Compliance – 7 Privacy Predictions

Compliance


Industry 4.0 is bringing about engaged regulators seen in the expanded use of technology by regulators and the changing laws. Examples of this expanded use of technology include nudges prompting people to pay their taxes timely and crowdsourcing for transportation improvement ideas.

In addition to the use of technology, there is an uptick in the laws related to technology, more specifically the Internet of Things (IoT). Laws are being redefined and restructured for relevance surrounding IoT. The global activity is seen in laws such as the EU’s General Data Protection Regulation (GDPR); Brazil’s privacy law, Lei Geral de Proteção de Dados (LGPD); and closer to home, state laws such as the California Consumer Privacy Act (CCPA).

Understanding probable outcomes related to privacy in 2019 helps direct company strategy. Incorporate each prediction in the article, “Data Privacy Day: seven privacy predictions for 2019” written by Jay Cline, Principal at PwC, as applicable, to guide a privacy strategy through 2019 and further.

7 Privacy Predictions

  • State privacy bill will outpace US national privacy legislation
  • Most companies will enter December unprepared for CCPA
  • GDPR enforcement will regain board attention
  • GDPR’s unintended consequences will slow foreign expansion
  • Brazil will be the next GDPR ground zero
  • Emerging tech companies will rise and fall on their privacy positions
  • Chief data officers will emerge as the new privacy technology and service buyers

Prediction 1: State’s such as New York, Washington and Hawaii have pending legislation. The author predicts the increased activity at the state level could be “the spear ….. that prod(s) Congress to work more urgently on national data privacy legislation.” In the last sentence of the paragraph, the author writes, “companies should take action on ‘no regrets’ privacy capabilities such as the right of data access and deletion for American consumers, rather than taking a ‘wait and see’ approach.”

Prediction 2: The law’s exemptions and ambiguities, in combination with, the inherent difficulty in understanding the complete framework of individual’s data across many systems in numerous storage scenarios, i.e. local and cloud, will prove too difficult to overcome by the compliance deadline of January 1, 2020. The author’s final thought on this prediction is, “The silver lining: companies that make a concerted effort to boost their CCPA readiness have a major opportunity to stand out from the pack.”

Prediction 3: A record uptick in complaints and breaches led to [EU] twenty-eight-member states concluding months long investigations. This resulted in high-profile lawsuits paving the way for private right of action; which is when a law creates rights, even though not explicitly stated in the law, known as implied rights. The wrap up to this prediction is increased enforcement occurring in the European privacy enforcement regulators.

Prediction 4: Drops in venture capital funding and declines seen in advertising market share, are two examples of negative economic consequences that resulted from GDPR. Mr. Cline states companies need a strategy to incorporate GDPR into expansion and acquisition plans in European countries.

Prediction 5: Brazil’s new privacy law going into effect February 2020 is vastly more robust than countries such as Canada and India. Wrapping up this paragraph, the author again focuses on the strategy of resources needed, like staff and budgets.

Prediction 6: A mad rush into Industry 4.0 with investments in artificial intelligence (AI), robotic process automation (RPS), and IoT will test privacy. Mistrust of these technologies will raise the expectation for getting it right the first time. The author’s final thought on this prediction is “Companies that develop responsible AI will gain first-mover advantages overcoming these obstacles and winning stakeholder trust.”

Prediction 7: Chief data officers will emerge to address data risks and opportunities. This is a new an undefined field. The visionaries will forge a comprehensive data strategy. Additionally, Mr. Cline’s last sentence is highlighting the necessity of privacy experts being a “technology maven”.

The article wraps up with this: “Who will be the winners if these predictions materialize? The first companies to embed automated privacy into their digital transformations — and the customers and consumers they serve.” Find the article here.

As evidenced in the afore mentioned article, privacy compliance in Industry 4.0 isn’t just about reporting to regulators. It is also about redefining compliance as a proactive tool not as a retroactive requirement. Privacy should be embedded within the framework of the strategy, overseen by a Chief data officer, and automated through digital transformation.

No Regrets Strategies

Compliance is more than checking the boxes and filing reports timely. It’s the willingness and desire to act morally without a specific rule. There are two no regret strategies of compliance to expand upon in this scenario: moral and proactive.

Moral compliance is about doing the right thing even without a specific rule. Proactive compliance is acting morally without specific rule and all the while anticipating a rule to be forth coming, and thus, prepared.

Real-World Scenario

Moving away from privacy and focusing on regulators, a real-world application on no regret strategies is next.

