The transformative power of digital tools and the critical nature of our digital infrastructure have never been clearer than during the coronavirus crisis. Widespread powerful connectivity and the availability of connected devices have enabled mass switching to remote working and virtual meetings. Of course, some business simply cannot be done at a distance but, where it can, digital tools have come into their own.
Digital transformation is the focus of one of our new webinar series. We are already off to a great start (to hear about future sessions, sign up here). Our introductory sessions looked at various aspects of digital transformation, including what we mean by the phrase, the impact of the COVID-19 pandemic, as well as some of the key legal and regulatory risks which typically need to be considered.
What is digital transformation?
At our kick-off session “What is digital transformation?”, we asked the audience how extensive the digital transformation of their business is. The vast majority are already on that path: 42 per cent have been going in that direction for some time and digital transformation is now core to their structure and strategy. More than a third (37 per cent) observed that they have started to digitalise some aspects of their business, but that there are a lot of legacy systems and processes to bring up to date. Only 4 per cent responded that although the issue is talked about a lot, not much has actually changed on the ground. And some 13 per cent of the audience’s businesses were born digital.
As our speakers Tamara Quinn, Konstantin Ewald and Catherine Hammon noted, digital transformation can range from incremental, almost unnoticed improvements – perhaps the introduction of some artificial intelligence (AI)-based optimisation into your cloud-based software – to major strategic repositioning. Some businesses have reinvented their own operations using digital technology, and then turned that investment and knowhow into a new revenue stream, selling it to third parties. It’s often the convergence of new and old ideas which generates the transformative power of digital technology.
The impact of the COVID-19 pandemic
Catherine and Tamara were joined by Gianluigi Marino for our second webinar, looking at the impact of the pandemic on digital transformation and vice versa. Less than 6 per cent of our audience thought this is just a blip, and that the old “normal” will return. A sizeable 42 per cent consider it a watershed moment, with no turning back. The remaining 52 per cent were less absolute and thought it was likely to be a mixture of the two. Some businesses simply cannot function under current conditions, and for others the current challenges require adaptations that are unsustainable. How different our future “normal” will be will probably depend on the business sector and type of work concerned.
The challenge of rapid change was a focus of this session. While cloud-based software facilitates fast adoption and rapid scaling-up, there is often little scope to negotiate the licence terms. Indeed, the urgency of an emergency more generally may necessitate slimmed-down procurement checks and due diligence for any new arrangements. Rapid change might not be solely for business continuity. Some businesses are making swift switches to new output to generate alternative revenues, or to support the pandemic fight.
Some contractual issues should remain a priority – such as maintaining cybersecurity and information security protections, or checking financial commitments and exit provisions. Others can be reviewed and any changes or corrections made once immediate pressures have eased. Data privacy is certainly an area where compliance needs to be reviewed and maintained.
Managing legal and regulatory risk
Benjamin Docquir and Nick Johnson joined Catherine to discuss managing legal and regulatory risk in digital transformation projects. Of course, the risks will depend on the nature of the project and the client’s sector. Nevertheless, our experience is that certain themes arise across all projects.
Only about a third of our audience answered that their board of directors had looked specifically into the legal and regulatory risks around the business’s digital transformation activity. It is important to bear in mind the legal responsibility of Boards to have the right skills to oversee the new initiative effectively. Going forward, a business may also need new skills for the legal team – for example, a switch from selling via a distribution intermediary to selling direct to consumers may need consumer law and data protection skills.
More generally, digital technology invariably involves data – whether processing it, generating it, or both. It is essential to create an effective data strategy for the specific project and your business’s wider use of data.
It is important to make sure that risks and obligations in relation to the project are well mapped out. Some technologies create particular challenges for liability. Pending legislation to manage those complexities (such as the initiatives proposed in the European Commission’s White Paper on AI), contractual frameworks offer the best way to manage a structured allocation of risk.
Since these three initial events, we have started to look in more detail at the transformative technologies, kicking off with AI. Additive manufacturing and the Internet of Things are next in the series with further topics following soon. Details of all future webinars will be posted on our Events programme webpage.
The digital transformation of our client events
Until the lockdown, we did not make much use of webinars, preferring “in the room” exchanges of ideas and the conviviality of catching up with our clients over a coffee and a giant cookie, or a glass of wine and canapés. But that option is not currently possible. As a consequence, one of our immediate investments, as we pivoted to mass remote working, was in a digital platform for webinars. And, perhaps counterintuitively, our client events team is now busier than ever.
Since the first event on 20 March, we have held around 40 webinars and welcomed over 3,000 attendees – at the time of writing that is an average of four webinars every three working days and around 100 attendees at each session. We might not be able to meet face to face at the moment, but those are striking statistics. We value greatly this new way to interact with our clients. A particular benefit of the virtual gathering is that we can invite contacts from around the world, and speakers from across our international offices can participate with ease. Of course, we often gather people from around our international network together in “normal” times, but it involves travel and time, so we are enjoying the simple collaborative logistics of a couple of clicks.
We will certainly be holding events in the room once it is safe to do so, but the adoption of our webinar programme is a watershed, not a blip.