Digital dependence: How to balance speed with control? has been saved
Digital dependence: How to balance speed with control?
Many organisations have become digital businesses overnight with significantly more reliance on digital technology, digital ways of working and new digital distribution channels. Getting this right now could be a key step in evolving more meaningful engagements with customers in the longer term. But, this introduces a number of risks that you must manage to support customers, business partners and to enable you to react to the rapidly changing external marketplace with speed and control.
We are becoming more digitally dependent, fast
The increased dependency and demand for services delivered via digital channels in light of COVID-19 is likely to continue even when the current restrictions abate.
Whilst the long term implications are not fully understood, lessons from the Chinese market show that, amidst the crisis, consumer interactions significantly shifted from physical to digital. Whilst longer term trends are still unknown, organisations better prepared for digital engagement and commerce were less impacted during the COVID-19 disruption.
Accelerated delivery can increase your digital risk exposure
While digitisation is already associated with more rapid software development and agile ways of working, the current situation necessitates even greater speed to market to ensure customers – including potentially vulnerable customers in self-isolation – continue to have access to core services (e.g. online banking, grocery shopping, repeat NHS prescriptions).
To respond to this, you should be aiming for speed over elegance – one of the five fundamental qualities of resilient leadership1 – in order to ensure prompt and necessary action is taken. To achieve this:
- Acknowledge and accept there will be many “known unknowns” which cannot be accounted for in the coming days and weeks ahead.
- Take risk based decisions using available information and ensure these are reviewed when the current crisis abates.
- Expect and plan for some degree of controls compromises to be required.
- Ensure the potential risk impact is properly understood and recorded in order that it can be addressed down the line.
Failure to do so can expose your business to new digital risks as well as ending up being more costly in the end with potential long term brand and reputational damage.
Some challenges include:
- Building robust digital ecosystems: Leading digital ecosystems make use of ‘best-of-breed’ third party components that can be readily integrated. In the current environment where speed is key, third party risk management may be fast tracked leading to cyber risk (e.g. increased exposure to unidentified vulnerabilities in the party control environments) and operational risk (e.g. increased service downtime due to poor/rushed integration with third party components).
- Maintaining good customer experiences: By trying to quickly roll out new mobile apps or online channels to meet new demand, you can expose your company to reputational risk and potential regulatory scrutiny by providing a poor or reduced customer experience2. Alternatively, if you get this right you have the opportunity to build brand loyalty and increase market share.
- Managing levels of technical control debt: In the pursuit of speed and agility, some level of technical debt is a cost of doing business. Stripe, an online payments platform, estimates that developers spend about a third of their time on technical debt and a further 9% fixing bad code3. However, in an environment that necessitates an even greater need for speed, there is increased likelihood of delivery teams having to “cut corners” and adding to ever-increasing levels of technical debt in the live environment.
How to achieve speed with control?
As the current situation continues to develop it is important to remain pragmatic in your response. Although these challenges are complex, there are a number of practical steps to take:
- Rapidly assess your digital risk exposure to prevent issues occurring when you are at your most vulnerable.
- Prioritise core services and offerings and create/adapt new digital routes to market
- Manage the risks arising from a newly digitised remote workforce including, cyber, people and operational risks.
- Enhance controls across digital channels to ensure key risks are mitigated.
- Resolve control compromises made as part of the initial “crisis management” response and assess impact on risk.
- Review and extend successful digital offerings.
- Establish a new controls operating model (including frameworks, teams, culture and systems) to reflect the new digital world and replot the balance between speed and control.
- Manage governance of the cloud and other digital technologies used to enable digital transformation.
Even under normal circumstances, ‘being digital’ requires a new understanding of digital risk and exposure (including cyber, regulatory compliance and conduct risk) that in reality, many organisations find difficult to achieve.
In response to the current crisis, organisations that recover and thrive in the longer term will be those that take steps to quickly respond to these challenges to build digital advantage in the long run. Explore more in our Digital Risk framework.