.
While thinking about innovation, businesses must also understand risk management challenges. Given the amount of breaches that occur, it is clear that many organizations struggle to keep their data secure. In fact, many fail to detect a breach until months after the fact, creating extended exposures that result in harmful losses of key company data and records.
The main causes within many breaches are human error and control deficiencies, and those issues can become more pronounced with new technology investments. Middle market companies are often popular targets for hackers because they are big enough that they have valuable information, but they are small enough that they may not have the protections of larger companies. When leveraging new innovations, organizations must implement effective training programs for employees and design thorough controls to reduce any vulnerabilities.
Regardless of industry, companies must have deep conversations about the technology competitors are using, and how they can innovate. At the same time, conversations must occur about risk and controls and how to create a secure environment.
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Collecting and analyzing data is critical for success in today’s business environment. The desired result of implementing new systems and technology should be a more comprehensive data platform to shape the direction of the business.
Having a function that collects, connects, interprets and obsesses about enterprise data for the leaders in the organization is critical to improving performance. For example, consider the impact this trend and shift has had on major-league sports organizations and how they select and manage players and talent.
While all data is important, predictive data can provide the most significant and tangible benefits. As businesses collect more predictive data, they can project specific business outcomes and make more informed business decisions further into the future.
In addition, companies should ensure that security, privacy, processes and controls are in place to balance risk management and innovation. Risk management is not a single point in time; instead, a comprehensive plan includes continual improvement and monitoring, employee education, having the right systems and performing the right tests. However, companies must understand that today’s ecosystem of digital technology is making those processes increasingly complex.
Digital transformation is no longer an option, but rather a necessity to remain competitive, innovate and grow the business. Enhanced data analytics capabilities enable informed decision-making, a better customer and employee experience, and delivers deep insights across the organization.
Middle market organizations need to consider how effectively they are harnessing the power of technology and data. By building a strategic technology road map, an organization can properly align business goals with technology initiatives to help drive those objectives. And, as always, part of that road map should include effective risk management and mitigation processes and controls to ensure the technological advancements are not offset by data security setbacks and breaches, and maximum enterprise value is delivered to the organization.