The scenario references multi-state employees which are employees that work across state lines. A combination of cumbersome and time-consuming laws exists to understand and report correctly. There are various scenarios of agreements, or lack thereof, between states regarding payroll taxation on multi-state employees. In addition, the amount of time spent in a state is, generally, the trigger for payroll taxation in a state. Each state sets the time trigger and are independent of each other. This combination creates an area in which there is potential for companies to not report correctly: unintentionally or intentionally.
In this scenario, moral compliance of a no regret strategy is to report payroll subject to taxation to the letter of the law by each state. Frequently a lack of resources and increased cost deter employers from reporting exactly as required.

Regulation Prediction

Proactive compliance within this scenario is to recognize the (probable) changes coming to multi-state payroll taxation due to the expanded capabilities of regulators via technology. Right now, gain an understanding of multi-state payroll taxation triggers.

Build a strategy from the information gleaned from the process. Glean information such as the monetized economic effect, including prior year taxation and fees, for unreported or inaccurately reported multi-state payroll; and peoples’ real and opportunity costs, like “putting out the fire” costs. Also, build into the strategy compliance as a competitive advantage.

For example, a very simple strategy aligning multi-state employees with states that are:

  • more cost effective to do business in relation to other states
  • in support of reciprocal agreements between states

The example is provided to highlight legal proactive compliance planning. No regret strategies can be realized throughout all regulatory compliance. No regret strategies including AI will result in maximizing the strategy, and at the same time minimizing risks.

Conclusion

Regulators are using technology to expand their touch. This is seen using technology such as crowdsourcing and the laws surrounding technology like CCPA. Technology is important to compliance. However, a hap hazard approach will result in mistrust from the community and continued way of doing business of “putting out the fire”.

Success with compliance in Industry 4.0 is embedded in a company’s strategy and includes the technological framework. Success is seen through proactive compliance planning resulting in trust creating a competitive advantage.

Get in Touch

Kelly Mattarocci bio photo

Kelly Mattarocci
Chief Market Creation and Compliance Officer
Founder
+1 512.649.1200
kmattarocci@tichplatform.com

Experience – Designing Customer Experience Strategies

Experience

More than 20 years ago Pine and Gilmore introduced the concepts of the Experience Economy and “work is theater and every business a stage”. Since then, technology has enabled experience first to become the expectation. Experience aligns collaborating and empowered employees and technology with customers. As technology continues to expand so does the experience first expectation. Like technology, this expectation isn’t limited to customers only. Everyone has become accustomed to experience first. For business, this translates to experience first for customers, employees, suppliers, and other stakeholders – anyone that interacts with the company. In this post, we’ll focus on customer experience.

Gartner’s 2017 Customer Experience in Marketing Survey reports that “67% of companies feel they compete on mostly or completely on the basis of customer experience, and 81% expect to do so in two years.” However, many leaders still struggle with integrating experience into their strategic goals to develop a sustainable competitive advantage or even keep up with their competition. In Industry 4.0, focusing on experience is imperative.

Experience first organizations leverage insights and data to create and execute impactful customer experience strategies and then design and deploy processes and technologies that improve customer experience and positively impact business outcomes. In order to gain buy-in from leaders and employees across the organization, the business case for the investment of time, money, or both must be clear.

Realizing experience must come first results in elimination, or at least minimization, of friction points – places that hinder or halt progress. To identify these points, understanding your customers’ journeys is critical – from before they’ve even heard of your organization, to how they learn about your company and make initial contact, through the sales process, service and/or product delivery, aftercare, and onto repeat sales. Everyone that touches your customers must understand that they are a critical part of your customers’ journeys, and that every interaction is an opportunity to add value to or take value away from the customer experience.

Developing this understanding should be accomplished through creation of key customer personas based on interviews and focus groups of customers as well as electronic data captured followed by customer journey mapping. Customer journey mapping identifies the touch points along your customers’ journeys including critical moments of truth that will make, or break, customers’ experience, opportunities for enhancements, and friction points, among other areas. Once a thorough understanding of your customers’ journeys and these friction points is developed, experience first organizations innovate to optimize interactions and increase customer loyalty.

Experience first companies also reskill existing team members to understand data and enable visibility and then empower them to make quick decisions, independently, to guarantee experience first. One organization we recently worked with empowered their call center team with predictive analytics about performance of service technicians so they could more accurately schedule service appointments. This led to a 219% increase in on-time appointment arrivals and a 27% increase in customer loyalty.

