Business transformation: what contractors need to

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Business transformation: what contractors need to know

The four fundamentals for business transformation contractors, by KuppingerCole founder Martin Kuppinger.

When the ‘greatest geek who’s ever lived’ connected with his idea about a wireless world back in 1926, he saw a future earth converting into one big brain – with the help of instruments not dissimilar to the modern day smartphone and the Internet of Things.

But even Nikola Tesla, genius that he was, couldn't possibly have imagined the sheer number of connectable items we’d have in 2015 and will have in 2016 – both in the consumer and corporate worlds - and the risks they’d give rise to.

Here, exclusively for Hydrogen’s inaugural newsletter, I’ll explore the fundamentals with which business transformation contractors can mitigate these risks, personally and professionally, writes Martin Kuppinger, Principal Analyst and founder of the leading analyst house KuppingerCole.

Contractors, your income will grow - but so too will the risks

Every business today is affected by Digital Transformation. The evidence? Well, just think of Apple's and Google's impact on the automotive industry; PayPal’s on the finance or Uber's on the transport and logistics world. One reason for these transformations’ fast diffusions is vast cost savings. The Economist has picked up on how the basic business model of Uber has served to modify the nature of many other companies unconnected to the ride-hailing app. Firms with nothing to do with the transport and logistics industries have effectively superimposed the Uber blueprint onto their own operations.

The rise of these inevitably digitally-led transformations will bring contractors with the skills to help carry them out, notably Business Intelligence, Customer Relationship Management, Supply Chain / Supplier Relationship Management and Information Security, significant rewards, as an analyst correctly foresaw last year. And this seems set to continue, so solutions that are all linked to Analytics and Digital Transformation are going to fare well for you, financially-speaking, if you’re a contractor.

This is only one side of the medal of course. New challenges arise with each new ‘thing’ connected with apps and services, concerning for example product security, liability issues and Big Data. The consultancy giant and business transformation specialist Deloitte was correct when it signalled some time ago that successful digital transformation must follow a top-down approach. But what they didn't consider in their analysis is the aspect of security.

Just think about the fact that many contractors work with their own personal devices in many companies, branches, sites and outposts, sometimes even for client A's competitors. Often contractors do this in and out of different countries and time zones. They sometimes cooperate and team-work with people they don't know and whom they have never seen, even while they are actually considered to be working together. This can be a bit scary for newcomers to contracting but what’s scarier, regardless of how many years as an independent consultant you might have under your belt, is the idea that your data; your client’s data or the client competitor’s data leaks. Unfortunately, these leaks never end up pouring out into the relative safety of your own encrypted Dropbox account! So you've heard it before but it’s worth reiterating; contractors – who are often stand-alone businesses - should at least keep the ownership of their own data secure and protect their personal identity.

What contractors need to know for a secure business transformation

Too many corporations I come across regard Information Security as a costly handicap for successful digital transformation. Properly implemented, it is exactly the opposite; a reliable business-enabler. Earlier this year, I presented the eight Fundamentals for Digital Risk Mitigation in the Age of Digital Transformation at the European Identity and Cloud Conference in Munich. If you weren't able to be there, here are the eight:

My eight Fundamentals for Digital Risk Mitigation
Digital Transformation affects every organisation
Digital Transformation is here to stay
Digital Transformation is more than just IoT
Digital Transformation mandates Organisational Change
Everything & Everyone becomes connected
Security and Safety is not a dichotomy
Security is a risk and an opportunity
Identity is the glue and access control is what companies need

The four most important of these eight fundamentals – as far as you (and other contractors) are concerned – are #1, #5, #7 and #8.

The first (#1) is that digital transformation affects every organisation. A key challenge for contractors to train their hand to is creating seamless interfaces between IT services and business. Intrinsic to this is a need for the role and department of a CBDO (Chief Digital Business Officer), who is responsible for information management and innovation, as well as business development and transformation. This opening for a visionary digital leader could also be filled, at least temporarily, by a contractor, who initiates or supports the introduction of this new business-enabling task. Ideally, the CBDO will be backed up by a Chief Information Security / Risk Manager (CISO resp. CIRO) who is in charge of secure IT applications and services.

The second (#5) fundamental for contractors is that Everything & Everyone becomes connected. So IT silos will disappear. Identity, managing relationships and security communications will become even more important in the future than they are today. New trends such as Identity Relationship Management are searching for ways of handling the identities of all humans, services, devices, and things and their complex and ever-changing relationships. Contractors have to share information with their clients, which often means that both parties exchange sensitive data. This is where CIA comes into play, the Confidentiality, Integrity and Availability model. Information must be kept secret (Confidentiality) such as by encryption, accurate (Integrity) such as by digital signature and efficiently shared (Availability), such as by providing the easiest access possible.

