Digital ecosystems have the potential to streamline business processes and give companies an edge in the competitive landscape. But they also present serious risks if not managed effectively.
Organizations that embrace digitization and advanced analytics to transform services, systems, and customer engagement create an expanding attack surface that cyber threats can exploit. To safeguard themselves as well as their clients, customers, and employees from the damaging consequences of cybercrime, they need a holistic approach to digital risk management.
Third-party risk management (TPRM) for Digital Ecosystem
Third-party relationships are essential for keeping your digital ecosystem running efficiently, but they can also result in data breaches, supply chain disruption and reputational damage if proper measures aren’t taken to de-risk them. Third party risk management (TPRM) is the practice of assessing, monitoring and managing risks introduced by external parties both before establishing a business partnership and during that relationship.
TPRM is often a collaborative effort involving various stakeholders and departments. These may include procurement, IT, security, legal, as well as other key departments that interact with third parties. To ensure everyone’s buy-in and integration of the TPRM process into your risk management framework is key.
The ideal TPRM programs provide standardized assessments against predetermined criteria. This guarantees that all vendors are assessed against the same standard, with any errors quickly identified by automated processes. A standardized procedure prevents arbitrary assessments and eliminates human-made mistakes.
Another advantage of a comprehensive TPRM program is that it helps your organization meet regulatory obligations. This is especially relevant if you have customers with sensitive data. Furthermore, having such a program in place helps protect your brand and comply with the new General Data Protection Regulation (GDPR).
Utilizing a Total Product Lifecycle Management (TPRM) tool that enables real-time assessment, monitoring and tracking of vendor activities is essential for business success. Doing so allows you to detect any potential issues as they arise and take the appropriate remedial actions before they negatively impact your operations.
Additionally, it provides you with a 360-degree overview of all your risks. Furthermore, it can help prioritize vendors and identify those deemed most critical based on their level of exposure to danger and importance for the organization.
Once you’ve identified your key vendors, it’s time to assess their risk and verify if they are adhering to your policies and contracts. You can do this by reviewing a vendor’s contract with you and thoroughly examining its terms and conditions.
TPRM should also involve continuous vendor monitoring and adaptation as new risks emerge. This requires accessing round-the-clock assessment, reporting and recording processes that allow you to monitor vendor activities in real time.
APIs in Digital Ecosystem
APIs are essential components of any digital ecosystem. They enable companies to establish new connections with customers, partners and developers while automating business processes.
APIs are not a one-size fits all solution; rather, they should be evaluated based on an organization’s individual digital needs and objectives.
When creating an API strategy, it’s essential to consider how it will enhance existing services, monetize them and make them more accessible to both internal and external developers. Furthermore, identify potential business advantages and assess the return on investment.
Implementing an API strategy can de-risk your digital ecosystem by eliminating legacy systems and consolidating functions into a modern back end. This reduces the amount of legacy technology that needs to be maintained and updated, which reduces training expenses, resources required for upkeep, as well as other costs associated with keeping old technology running smoothly.
For instance, a life insurance carrier could utilize a digital wrapper to migrate legacy policy systems into an updated back end and offer customers an integrated internal and external experience. Doing so minimizes risk, requires little or no legacy knowledge while eliminating technical debt and decreasing costs – benefits both carriers and policyholders alike.
Another way to de-risk your ecosystem is by creating new, scalable technologies that don’t need much capital investment. Examples include Software as a Service (SaaS) applications and API-based platforms.
These platforms can be deployed both on-premises or in the cloud, offering a scalable and secure solution that’s accessible from any device at any location.
API-accessible business capabilities are a hallmark of successful digital companies like Netflix and Uber. These firms typically unbundle software functionality into APIs that can be utilized by both internal and external developers alike.
A well-designed and managed API strategy can give an enterprise the foundation for future innovation. It enables businesses to adjust quickly in response to customer needs and transform how they do business to stay competitive. Furthermore, API security helps mitigate risks associated with data loss or privacy breaches by setting up a comprehensive security infrastructure that shields APIs from outside threats.
Automation
Automation is the practice of using software to carry out a task instead of humans. It has applications in numerous industries such as manufacturing, transportation, utilities and security. Automation helps reduce labor costs while speeding up production.
De-risking your digital ecosystem with security can be a powerful way to ensure the success of your business. By being proactive about identifying and remediating new vulnerabilities in third-party vendors, as well as avoiding breaches that could cause major financial damages, you are better able to protect against potential financial catastrophe.
A successful automation solution should detect and notify you of potential threats within your third-party ecosystem, while providing insight into trends across your entire portfolio. Furthermore, it should enable collaboration among other partners within this network for successful remediation.
Automated testing is an integral component of any digital ecosystem, as it guarantees your systems operate optimally and quickly. A slow system can irritate users and significantly lower customer satisfaction levels.
Automating testing requires the right selection of tool, testing process and team. A test automation solution gives teams the power to quickly create, run and monitor reliable browser, API, accessibility and mobile web tests with ease.
It also allows you to test your products at scale without needing to create and manage a separate testing team. It can increase productivity by eliminating repetitive tasks, freeing up time for more strategic work.
Thus, you can reduce development and testing expenses, improving operational efficiency. Furthermore, it eliminates errors and manual tasks that take up time, enabling you to complete more projects within a shorter period of time.
When selecting an automation solution, it’s essential to find a partner with the expertise and experience to help you expand your processes. Furthermore, select an automation platform that is adaptable enough to integrate with existing IT infrastructure.
A robust partner ecosystem will enable you to deploy a full automation suite without overhauling your entire IT environment. This saves valuable resources and frees up the IT team to focus on providing greater value to customers and shareholders.
Integration
One of the most effective de-risking strategies is creating a robust digital ecosystem. These networks integrate technologies and services from different providers to create new business interfaces, allowing companies to enhance their digital customer experience.
Constructing an effective digital ecosystem takes time and dedication, but once in place it can dramatically enhance an organization’s business performance.
Building a successful digital ecosystem requires that all elements work in sync. This requires having an extensive infrastructure and reliable communication between trading partners, suppliers and customers.
Another essential step in the digital ecosystem strategy is ensuring all systems and tools are up to date with the newest technology. This is essential because outdated software, lack of connections and an unwieldy data center will prevent companies from sharing information or innovating effectively.
Some of the most successful digital ecosystems are large and global, featuring a diverse group of participants. These ecosystems typically boast an expansive customer base as well as consistent value creation at their core.
An essential factor in building a successful ecosystem is setting market expectations among both users and app developers. Companies should demonstrate their dedication by launching specific (spearhead) products or services, as well as creating partnerships to support their ecosystems.
Additionally, companies should take into account their geographic reach. A successful ecosystem should be able to reach a wide variety of countries so companies can communicate more efficiently with their partners.
Finally, having a comprehensive strategy and well-adapted operating model are paramount for ensuring the sustainability of an ecosystem. Doing so will allow us to maximize returns from our investment in it.
Effective digital ecosystems are built with a high degree of change-readiness, technology optimization and data utilization. These elements guarantee businesses can successfully integrate their technology and systems, creating lasting value for themselves as well as their customers.
A comprehensive audit of an existing ecosystem can identify numerous areas for improvement and highlight where companies are using their digital capabilities more efficiently than others, leading to cost savings and increased growth for the business.