Another example is of a professional services firm that now provides clients with a detailed project delivery roadmap before the engagement starts to eliminate the fear of the unknown and promote proactive communication. It includes the roles and responsibilities of all stakeholders in each phase, potential pitfalls, and critical dates. This has led to an 31% increase in on-time delivery and a 6% increase in phase profitability after only four months.

Another experience first creator is internal innovation programs which encourage insight from within companies. In Industry 4.0, the enlightened organization’s core belief is that innovation should occur at all levels not just at the senior level; and can occur individually or within teams, including non-traditional teams.

A few examples of internal innovation programs are:

  • Regular availability (for any employee) to pitch plans to executives
  • Creation of an innovation stream with a budget for employees to create protypes of products and/or services

Examples of companies with internal innovation programs are Adobe and LinkedIn. Adobe’s innovation program is name Kickbox. “Kickbox is a new innovation process that Adobe developed for its own use and then open-sourced so everyone can use it. It is both a process for individuals and a system for deploying that process across an organization at scale. It’s designed to increase innovator effectiveness, accelerate innovation velocity, and measurably improve innovation outcomes. It can also optimize innovation investments by reducing costs compared to traditional approaches.”

Another example of an internal innovation program is LinkedIn’s approach which grants employees access to pitch ideas to its executives once per quarter. In addition, if the program is accepted, time is allotted up to three months to grow the program.

Last year we helped a professional services organization develop an internal innovation program after establishing the need for one during their strategic planning process. Our first step was to bring together a cross-functional team including employees from all levels of the organization to develop the structure of the program. Although this structure included an ongoing open call for ideas and concepts, we held a series of ideation workshops open to employees from all levels of the organization to kick-off the innovation program. During this workshop, one of their entry-level employees proposed development of a technology application to solve one of their target clients’ newest challenges. On the surface this may not seem earth shattering but this was a company that for its past 32 years in business sold ONLY services. Fast forward 10 months and this application has led to the development of a sustainable competitive advantage that has increased revenue 31% with existing customers and the profit margin on the application is nine times more than on their most profitable service line.

Across industries, acquiring new customers can cost up to five times more than retaining current customers. Experience first organizations invest and reinvest in and invent and reinvent delivering a superior customer experience. Amazon’s once innovative two-day Prime delivery has now become the norm amongst many retailers. Quantitative and qualitative customer data must be captured, analyzed, interpreted, and acted upon continuously in order to gain and keep a sustainable competitive advantage in the Experience Economy.

Get in Touch

Chandra Storrusten bio photo

Chandra Storrusten
Chief Value Creation Officer
Founder
+1 919.689.5050
cstorrusten@tichplatform.com

Office – 4 New Digital Realities

Office

The Fourth Industrial Revolution, known as Industry 4.0, is a revolution in business. The following quote is about Industry 4.0, “45 percent of the activities individuals are paid to perform can be automated by adapting currently demonstrated technologies” quoted from McKinsey & Company and can be found here. These technologies exist and they are affordable. In addition, much of the technology is easily and quickly implemented without a heavy load on internal information technology (IT) departments. This combination of attributes paves the way for quick market acceptance.

For these technologies to function as intended, digitalization is required. Digitalization is the process of using digitized information to change business models and create value. In other words, digitalization is a digital environment (no paper) in which the information is used for analysis, innovation, value creation, operations, and office administration. It is not about replacing people.

Digital efforts must be at the forefront of customers’ and employees’ acquisition and retention experiences. The goal of each interaction is a frictionless experience regardless of how an interaction occurs. Singular interaction points are not robust enough for this scenario. Multichannel or omnichannel are.

Multichannel options offer interaction through multiple mediums (channels). For example, multichannel options are reflected in accessing offerings through multiple devices and locations.

Omnichannel options offer interaction through multichannel options plus more. These channel options allow for on-demand support and services. For example, omnichannel options are reflected in chatbots and live support by employees.

Digitalization goes beyond no paper and channels. It is everywhere; in a physical office, home office, co-working space, coffee shop, or park and can be across town, across country, or on the other side of the world. This expanse of digitalization in conjunction with the Internet of Things allows for an interconnected ecosystem of consumers, businesses, and regulators. A digital strategy is necessary to successfully maneuver through this intertwined global system.

A digital strategy is a component of an overall company strategy; and aligns with and supports the overall company strategy. Like an overall company strategy, a digital strategy is translated into components, and ultimately actionable steps. A strategy’s components are interlaced with all other components constructing an ecosystem.

