For anyone who knows Target State, you’ll know that we talk about digital transformation a lot. This is because it’s a essential ingredient of growth and sustainability for businesses – impacting all areas of your organisation from strategy to operations, while helping to improve the employee and customer experience.
That said, it needs to be done well. That’s why identifying and mitigating potential risks should be non-negotiable.
When we look at digital transformation and risk management holistically, we gain oversight of the whole process which equips us to be proactive and considered. Much more attractive than putting out fires as they arise or solving individual issues in a reactive way!
Leave nothing to chance when embarking on digital transformation.
Let’s talk risks.
As your organisation starts embracing digital transformation to remain competitive and innovative, you need to know the risks that should be mitigated and managed. Let’s look at the top seven risks you need to be aware of.
1. Cybersecurity
Your expanded digital presence can increase the likelihood of cyberattacks, data breaches, or ransomware incidents. These breaches can compromise sensitive data, disrupt daily operations, and can lead to financial losses and damage to your reputation.
To address this risk, you need:
- robust cybersecurity measures
- to regularly assess your security processes, policies and procedures
- your employees onboard and using cybersecurity best practices.
2. Operational disruptions and downtime.
Technological glitches, system failures, or even inadequate training during the transition can create a serious hurdle to your productivity and customer experience.
You must have a contingency plan in place, be thorough in how you test your systems and ensure back-up for your critical operations.
3. External risks like pandemics, floods, and political uncertainty
Your organisation doesn’t operate in a vacuum. The last few years have taught us how precarious our old paper-based systems and ad-hoc processes can be. If you haven’t already, you need to seriously consider cloud-based technologies, hybrid ways of working and systems that provide data in real-time and point to a single source of truth.
4. Data privacy.
Mishandling customer data – either maliciously or by accident – can result in severe penalties and damage to your company's reputation. Businesses must navigate this risk with strict data protection practices, keeping up to date and adhering to regulations, and being transparent with customers about data usage.
5. Resisting change.
Realistically, change is rarely easy. It can take a while for organisations to be onboard with new technologies and new ways of working. Introducing new technologies and changing the way you operate can lead to confusion, anxiety, and pushback.
To mitigate this risk, you could have a change champion who steers the culture shift in the organisation. You also need a carefully considered change management strategy, which includes training, ongoing clear and transparent communication, and involving your employees in the decision-making process.
6. Change is not aligned with your vision and overall strategy.
Sometimes we chase change because its trendy; we’re victims of shiny object syndrome, or we feel the pull to appear relevant and innovative. But if you’re changing for those reasons, your success is likely to be shallow and short-lived.
To make sure your digital transformation is on par with your strategic objectives, you need thorough planning, an understanding of the parameters of your challenges, digital roadmapping to keep you on track, regular evaluation, and the right mindset to respond to changing business conditions and unexpected events.
7. Adopting Artificial Intelligence (AI) without critical thinking.
Like we’ve touched on before, it can be tempting to rush to AI platforms like Chat GPT to streamline and automate our work. But this must come with a caveat – is the output you’re getting from AI a solid reflection of your brand and vision? Are you accepting its answers without question? Artificial Intelligence can be a fantastic tool, but it still needs human input to make sure the answers are relevant, responsible, and a real reflection of who you are.
Also, we do run the risk of sounding like everyone else if we’re all using the same platform, so don’t sacrifice your personality and point of difference on the altar of automation.
Target State embeds risk management into every phase of your digital transformation journey.
By remembering and integrating risk management into every phase of the digital transformation process, you can successfully navigate technological change while protecting what counts – your people, reputation, data, and profits – while limiting downtime and disruption.
The great news is Target State can work with you every step of the way to help you reach your strategic objectives sooner and with much less friction and stress.
