Reducing Business Risks in a Data-Centric Economy: Five Challenges an Effective Digital Strategy Can Address

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By Claire Sangster, State Manager, Western Australia

To quote Warren Buffet; “Risk comes from not knowing what you are doing.” Words that ring true in discussions about embracing digital opportunities.

In business, risk is omnipresent. In the current business and economic circumstances, this is more evident than ever. In the midst of major health, safety, climate and competition issues, it has never been more critical to understand the threats posed and the opportunities that an effective digital strategy represents, to protect you from them.

As digital transformation evolves, shaping and adapting to uninterrupted service requirements continues to change the dynamics of risk profiles.

There are five key areas of risk that every business should continually delve into to build digital resilience in a data-driven economy.

  1. Availability of systems and data

Gone are the days when certain downtimes were classified as acceptable for critical systems. Industry 4.0, aka the data economy, relies on immediacy – where users and customers expect instant access to information, applications and services, or they are gone.

No one wants to be the next financial transaction platform that fails during peak Christmas shopping. No business can afford to operate with an unstable online presence or business process platform. As the entire economy is redesigned towards total reliance on digital systems, eliminating downtime equates to mitigating risk.

Knowing that your critical environments are fully protected against standard risks such as fire, extreme weather, and power or cooling failures are big things, but the human element can’t afford to. be neglected.

Digital growth across the economy has disrupted the supply and demand for skilled workers. Ensuring you have the expertise to maximize return on investment, proactively manage complex operational environments, and establish best practice standards for incident response and resolution is equally challenging.

Availability is much less risky when you can trust a critical infrastructure that is designed, built and operated for 100% availability and which facilitates a seamless redundancy, backup and disaster recovery strategy.

  1. Data security and sovereignty

Data is gold. We know that cyber threats are growing in sophistication and frequency; what is less well understood are the challenges associated with legal compliance and compliance obligations. Under ever-changing standards, mandates and frameworks, the disciplines of physical security and cybersecurity are now converging to form a holistic security posture.

Protection against phishing, malware and ransomware attacks are not the only data management risks. New government mandates on where Australian data is hosted and how it is shared add layers of data sovereignty discipline and potential penalties to the equation.

All companies working with government data will soon need to ensure that their critical infrastructure is housed in DTA Certified Strategic facilities; meaning they are verified to meet strict physical security and sovereign ecosystem standards.

  1. Compliance

Regulatory mandates around data retention, security, privacy, and sovereignty are constantly evolving and continue to pose a huge risk to businesses. For example, federal legislation is currently being drafted to reclassify data centers as “critical infrastructure,” bringing additional scrutiny and significant compliance obligations to how they are regulated.

Every industry has its own unique compliance requirements which all carry amplified risks in the digital world. Often governed by complex frameworks requiring significant skill and investment, compliance programs divert attention from other areas of the business that offer better returns.

When it comes to digital infrastructure, reducing compliance risk and eliminating headaches associated with managing audit, measurement and reporting processes frees up resources to focus on improvement basic skills and growth opportunities.

  1. interconnection

Today’s digital businesses are only as good as their interconnection strategies. The risks associated with network outages are increasing. According to a 2022 study by the Uptime Institute, network-related outages (29%) replaced power (24%) as the leading cause of severe IT downtime.

The hybrid IT architecture is interconnected by a myriad of network services, any web disruption can impact everything. Positioning to take full advantage of productivity gains and cost optimisations emerging from megatrends such as 5G, IoT, AI and virtual reality depends on resilient network architectures and services that are visible, flexible and agile. to provision.

Meanwhile, as digital processes cement themselves to the foundations of growth, network traffic risks being blocked. Bandwidth, latency, and jitter pose a huge risk to the effective use of hybrid architecture where data is shared multiple times across multiple physical and virtual platforms and environments.

Slow is the digital economy’s new downtime. Every fraction of a second lost due to screen loads or data sets moving from point A to point B, impacts critical metrics governing productivity or customer experience.

Proximity to cloud availability zones and digital services; using a combination of fixed interconnection and pay-as-you-go services, introduces basic levers for optimizing performance, cost efficiency and mitigating risk.

  1. Competitive disruption

Arguably, the biggest business risk is being caught off guard by innovative competitors or seeing international cloud-native companies take advantage of deep pockets, low overhead, and big marketing budgets to undermine your market share.

Today, the financial services industry is flooded with international cloud-native providers with innovative products, smart marketing, and lean business models driven by automation and investment in a seamless customer experience. Likewise, internet services and domain hosting companies are besieged by global raiders looking to leverage scale and remote management of everything from service delivery to support, as that competitive advantage.

All sectors are in the same boat. The future of commerce is global and automated, so knowing how to level the digital playing field through innovation and growth programs will ensure you are not left on the bench for future big games.

Australia is an Asia-Pacific haven for overseas expansion. World-class digital infrastructure, high-speed undersea cables linking Asia and the world directly to Perth and Australia are the perfect complement to geopolitical stability that can turn the odds in your favor.

Know the jeweler

Another Warren Buffet quote reads, “If you don’t know jewelry, know the jeweler.” This is particularly relevant when it comes to digital risks. The five elements of risk above are all essential conversations to have with technology vendors.

When you don’t understand the full business risk implications of downtime, security, network outages, compliance, and competitive disruption, it’s best to partner with specialists who do.

Contact NEXTDC to better understand the risks that could harm your company’s digital transformation mechanisms and to discuss how to mitigate these dangers.

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