There is no doubt the General Data Protection Regulation will change organizations worldwide, but is it really a catalyst for Digital Transformation?
Even though GDPR is a European-born regulation, it will change companies’ strategies worldwide, forcing them to get on the digital revolution road. Digital Transformation is not just a buzzword anymore. It’s happening right now, and businesses need to adapt to the new norms.
At the core of any digital transformation project lies data. Whether it’s internal, external or yet to be gathered, data is present in every part of a business. What differs from one company to another, though, is the way data is managed and used. This is in fact one of the causes of uninformed decision making and noncompliance.
What is Digital Transformation?
Digital transformation is the process through which companies change their processes and activities so that they fully take advantage of the opportunities brought along by digital technologies. The key drivers of any transformation are change in demand, technologies and competition.
Digital transformation is no different.
A global transformation
GDPR will affect organizations worldwide, so it’s safe to say that it will enable a global digital transformation. This is a bit of an overstatement, but let’s see why this might or might not happen.
As we mentioned in our previous blog post, in order to become compliant, businesses will go through more types of changes in the way they do business. These changes will either be an enabler or an impediment in digital transformation projects.
The General Data Protection Regulation is somewhat the “push” many businesses need in order to set their digital records straight.
- The “privacy by design and by default” requirement is pushing companies towards redesigning their personal data flows and security, and towards mapping their existing systems.
- Becoming GDPR compliant will force organizations to know exactly where data is stored at each moment. This can only be achieved through an efficient data governance program. This new data governance program will also benefit the decision-making process, helping reduce the number of flawed decisions due to lack of common understanding.
- As the General Data Protection Regulation requires personal data to be protected from loss or damage, encryption is one of the practices recommended in this sense. Businesses should have appropriate systems in place, capable of ensuring strong encryption.
- Furthermore, pseudonymizing is another recommended tactic for personal data protection, also requiring advance in current digital capabilities.
GDPR as an impediment
- If businesses don’t already have a data governance strategy in place, or have a poor one, becoming compliant will require considerable efforts on behalf of the company.
- It is possible that businesses’ struggle to adapt to the General Data Protection Regulation will make their digital transformation process a slower one, therefore becoming an interference.
- Implementation of the GDPR might put on hold or delay the development of other innovations such as AI and VR.
Overall, companies’ efforts to become GDPR compliant will translate into increased technological capabilities and an acceleration of their digital transformation process. From a competitive point of view, seeing competitors accelerate their digital transformation processes will make more businesses increase their efforts, if they wish to keep their competitive edge.