Digital transformation enables organizations to better understand and manage the data they hold, and has now become intertwined with the concept of business agility. Our new 2020 Digital Transformation & Cloud Survey: The Future of Enterprise Data explores the links between digital transformation and the use of data through a global lens of respondents in legal, technology and procurement roles, across a large cross-section of major industries.

In this post, we draw out the benefits and challenges presented by digital transformation, as well as the key areas of concern relating to data privacy and cybersecurity, as highlighted in the responses to our survey.

The benefits and the challenges of digital transformation

As the effects of COVID-19 have accelerated the need for digital transformation across sectors, businesses now more than ever have to embrace technology and make it an integral part of business strategy in order to survive and thrive in an increasingly competitive landscape. When dealt with properly, digital transformation can help companies leverage new technologies to optimize workflow efficiencies, improve internal and external communications, and develop new business models to open up new revenue-generating opportunities.

While full of potential, digital transformation also involves challenges. Cost, complexity and internal disruptions can be major concerns for businesses undergoing – or considering – such a transformation. Some of the other challenges of implementing a digital transformation program cited by survey participants were:

  • issues surrounding the integration of new and legacy systems,
  • lack of clarity around digitalization benefits, and
  • lack of internal talent and expertise.

Our survey results also indicated that businesses with complex supply chains, costly infrastructure and existing legacy systems were most likely to run into issues when implementing digital transformation programs.

The importance of data privacy and cybersecurity in digital transformation

A cornerstone of digital transformation highlighted in the survey across industry sectors is data privacy and cybersecurity. Be it to preserve consumer trust, gain competitive advantage, or simply ensure compliance with legal frameworks, ensuring the security of data is central to implementing a digital transformation strategy. It is therefore no surprise that cybersecurity and cloud computing are tech investment hotspots, with 4 out of 5 businesses surveyed investing very heavily or heavily in cybersecurity.

The survey also showed that many companies are moving toward the use of private cloud services, suggestive of heightened concerns about data security, cybersecurity and disaster recovery and an accelerated adoption of remote working arrangements among businesses.

The survey findings also highlight particular concerns in many sectors that cloud agreements deal appropriately with  issues such as confidentiality, data sovereignty and data protection.

In particular, our survey results indicated that data residency requirements are top of mind for businesses, as these requirements can have a ripple effect on personal privacy, company security and international trade. Some businesses even reported that their cloud strategy had been directly impacted by data residency laws.

It is apparent from our survey results that the value of data to business is undeniable. Data is central in any modern successful technology strategy — whether it is in the storage, collection, protection, analysis or use of this data. Evidently, data security, ownership and privacy concerns act as both push and pull factors when it comes to the use of cloud. These considerations will need to be factored in as businesses prepare for all aspects of their digital transformation strategies, so that they can fully leverage the benefits of agility and innovation that a digital transformation can bring, while also minimising risk to the enterprise.

For more information and to view our full survey report, click here.

Author

Adam Aft helps global companies navigate the complex issues regarding intellectual property, data, and technology in M&A and technology transactions. He is the lead in Chicago for the Firm’s Technology, Media, and Telecom industry group.

Author

Peter George practices international commercial law and regularly advises clients, both on the buyer and provider side, on domestic and multi-jurisdictional sourcing transactions, complex business process transactions involving human resources, finance and accounting and other web enabled services.

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