Companies will need to use data to improve agility and power innovation, accelerate AI to drive growth and unlock new opportunities through ecosystems and partnerships. However, companies will also have to prepare for the exponential rise in cybersecurity risks.
Use data to improve agility and power innovation
Data is a strategic asset. The largest companies use data to learn about their customers and employees by the second. And they get smarter just as quickly. This has all kinds of implications in terms of efficiency, cost savings, and customer and employee experiences.
Almost all businesses can use data to optimize operations. In the EY 2020 Tech Horizon survey, 71% of companies use insights from data and analytics to speed up innovation. In fact, it’s their number-one method of doing do so, ahead of re-engineering and automating processes (62%) and streamlining hierarchy (61%). And while companies generally understand the value data brings to their business, digital transformation leaders really get it: 83% are using data to help them innovate faster, compared with only 70% of digital transformation laggards.
Using data to optimize operations71%
of respondents use insights from data and analytics to speed up innovation.
Understanding the value data can bring83%
of digital transformation leaders use data to help them innovate faster.
Companies looking to take greater advantage of their data to innovate at scale need to first understand and respect the value data can deliver, make certain that the data is clean, of high quality, compliant and secure, and that it’s embedded into the heart of the business. Companies need to connect the “brain” of the business (the data) to the “body” (operations). A cycling company did just that to improve the economics of the sport of cycling.
Accelerate the quadruple advantage of cloud, applications, AI and robotics to drive growth
Companies are undertaking rapid transformation across their people, process and technology capabilities, to keep pace with the accelerating digital landscape. Cloud, applications, AI and robotics should form the heart of their enterprise technology transformation. Cloud’s agility and scalability make it the platform of choice for both infrastructure and applications. Applications enable interactions between businesses and their consumers, and within broader ecosystems and across multiple channels. AI allows companies to derive insights by simulating aspect of human intelligence and analyzing vast amounts of data. Robotics, when combined with cognitive technologies such as machine learning, speech recognition and natural language processing, allows companies to automate higher-order tasks that once required the perceptual and judgement capabilities of humans.
Digital transformation leaders understand that the promise of these technologies is about more than freeing up our time to think, or to increase efficiency. The real promise lies in its ability to augment and improve human intelligence by helping us make better choices.
The result will be a whole new way of looking at the world. A global consumer products company discovered this when they undertook their AI journey.1 Beginning with robotic process automation (RPA), which is the first step in intelligent automation, the company quickly saw growth opportunities where they could leverage robots, cognitive capabilities and AI to improve revenues. In deploying bots to hand certain processes, the company has improved the customer experience, freed up valuable employee time to focus on more strategic initiatives, and delivered ROI.
Digital transformation leaders understand the promise of new technologies is about more than freeing up our time to think, or to increase efficiency. The real promise lies in its ability to augment and improve human intelligence by helping us make better choices.
Prepare for the cyber risks
As a complement to the quadruple advantage cloud, applications, AI and robotics can offer, companies will need to add a fifth element to their enterprise technology transformation: cybersecurity.
Even before the pandemic, 59% of executives in the EY Global Information Security Survey 2020 (pdf) said their organization had faced a material or significant cybersecurity incident in the past 12 months. During the pandemic, the media has reported an escalation in incidents as hackers take advantage of organizations focused on addressing the crisis — from hospitals and health care providers, to law firms.
Pre-pandemic cybersecurity incidents59%
of respondents said their organization had faced a material or significant cybersecurity incident in the past 12 months.
On some level, companies should have been expecting and preparing for the escalation. Companies were adopting, on a massive scale and almost overnight, remote access technologies to enable work from home, exponentially increasing the attack surface. They were forced to rely more on cloud services to continue operations, making cyber resilience of a highly interconnected supply chain more challenging.
Meanwhile, rapidly changing customer behaviors and preferences in terms of interaction and expectations of trust drove a rapid deployment of digital channels to maintain competitiveness. In doing so, IT departments may have missed important risk assurance steps and exposed the broader ecosystem. This is hardly surprising given that only 36% of organizations say cybersecurity is involved right from the planning stage of a new business initiative. There may also have been a tendency during the pandemic to take data privacy less seriously, particularly in the context of the trade-off between personal privacy and societal interest.
