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Isabelle Renard, Attorney, Paris ba, PhD Engineering: The downside of being a connected business

March 2015 by Isabelle Renard, Attorney, Paris ba, PhD Engineering

The multiple facets of the digital environment provide tremendous opportunities for businesses. It allows them, by making intelligent use of social networks and web media, to better communicate around their know-how and to become known worldwide, and to improve their performance and intelligence by facilitating their internal and external communication without any barriers in time or space. With the growth of SaaS cloud offerings, businesses can also benefit from powerful apps at affordable prices, both for their back office and production.

But there is a downside to every upside.

The downside to e-communications is the risk to e-reputation.

e-reputation is the real-time measurement of the good and the bad things that are being said and written about your business, your people or your services, anywhere on the planet. While bad news travels fast, especially if false or unsubstantiated, it now has digital wings courtesy of Facebook and Twitter, among others. It has become relatively easy to destroy the reputation of a brand and cause widespread panic among consumers, and easier still if the brand in question is a popular one. The only way to counteract this risk is to permanently monitor what’s going on with your brand on the web, an activity which a certain number of firms have made into their main service. Every alert must be followed by targeted actions whenever a serious risk to e-reputation is detected: post removal request, notice and takedown of websites, publication of retractions on social networks, use of right of reply on institutional websites, etc. In a nutshell, a tit-for-tat strategy is needed.

The downside to connectivity is the risk of leakage of wealth.

The easier it is for employees to communicate between themselves and with third parties, the easier it is for them to share information about their company without necessarily realizing its sensitive nature. In other words, the more connected a business is, the higher the risk of valuable technical, strategic or commercial information being leaked. Counteracting this effect is problematic as depending on the ability of each and every individual in the company, in keeping with their role, to adapt the way they communicate to different situations. It is all the more problematic in that no serious education of employees on this topic exists: company policies on use of the Internet are seen as coercive and fundamentally useless tools, which in fact they are since they remain entirely theoretical. Businesses should urgently dedicate part of their significant training budgets to organizing mandatory training sessions (including for management) to spread understanding of the risks inherent to inappropriate use of information systems, using practical exercises and examples. Only once this educational effort has been made will possible penalties for abuse be appropriate and effective.

The downside to having “everything in the cloud” is operational risk.

The risk of having “everything in the cloud” is not new. With outsourcing, the risk is the same, namely that of being dependent on a third party. But contrary to the case of outsourcing agreements, where this risk is visible and can be contractually circumscribed, in the cloud it is virtually elusive considering the plethora of service providers and the lack of legibility of the agreements. It cannot be sufficiently stressed that it is completely abnormal for the agreements of certain major cloud providers to be indigestible “digital only” hodgepodges stuffed with hypertext links that prevent any global view of the service and skillfully organize the complete exemption of liability of such providers. But some corporate clients also need to assume their share of responsibility for choosing the least costly offering, without much coordination or managerial approach to risk, by dismissing out of hand the objections of doomsayers (typically lawyers), who timidly try and make the case that a well-drafted agreement is not such a luxury…

To sum up, each of the above downsides of the digital world can be counteracted. Each of the countermeasures is achievable. But to be relevant and effective, the impetus must come from management, and therein lies the rub…

www.irenard-avocat.com




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