Key Considerations for Digital Transformation
Has your company begun its digital transformation journey? If not, now is the time to take that next step. Adopting modern technologies and leveraging the power of Big Data is critical when it comes to transforming how your business operates, both internally and in how you engage with customers, vendors and other third parties.
However, many firms are held back from true transformation due to systems and departments that fail to communicate with each other, legacy infrastructure, incomplete or inaccurate datasets, and/or broken workflows. Digital transformation can remedy many of these issues, but only if approached as a way to reach business goals, rather than as a series of small, disconnected solutions to individual problems.
How to Begin Your Digital Transformation Journey
The biggest obstacle to digital transformation success is non-acceptance from the C-suite. CIOs and CTOs are fast to realize the benefits of digitization, but CEOs, CMOs and other executives may need convincing.
When presenting a digital transformation plan, advocates must understand pain points and come in ready to lay out a solution and game plan. The sponsorship of the C-suite is crucial to transforming the culture and getting the rest of the firm’s employees on board.
Achieving full firm buy-in will require getting clear info from employees on how they currently do things, so you can find areas to improve on. A plan with multiple phases all focused on the overall goal is best; little changes over time carry proof and improve lives, making your firm more secure while you build trust in the process of transformation.
Choosing the right platform is a vital step in digital transformation. It’s common for executives to jump on each new platform or solution as it is presented, but one of two things often happens: the solution isn’t a good fit, or it is never implemented fully. In either case, expenditures are made on a solution that will never be effectively leveraged for ROI.
As-a-Service (aaS) is looming larger and larger as firms embrace digitization and the cloud. While finance has been an industry slow to accept letting go of legacy infrastructure and costly on-premise hardware and software, the advancements in technology and cybersecurity are slowly making a difference.
In the past, in-house IT teams including coding experts and developers were required to create, manage and troubleshoot systems. The run-of-the-mill employee was excluded from any real involvement in these processes, simply because of the complexities involved.
Today’s aaS options have led to the rise of the citizen developer, and it's now incredibly easy for almost anyone in your firm to work with the many solutions available, including:
Infrastructure as a Service (IaaS)
Platform as a Service (PaaS)
Software as a Service (SaaS)
IT as a Service (ITaaS)
Cloud-based servers and software, mobile applications and remote IT support all provide ample room for experimentation, and configuration is now as easy as “plug and play” for many platforms and solutions. Although this helps firms move toward digital transformation more fully, and removes many of the barriers causing resistance to change, a new set of challenges becomes clear.
The pitfall of easy-to-use, intuitive applications is that while they make it possible for your firm’s employees to develop and launch their own environments within your network, they also present new security vulnerabilities.
It’s tempting for investment professionals to dive headfirst into creating their own solutions, but without an understanding of the security issues involved, your firm (and investors) can be opened up to additional risk.
It’s critical to create guardrails with DevOps, and set boundaries for data access and use. Carefully monitor who has access to what data, look at why and when they utilize that access, and how they manage and use the data.
Limits can prevent overuse of paid data sources and also restrict people from taking data out of the system or accidentally overwriting it. Make sure people aren’t using open source code that could present vulnerabilities, and address the issue of in-house code development as a property owned by your firm.
When adding tools for data access, look at processes to allow data to flow more synergistically. Choosing the right system is key, but the governance side means you may need to keep access to certain data types in house. Prevent accidental exposure of data by segmenting your data based on sensitivity and applicable regulatory oversight.
There is an enormous amount of power that comes from leveraging aaS options and working with third-party vendors, but if your firm’s employees are working in the cloud without a full understanding of the risks, they can cause damage unintentionally.
Identity management must be consistent across platforms. Access locks can be aggregated for simplicity to ensure all data access is confined to people who are authorized. Centralizing identity providers and securing how people connect to applications is key to securing your whole environment.
Vendor Selection Process & Third-Party Risk Mitigation
Your vendors must have the same commitment to security as your own organization. Start by doing a background check on vendors, and determine if they meet the risk profile of both your firm and investors.
Due diligence should include a questionnaire designed to see if vendor security protocols align correctly with your own, but these cannot be the sole factor in decision-making, as answers can vary depending on who in the vendor company is answering them. The goal is to ensure vendors are handling data properly and have correct controls in place.
You can classify vendors and assess risk based on the type of data they access. Not all vendors are equal in their value to your organization and the amount of access they need. By correctly classifying and segmenting your data, then matching vendors to the correct datasets, you can mitigate third-party risk.
As always, your core long-term strategy should be the driving factor behind every move you make for your firm. Before you make each vendor (or application) selection, ask how they specifically solve a real business issue. Don’t “do tech for tech’s sake.” Be business-centric and leverage each addition to its full potential, or you’re wasting time and resources.
Are you ready to take your firm or fund further down the path of digital transformation? Let us help. We can perform design and discovery, and help take on the burden of security as you move your organization deeper into the cloud.