The digital world challenge: Are you ready to step up?
We live in times of disruption. Studies show that by 2020 nearly all the world’s adult population will be connected, with dozens of sensors and other connected devices per each human being.
Hand-in-hand with this phenomenon, we see the emergence of tools such as big data, cloud computing, virtualisation that not only substantially reduce the cost of data handling and storage, but perhaps more crucially, provide the tools and the means to extract new value out of data, triggering all types of digital services.
No industry will be left untouched – from the traditionally “high tech” sectors such as telecoms, finance, retail or healthcare, to other sectors such as transportation, agriculture or mining, to name but a few. This is because we are fast reaching a full ‘digital world’, with increased blurring between the digital and the physical. As BCG* aptly describes, we are rapidly approaching the celebrated Borges Map; a fictional map conceived by the Argentinian writer Jose Luis Borges in 1946, designed with such painstaking detail that its scale was 1:1.
Similarly, every entity in the physical world will soon be represented in the digital world. The fact that this utopian ideal is being approached tells us how disruptive, transformative and far-reaching the digital world and the digital transformation we are living through is, says João Resende, VP for product development at WeDo.
This brings tremendous opportunities for companies, but also generates new threats, risks and unknowns. Indeed, shareholders want companies to exploit these opportunities, engage with disruptive innovation, while simultaneously, wanting the businesses to stay predictable, profitable and reliable. In short, shareholders want clean and tidy innovation!
This is a tremendous opportunity for areas such as Revenue Assurance (RA) or Fraud Management (FM) to step up, to reach further, ensuring companies are able to reinvent themselves, while coping with the wider risk profile, and not losing control of their businesses.
Indeed, companies need to extend and reinforce their Assurance function. They need wider and stronger competencies, protecting customers, assets, contracts, processes, as well as revenues and margin!
This has tremendous implications on the company culture and strategy, and requires empowered and skilled teams alongside three axes:
1. Master Data-Sense Skills.
Firstly, data driven digital services teams need to master the skills and tools required to make sense of data, exploiting and extracting the most value out of the data. They also need to leverage all the data available within, or external to, the enterprise. This includes data lakes or storage repositories with interesting data such as customer interactions, call signaling, routing and DPI information, systems access logs, competition public data, social networks and customer sentiment, security intelligence etc.
Teams need to adapt to the new challenges that the all-IP paradigm brings, by increasingly thinking in innovative ways and collaborating between departments (e.g. security, fraud and RA), or between different companies (e.g. sharing fraud intelligence cases), to be able to grasp the new exploitation and arbitrage schemes that appear (e.g. OTT bypass). They must also not forget the speed and exponential nature of digital services and data enabled processes, where detecting, diagnosing and predicting quickly and rightly becomes critical.
2. Cope a wider risk spectrum.
Secondly, Digital Services bring into the table risks that are new, more important and diverse in nature, that need to be tackled. As Digital Services diversify into mobile money, cloud services and M2M, the risk exposure increases as well (e.g. think about the risks associated with money-transfer or health-monitoring related services). Also, as services convenience rises, more and more information needs to be gathered from the customer, thus increasing the risks associated with data protection and privacy management.
In many cases, these offerings become more complex and rely on more intricate supply chains, with several different parties involved, again, raising complexity and risk. In particular, we need to note that several digital services no longer hold low or zero marginal costs, which makes margin assurance becoming critical.
3. Strive for the whole, bridge across the silos.
Third and lastly, the digital transformation requires a holistic approach to the enterprise, the ability to bridge through business and system silos. Business segmentation alongside wholesale, residential, SME or corporate, several commercial-off-the-shelf and bespoke solutions at different stages of maturity, coverage and integration, all contribute to silos, segregated clusters of practices, systems, data and reporting. The need to bridge these silos and have a consolidated view of the whole enterprise becomes paramount.
Customers increasingly expect to be able to do things quickly, simply, and on the move under an omni-channel paradigm, where they feel that the various channels’ experiences and processes are connected, continuous and consistent, not isolated realities. This requires additional attention to be given to each channel to ensure consistency and integrity of data, transactions and experience.
Indeed, as organisations grow and go through M&As, internal complexity tends to grow and more and more attention on the business processes is required across the enterprise: procurement and suppliers costs, HR, travel and benefits, partners and sales force incentives and workforce management. With all of this occurring under constant business reinvention, where transformational projects multiply and where strong change management monitoring is vital and control becomes vital.
Digital transformation puts companies on the spot, as they need to reinvent and transform themselves in order to innovate successfully. For that, they need Enterprise Business Assurance (EBA) teams to step up their auditing, risk management and continuous control of their business and operations. This requires superb data skills, ability to cover a much wider range of risks, having the whole enterprise and all its business processes under control.
Are you ready for the challenge?
* BCG Perspectives April 2015, Navigating a World of Digital Disruption, by Philip Evans and Patrick Forth.
The author of this blog is João Resende, VP for product development at WeDo.
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