Out-Law Analysis | 14 May 2014 | 2:33 pm | 3 min. read
Many companies and public sector organisations are developing digital strategies that flesh out a plan and timetable around introducing new technology into their organisation. Well defined and implemented strategies can allow organisations to transform consumer experiences through innovative new services, improve employee engagement and streamline business processes.
However, in the push to innovate, there are risks in delivering technological change. general counsels (GCs) have a critical role to play in assessing those risks and enabling digital transformation.
The digital strategy
Consumers and employees are driving demand for technology in an unprecedented way. Many companies and public sector organisations are developing and/or refreshing their digital strategies on an ongoing basis – the pace of technology change demands continuous improvement and innovation.
With an improved economic picture and concerns about the openness and interoperability of legacy systems, digital strategy is driving the implementation of new digital programmes and projects. In order to bring and drive change, new 'digital strategy director' and 'chief marketing officer' positions are being created at "c" level.
Risks present in delivering on a digital strategy
The dynamics of developing and implementing a digital strategy and the risks associated with this are complex and nuanced. Digital technology is characterised by its connection to customers and employees, whether it is the collection of big data and analytics to inform company decisions, or new technologies improving customer choice and an enhanced online customer experience.
Digital strategy can be extremely broad. It can greatly enhance company revenue, activity and productivity in many different ways. The opportunities and threats of market disruption are well known, which explains the high interest around digital strategy in the boardroom.
However, the online world carries much greater risks, in particular the risk of security breaches and service downtime. In the age of social media, customer complaints are highly visible and negative perceptions about products or services can spread quickly to a significant number of existing and potential customers. Sensitive PR responses are vital to minimise any negative impact.
Digital 'brainwaves' in the board room and mitigating against associated risk
Each board member has a role to play in helping organisations create and deliver a digital strategy. The development of a digital strategy by senior executives is likely to lead to a proliferation of new initiatives and projects involving business change and technology implementation. History has taught us, though, that badly planned and scoped projects of this type with poor stakeholder ownership and engagement have a high propensity to under-deliver and sometimes fail. The operational and reputational damage which such project failures can cause is considerable.
GCs have an important and strategic role in shaping and delivering change programmes and projects.
They are already fully engaged with some of the challenges of the online world and will often attend risk and audit committees where the executive board level strategies are considered. In regulated industries this role is reasonably well defined. Outside regulated industries, particular incidents which hit the board will involve the GC.
We consider that GCs have a critical role to play in enabling digital transformation programmes and that at the outset there are a number of things GCs can do to ensure the success of those projects:
We consider this to be a good starting point. Input at the beginning is critical as with any new development. To ignore the legacy technology and the contractual and sourcing environment is likely to prove very costly in the short to medium term.
Clive Seddon is a TMT partner at Pinsent Masons, the law firm behind Out-Law.com. Pinsent Masons is hosting a series of free Out-Law seminars on the subject of 'legacy to digital'.