Missed opportunities for cybersecurity36%
of organizations say cybersecurity is involved right from the planning stage of a new business initiative.
With the immediate needs of the business mostly addressed, companies now need to refocus their attention back to cybersecurity. They need to quantify the cyber risk they assumed during the pandemic, redesign business models and programs in a way that connects cybersecurity teams directly to the business and strengthens relationships that have historically been strained. Companies also need to re-engage their privacy protection efforts.
Privacy regulations, such as the EU’s GDPR, remain in place. And while customers and employees may have forgiven a temporary relaxation of their privacy rights in the short term, any compromise in the long term will erode their trust in the company’s brand. Rather than thinking of privacy as a compliance exercise, companies would do better to consider privacy protection as a form of value exchange. In exchange for the data consumers and employees share, organizations need to build trust by providing value in return.
Given the complexity and fast-changing technology environment, going it alone becomes an increasingly risky proposition. Companies will want to expand their ecosystem of partners to include cybersecurity and privacy professionals.
While there is no one-size-fits-all approach to cybersecurity or privacy protection, companies need to find a way to embed them into every aspect of their transformation journey if they want to maintain trusted relationships with their customers and employees, as well as the broader stakeholder community.
Customers and employees may have forgiven a temporary relaxation of privacy rights in the short term, but any long-term issues will erode trust in the company’s brand. Companies would do better to consider privacy protection as a form of value exchange. In exchange for the data consumers and employees share, organizations need to build trust by providing value in return.
Embrace ecosystems and partnerships
Pre-pandemic, customers were increasingly demanding personalization, convenience and great experiences. Post-pandemic, this trend will only accelerate. At the same time, as we mention above, cyber risks are proliferating. Companies are learning that they can’t meet all of these demands alone. They will need partnerships, but they must also challenge sector boundaries to become nimbler and more able to innovate at scale. We see this as online retailers partner with brick-and-mortar stores to offer customers a more convenient experience, and in global technology companies tapping into ecosystems of start-ups to fuel technology development.
Market analyst IDC predicts2 that by 2023 60% of the G2000 companies3 will have a digital developer ecosystem, and half of those enterprises will drive 20% of digital revenue through their digital ecosystem.
Digital developer ecosystem predictions60%
of G2000 companies, by 2023, will have a digital developer ecosystem and half of those will use it to drive 20% of their digital revenue.
Yet, although companies see the potential of a partnership ecosystem, there’s still some resistance. More than half (54%) of corporations retain a general sense of scepticism about the opportunities partnerships present.
A “do it ourselves” culture has prevailed in business for decades. In a digital world, companies must break free of this mindset and become more collaborative and open to partnerships, rapidly dis-assembling and re-assembling value chains. After all, no single company can be expert in all areas of digital technology or cybersecurity. Teaming with others is the only way to safely harness new technology to its full potential to drive human-centered transformation and innovate at scale.
In a post-pandemic world, technology at speed will be an imperative for survival
Technology is connecting every aspect of our lives, providing more opportunities to grow and innovate. However, it requires businesses to create sources of value beyond the bottom line – people value, social value and customer value.
Leading companies are already doing this by seeing technology disruption as an opportunity rather than a threat and reinventing themselves to unlock new sources of value. The good news for those that have fallen behind is that the pandemic has provided an opportunity to reset the playing field. In a post-pandemic world, all companies will need to accelerate their digital journeys by putting humans at the center, embracing technology at speed and innovating at scale if they want to create a competitive advantage and thrive in a future that is being remade by today’s crisis.
As the emergence of new technologies continues at pace, organizations adept at recognizing the opportunities presented by them will gain significant competitive advantage. Data will also play an important role in improving agility, powering innovation, driving growth and unlocking new opportunities via ecosystems and partnerships. But cybersecurity and privacy protection must be included at every stage of the transformation journey.