Digital transformation and Legal Compliance are Not Incompatible

The words “digital transformation” are everywhere. It seems like it is in competition with others for the best buzzword of the decade. This being said, these words represent way more than your typical buzzwords. Some even call it the “fourth industrial revolution”. This transformation should indeed be called a revolution, to better catch the magnitude of the change required. It seems obvious that implementing more and more digital solutions throughout businesses and operations will lead to higher quality and productivity, accelerate innovation, improve customer satisfaction and even open the door to new business models. The impact on the business's profitability is undeniable. One recurring question deals with how we can make giant leaps in the digital front while ensuring full compliance with the new databases, tools, and platforms we are developing.

GO DIGITAL OR GO HOME!

Most companies and organizations in 2022 have already started their digital transformation. It is not the next “nice to have” program your company should consider, but a clear differentiator and even a “must-have” should you want to stay in the race with your competitors. Many leaders have understood this concept and translated it into their roadmaps and strategy. However, as digital technology becomes more widely used, it can dramatically increase the risks businesses face to compliance issues.

DO YOUR HOMEWORK

The requirements related to any digital development have to be clearly defined from the get-go, and compliance-related requirements are no exception.

Too often today, the legal and compliance functions are the last ones involved in the digital transformation projects-or even worse, they are made aware of the solutions deployed only after their development -either because the rest of the organization does not even think about including them, or-let’s be honest-because they fear they will slow down the projects.

Now, we can’t possibly conceive of starting a successful digital transformation while leaving the compliance elements for the last agile sprint of the project’s development. The requirements have to be clearly defined like all the other specifications before even starting specific digital projects.

COMPLIANCE…TO WHAT?

Project managers should clearly define the scope of compliance with their business needs. This can vary depending on the sectors, functions, operations, and data targeted by the project. Are we talking about privacy, confidentiality, trade compliance, regulatory, or a combination there of? The list can be long and tricky but this early stage definition is an absolute prerequisite. This is the step where a diverse team needs to be consulted and agree on the compliance needs and requirements.

Once the scope of legal compliance has been defined, today’s requirement to remain compliant should be listed. This being said, one should always keep an eye on the possible evolutions of the regulations and anticipate the significant changes as much as possible, even if we live in a constantly changing environment. We are indeed facing changes on all fronts: the regulatory landscape becomes wider and more complex everyday while the technologies are evolving quicker and quicker every day. We saw on many  occasions that technological innovations are moving even faster than the speed of regulation.

Failing to comply with changing regulations can have serious consequences, including fines, criminal prosecution, and reputational repercussions on your business. This is why compliance topics should remain on top of any digital transformation project.

GET IT DONE

Of course, one should remember that today and tomorrow’s workforce are and will be working remotely. Certain departments or companies active in areas facing a strict regulatory environment have been dealing with an extraordinary challenge since the COVID-19 pandemic and the remote activities of their workforce. Accessing sensitive and confidential information from home, airports, trains, and coffee shops’ wifi is the new norm. On the other hand, we see a clear trend with the “move to cloud” movement. The cybersecurity aspects should therefore be the cornerstone of any digital transformation.

On top of the cybersecurity requirements, project managers should work hand in hand with legal and regulatory experts. Even better, they should report to the same organization to avoid any unnecessary silos and communication issues. We have seen the unfortunate result of independent, incoherent initiatives where needless delays, duplications, costs, and even additional vulnerabilities were created, leading to a disastrous and unproductive digital transformation.

Other important aspects to consider in a digital project relate to the location of the data (on-premises vs. cloud solution), who will access which part of the data, and how the access management will be controlled and updated. Do not also forget to include the IT experts and external partners in your investigation, who will have access to the solutions to maintain it properly over the years.