The third (#7) must-know for contractors is that security is at the same time both a risk and an opportunity. It can help to make application development much more agile and innovative, transform business models and build connected and collaborative enterprises and form partnerships. The keyword or phrase for this context is Security (and Privacy) by Design i.e. from the start.

So looking to make a one-time investment with enormous long- and near-term benefits is the goal. Future security will be available for much less costs. It might, overall, be much more expensive in the end to take security as an afterthought, which many car manufacturers do with connected vehicles. In fact, while recently rushing to compete and roll out ever more "smart" and digital features, security and privacy came second. The consequence is that about 1.4 million cars have already been recalled. This is not only costly; it can also lead to severe reputational loss and liability issues. In any case, a risk assessment is always necessary. It's always good to think in terms of risks and to understand how to invest the money for mitigation purposefully.

The fourth (#8) fundamental contractors must get on top of is that ‘Identity is the glue.’ Access control is what companies - and therefore contractors (as they’re often their own individual company), need. It is a question of managing and relating all identities of humans, apps, devices, services and their access.

Today, we are now more or less used to a world of Cloud, Mobile and Social Computing. Users accessing services through apps and the Internet of Everything and Everyone with billions of things that all have identities (and belong to someone or something!). This will further change the role of Identity and Access Management and seven steps to succeeding in this area in the future are outlined on our website.

Final thought

For now though, I can’t help but wonder if Nikola Tesla had pondered solutions for the many new challenges confronting what some could see as a ‘vulnerable’ big brain. With the never-ending hardware and software developments that our age almost takes for granted, it’s clear to me that all the thinking power we can muster must go towards getting the security basics right.

About the author:

Martin Kuppinger is the founder of one of the top European analyst agencies, KuppingerCole, and as Principal Analyst is responsible for KuppingerCole research. He is a published author of more than 50 technology books and a keynote speaker at IT conferences. Having studied economies, he combines in-depth IT knowledge with a strong business perspective.

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"2025 and Beyond" Question and Answer session

