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

September 8, 2015

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 

  1. Digital Transformation affects every organisation
  2. Digital Transformation is here to stay
  3. Digital Transformation is more than just IoT
  4. Digital Transformation mandates Organisational Change
  5. Everything & Everyone becomes connected
  6. Security and Safety is not a dichotomy
  7. Security is a risk and an opportunity
  8. 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.