Ecosystems have long been a topic of management conversation; however, companies historically have not succeeded in in creating a seamless ecosystem. The lack of historical success is rooted in technologies not being readily available and affordable. This is no longer an obstacle. The technology of Industry 4.0 is precipitating evolution of this holistic approach.

Components of a strategy and all sub strategies are vetted to translate into actionable steps. Within a digitalization strategy, there are four components.

4 digitalization strategy components

  1. Diagnostic
  2. Operating Model
  3. Transformation Mapping
  4. Workplace

The diagnostics process identifies the strengths, weakness, opportunities, and threats (SWOT) from conception of digitalization continuing through its infinite life. The SWOT analysis quantifies how and to what degree, identifies root causes, and formulates actions where needed. In addition, viewing the SWOT through the lens of innovation breeds value creation.

The operating model builds the framework consisting of the details of the industry, people, technologies, and operations. Operating models in Industry 4.0 promote the optimal collaboration of people and technology focusing on value creation through empowerment and experience.

Transformation mapping identifies the touch points along your processes including critical moments of truth that will make, or break, experiences, innovations, enhancements, and friction points, among other areas. When done correctly, transformation mapping will help leaders engage with the Fourth Industrial Revolution.

A digital workplace spans virtual and physical realms with the goal of enabling a seamless collaborative work environment. A truly digital workplace brings together people with devices, applications, data, mobility, and collaboration tools tailored to each employees’ responsibilities and preferences on persona-based models instead of single services.

A revolution by its very nature fundamentally changes business. Digitalization is a key component for success in this new revolution, Industry 4.0. Digitalization realizations will result from a correctly executed digital strategy.

Remain open to the new realities to realize competitive advantages. Throw out the way “it’s always been done” business. Accept these new realities to fully transform.

4 new (digital) realities

  1. Technological ownership
  2. Interdisciplinary and inter-functional teams
  3. Normalize change
  4. Experience first

Much of the technology is easily and quickly implemented without a heavy load on internal information technology (IT) departments. New technologies are designed for the leadership along the value chain to do the “heavy lifting” and not the IT departments. This naturally aligns ownership with the new “heavy lifters”.

Interdisciplinary and inter-functional teams with an end-to-end view of impact are ideal for a digitalized reality. Understanding the digital journey through internal and external users lead to success within the new reality.

Change is to exist in a continuous form in companies. Project management and re-engineering disciplines are not designed to grasp a digital ecosystem. Transformation using these techniques won’t happen one day with the flip of a switch. Instead, project management and re-engineering are incorporated into every employees’ daily job functions allowing for continuous change.

Technology has brought about an experience first expectation and as technology continues to expand so does the expectation. Like technology, this expectation isn’t limited to customers only. As customers, everyone has become accustomed to experience first. For business, this translates to experience first for customers, employees, suppliers, and other stakeholders – anyone that interacts with the company.

Each of these new realities will emerge from the digitalization transformation. A lack of evidence of these realities is indicative of not truly transforming, but instead creating digital documents and still “pushing paper” in a digital form.

Conclusion

A digitalization strategy is made up of four components and each component is fundamental. New digital realities emerge with a successful digitalization strategy. Lack of evidence of these new realities is indicative of not truly transforming.

Digitalization is a first step in experience first with a goal of frictionless interactions. A digital strategy is designed as a component of the overall strategy with collaboration across all other sub strategies and their components. Digitalization is a key component of success in Industry 4.0.

Kelly Mattarocci bio photo

Kelly Mattarocci
Chief Market Creation and Compliance Officer
Founder
+1 512.649.1200
kmattarocci@tichplatform.com

Strategy – New Business Models Must Haves for Industry 4.0

Strategy Banner Image

Strategy upholds an organization’s mission, vision, and core values with a plan and operating steps to achieve success. Historically, strategies were long-term, often five or more years long. In Industry 4.0, long-term has a new meaning – three years or less. Strategy development and execution must be nimble. In today’s business environment, the operational components made up of people and technology are continuously dynamic and, therefore, both long-and short-term strategies must be modified as needed based on new information.

Business agility in Industry 4.0 is defined internally and externally as:

  • Attaining competitive advantages
  • Adapting quickly
  • Realizing experience first
  • Expanding production and innovation
  • Empowering employees
  • Fostering collaboration

Mobile technologies are widely recognized as a dominant force in the birth and development of Industry 4.0. In business, mobile solutions have proven highly successful in increasing productivity and engagement and reducing time demands from historically time intensive tasks for both employees and customers. Mobile technologies have dramatically increased the amount of data created every second all around the world and mobile has surpassed digital as the main way to access the internet (Source: Comscore). According to Fierce Mobile IT, 71% of employees spend over two hours a week accessing company information on mobile devices. In addition, almost 13 million text messages are sent every MINUTE of every day (Source: Domo). Nimble organizations must utilize platforms that enable them to make data-driven impactful business decisions in real-time that support their strategic goals.