26 Feb, 2024

Our webinar 2025 and Beyond: Why Your Hiring, Learning, and Culture Need to Evolve brought together thought leaders Enrique Rubio (Hacking HR), Lisa Skinner Källström (Teamtailor), and Hydrogen Group’s Dean Jennings and Michelle Miller. The conversation explored strategies used to tackle the challenges of the future workforce, shift organisational cultures towards lasting partnerships, and ensure teams are equipped for the age of artificial intelligence. _ The Q&A box was brimming! Our webinar offered participants the chance to consult our HR experts on addressing shifts in the people and culture realm as we approach 2024 and beyond. Interesting questions were raised, and we compiled them all to seek and reached out to our experts to get some definitive answers. For a recap on the webinar, check out our blog Navigating the Future: Insights from our Webinar "2025 and Beyond" So, here we are. Your questions - answered! - How can companies make people feel more secure in their jobs? Is it just a matter of increasing communication? Lisa suggested a shift towards a more sustainable approach. 'In recent years, we have seen many companies experience massive growth, and the need to get great talent onboard - hence offering extremely generous compensation packages. Unfortunately, many have now faced layoffs, and while the compensation and benefit strategies are not the sole reasons, I would like to propose a more sustainable approach for the future. [Increase benefits as the company grows, and as business results allow, we can increase pension levels or similar benefits – and discuss it internally! Open dialogue about results, investment choices, and their rationale fosters a sense of involvement among team members and signals the company's commitment to a sustainable direction.]' Dean echoed concerns about job security in today's volatile economy and advises, 'In today's uncertain economic climate, job security is a concern. However, by becoming indispensable and embracing tools like AI, individuals can enhance their value to employers, securing their positions for the future. Apart from using Chat GPT, what other tasks can be automated with AI? Lisa commented, ‘We’ve mentioned a few examples already, but I would look at all the systems your company allows you to use and question your suppliers on what features are or will be based on AI. For example, many applicant tracking systems allow the opportunity for AI to summarise CVs for an easy overview, generate interview questions and suggest more personalised replies to rejected candidates based on their CVs. Also, the opportunity for AI to transcribe an interview is an amazing tool which allows the interviewer to solely focus on listening and talking to a candidate as opposed to taking notes. As always, AI in these types of systems is not designed to make the decisions for a recruiter or business - but serve as an assistant to save time and work more efficiently.’ Dean added, ‘There are far too many to list. The AI directory https://aitoolsdirectory.com/ does a really good job of showcasing what does what and where you can find it.’ What is the impact of AI on employee engagement and how can HR teams use AI to promote engagement? Also, what precautions should professionals take when using AI? Dean offered his perspective by stating that ‘engagement and AI may seem contradictory, but there's a clear benefit when HR uses AI to streamline admin tasks, freeing up time for vital human interaction. Tools like Koios, for instance, offer Acoustic AI, helping HR understand team and individual personalities better, for more tailored approaches. Professionals must approach AI implementation carefully, ensuring ethical use to maintain trust and transparency in the workplace.’ How can we make sure our services stay personalised while using AI? Dean responded, ‘By leveraging AI to handle time-consuming tasks. The best thing about AI is that you get to choose what it does and what it doesn’t. If you feel strongly about human interaction to enable personalisation, you don’t have to let go of that – just embrace AI to make those interactions better. Get it to strip data in the background for you, or to type up your notes and actions as you have the conversations. The possibilities are endless, and they can be tailored to your needs.’ Within your businesses, have you experienced any resistance to the adoption of AI? How have you handled these objections? Dean responded, ‘A lot of the resistance I have seen has either been a fear of trying or a fear of being caught. There seems to be a negative connotation with AI, that if you get it to do something for you, are you cheating? The answer is a resounding no, you are working with the tools available to make yourself more productive for your organisation. Robot proof recruiter, if you haven’t read it, you should. Especially if you are a recruiter or if recruitment is part of your job role. I’ll spare you the details, but it is an amazing read that showcases the fact you can never take the people part out of recruitment - you’ll always be able to provide a better level of service than a robot (at least for now) and you need to focus on the parts of the process where human interaction is at its most vital and automate/utilise AI to get back time in your day to improve that social element of the process.’ Do you feel Employee Resource Groups will be on the rise with the future generation of workers? Dean replied, ‘A truly hybrid workplace cannot function effectively without the right technology in place. That doesn’t even need to be AI. For employees to feel a sense of belonging in a workplace, there should be a seamless experience that goes beyond just having teams up on 1 laptop in a room full of 30 people. Again, this will only advance with time ... my eutopia is to have my whole team (who are based in the UK + Thailand) sat around a virtual desk, on a beach with an interactive whiteboard we can utilise in real time via virtual and augmented reality. You may laugh now, but in the next couple of years, VR and AR tech will be the staple of hybrid working and teams coming together around the globe. This doesn’t take away from the in-person experience and nor do I think it should. It should be a tool that compliments real-time working solutions.’ How can we support older generation employees in the changing landscape? Dean offered his perspective, ‘AI is truly remarkable. It embodies the futuristic vision many of us had as children—computers and programs taking on tasks for us. For those uneasy about it, I believe it's a matter of not fully comprehending it or lacking the skills to use it effectively. AI has quietly become a part of the workplace, and many are still navigating its intricacies. The focus should be on empowering employees to leverage AI to enhance productivity and value to the organisation. Those who resist or fail to adapt won't be replaced by AI but by individuals who embrace change and view AI as a tool for greater contribution.’ How can we safeguard against the risk of AI stifling creativity in the workplace? Lisa said, ‘I would say the opposite, if we use AI for the more regular and routine tasks then we will have more time to use to be creative! For example, instead of spending hours on creating a presentation for an important project - let AI do this creating for you and spend the time on how you want to engage with your audience instead. Using ChatGPT to find easy tasks that I would previously have spent a lot of time on has been a big change in how I work and allows me find space in the day.’ Is there a regional divide across different parts of the world? Are Europeans more prone to appreciate safety/job security than Americans? Lisa commented, ‘My thoughts are that globally we have been through a lot in recent years, covid affected everyone regardless of location. After that, we had war in Europe for the first time in many years which had major effects on the economy, which I believe has made people appreciate job safety even more and value this in choosing their next employer. However, in some parts of Europe employees are still very protected by labour laws etc so I believe it is different from America where it is more common to have short notice period and less resistance from employers to terminate an employment.’ Expanding on the key themes discussed in our webinar, we're thrilled to introduce our Thrive Guide – a practical roadmap for building a thriving workplace. Within the Thrive Guide, discover actionable strategies to enhance employee engagement, foster diversity and inclusion, and implement flexible working models. Discover practical solutions to enhance workplace productivity and satisfaction. As our expert Dean Jennings emphasises, 'adapting to evolving workplace dynamics requires strategic initiatives.' This sentiment is echoed by other industry leaders in our webinar. In the Thrive Guide, these insights converge to offer practical solutions, providing a roadmap for organisations navigating change. Revolutionise your workplace. Download the Thrive Guide now!