Some enterprises are embracing digital strategies and are roaring ahead. Others are, well, nervous about the consequences. You can’t blame the nervous Nellies — let’s face it: the digital journey isn’t all sweetness and enlightenment. It’s a messy and disruptive process. Existing products may be cannibalized. Witness the pain many publishers are going through as they move from paper-based subscription models to online models. Employees’ jobs may be re-structured, or even eliminated altogether. Consider the changes call-center staffs are seeing, as more inquiry-based tasks are handled by bots.
Oh yes, and there are the executives in charge of it all. Their decision-making processes are likely to be upended, as they are asked to either show the data behind their decisions, or even defer more authority to data-driven decisions that may contradict their own.
Witness the pain General Electric is now encountering, which is now famously in the thick of transforming from an old-line industrial organization to software-driven enterprise.
With all the turmoil digital activities create, the risk managers in organizations — such financial officers, security managers, auditors — are likely to try to apply the brakes to slow down the digital journey. Is this a prudent thing? The folks at PwC have been thinking a lot about the inherent, obvious and not-so-apparent risks that come with digital transformation. They took a close look at the companies that learned to overcome the risks that come with digital activities, revealed in their recent survey of 2,000 executives.
The PwC team’s prognosis of companies that have overcome their fears of digital risks: “They’re digitally fit. They engage early in digital initiatives. And they’re digitally overhauling their own functions by staffing and equipping them with data-driven capabilities (including skills, tools and techniques), by serving up more real-time insights and by acting in concert with their functional peers to deliver a common view of risks.”
More than four in five of the risk-savvy executives, 83%, report they are “ahead or on track with their digital roadmaps” versus 57% of their more nervous counterparts, PwC finds. In addition, 72% of the risk-savvy enterprises are also “meeting or exceeding their expectations of improved customer experience,” versus only 45% of those less able to handle risks.
While the report is targeted at risk managers, the report serves as well-grounded guidance to those who need to overcome resistance and nervousness across their ranks as they step into the digital realm. The report’s authors outline six habits of successful digital risk-handlers:
They go “all-in” into their organization’s digital plan. For starters, there’s the question of what, exactly, “digital transformation” means. Beyond simply bringing in new technology or increasing efficiency, it means “new ways of solving problems, of creating unique experiences for customers and employees, and of accelerating business performance.” Companies ahead of the curve make their digital vision “actionable and measurable.”
They upskill and inject new talent to move at the speed of the organization. “It takes continual investment to keep skills fresh as technology evolves and to keep digitally skilled resources satisfied.”
They find the right fit for emerging technologies. “Emerging technologies such as AI, robotic process automation (RPA), and the Internet of Things are taking efficiencies to new levels.” Automate key functions to “free capacity and shift resources to be able to work on more value-added insights and analysis.”
They enable the organization to act on risk in real time. This requires well-governed, accessible and trustworthy data.
They actively engage decision-makers of key digital initiatives.“Continuously connect with stakeholders about the risks stemming from innovations.”
They collaborate to provide a consolidated view of risks. “The ability to correlate data points across existing and new data sources will lead to greater collaboration across the lines of defense and more dynamic risk identification, monitoring and testing.”
With digital transformation on the horizon for just about every organization, being aware of — and knowing how to deal with — its inherent risks is essential. Digital is risky, but shying away from digital transformation is even riskier.