Strategies in Industry 4.0 cannot be developed in a vacuum. They must be developed by cross-functional teams that includes leadership, management, and employees at various levels. The cross-functional and multi-level nature of these teams are critical to analyze the vast amount of data from different perspectives and provide reality checks on the resources (time, money, people, technology, and other resources) actually needed to accomplish goals. The diversity of the team also drives creation of innovative solutions that overcome organizational challenges. Having employees involved at various levels increases buy-in and engagement and fosters a culture of employee empowerment.

There is no “perfect” strategy. With new competitors entering markets daily; the increase in costs of recruiting and retaining talent, security, technology; and the regular complete disruption of industries by technology advancements, organizations face a constant barrage of new data. The information gleaned from the data creates the ability for organizations to focus on experience first and adapt their strategies quickly. Experience first is one of the few sustainable competitive advantages. Gartner’s 2017 Customer Experience in Marketing Survey reports that “67% of companies feel they compete on mostly or completely on the basis of customer experience, and 81% expect to do so in two years.”

Competitive advantages based on price or enhanced production can be easily replicated. Innovation in this revolution is seen in a temporal competitive advantage. A temporal competitive advantage is the window that exists when a company identifies a market, and then goes to market with speed and decisiveness until the opportunity is exhausted. Apple’s iPhone is a prime example of a technological innovation backed by experience first that created a competitive advantage. This differential advantage allows for significant revenue, dominant market shares, raving brand advocates, and outstanding profit margins. Non-adopters and slow adopters of experience first will lose competitive advantage regardless of how advanced their innovations are.

On the journey to developing a competitive advantage, establishment of strategic performance measures that align with the organization’s mission, vision, and strategic goals is critical in order for leadership and management to shift the culture towards results orientation and measure success. These strategic performance measures must be clearly communicated across the organization to ensure all employees understand what success looks like. The greater the understanding, the quicker organizations can learn which strategies are producing the desired results and adapt those that are not.

Strategic performance measures build on traditional key performance indicators (KPIs) to promote the desired outcomes and results. For example, traditional KPIs might include net revenue, revenue growth, and return on net assets – all lagging indicators and all financial metrics. Strategic performance measures build on these to include the “why” behind the importance of these lagging indicators and add in leading indicators, such as number of unique website visitors, number of products/services delivered on-time, customer satisfaction, and customer loyalty. Strategic performance measures are also consistently tracked and proactively reviewed regularly – monthly or even more frequently. Changes to strategies, if necessary, are made and closely monitored. Both results and modifications to strategies are distributed throughout the organization.

In order to measure the return on investment in any strategy, each one must have an associated budget. However, in Industry 4,0, these budgets are not dictated by the Accounting Department or based on a percentage of the amount of resources that were spent in the previous fiscal year. They are driven by the strategic performance measures established and are therefore adapted based on the value created by the results of each strategy.

Just like with experience first, as technology continues to expand so does the expectation of transparency. Employees’ satisfaction and engagement at their workplace now correlates significantly with their feeling of transparency in their interactions with management and leadership. Employees want to work for leaders that openly share their organization’s “why”, their goals for the future, and the organization’s successes and failures. In today’s business environment, customers also demand that organizations build trust with them prior to gaining their loyalty. When organizations have a history of transparency in interactions, customers are more likely to be forgiving if something challenging was to occur.

Just like strategies can’t be developed in a vacuum, an individual’s performance metrics cannot be solely based on individual performance. Collaboration is vital in Industry 4.0 and organization and team success must be components when evaluating an individual’s performance. The criteria for evaluation must also include tangible and intangible metrics that drive behaviors that are aligned with the organization’s strategic goals. However, these metrics must be objective and transparent to foster the best performance from all employees.

Organizations that develop strategies that uphold their mission, vision, and core values and then execute them in an adaptive and collaborative manner with an attribute of agility are, by definition, operating in Industry 4.0. Embrace this exciting new way to drive innovation and production in your organization to excel in Industry 4.0.

Get in Touch

Chandra Storrusten bio photo

Chandra Storrusten
Chief Value Creation Officer
Founder
+1 919.689.5050
cstorrusten@tichplatform.com