Network of Success

Network of Success
11 Jun 2019

How are businesses profiting from the digital transformation?
An interview with management consultant Herwig Springer, CEO i5invest.

Mr. Springer, global IT spending is estimated at US$3.76 trillion for 2019. That is an amount of money in the same ballpark as the federal budget of the United States. How is this astronomical amount distributed and what are the key milestones for the IT of the future?

Herwig Springer: Most of the money is spent on mobile phones, PCs, and local data center infrastructures, including cloud services and Internet of Things (IoT) devices. The IT architecture of the future is grouped around the issues of legal compliance, security and enterprise collaboration, i.e. software and network tools that support internal collaboration within companies. As a general rule: The focus is on employees, and the goal is optimized corporate communication.

A current Forrester study concludes that enterprise communication tools not only dramatically improve the flow of information between employees, but also help to reduce any obstacles along the way to stronger customer loyalty. Would you agree with that?

Absolutely! The shared use of activities and data in one widely-distributed network ensures that companies can have constant access to the knowledge they generate and the data they produce in any combination. A quintessential response to these questions involves global alliances of companies that cover different segments in the same market. One of the most prominent examples, to be sure, is the partnership between Microsoft, Cisco and Slack. This confirms what we have been observing for years: A company of today knows no borders.

Where do you see the key benefits of Enterprise Collaboration?

This is a very broad field, as functioning EC tools offer many and varied advantages for companies and their partners. Among the most important, however, are surely those aimed at bringing distributed teams together, providing greater speed, or flexibility and agility – especially for smaller business units – and boosting productivity of personnel.

What role do IT security and legal compliance play on the digital agenda of companies?

These topics are inextricably linked in complex ways. Under the headline of Enterprise Security, we find products and cloud-based services that detect, prevent, protect and effectively respond to cyber threats and attacks against businesses.

How do I know which product makes sense for my company?

In terms of deciding which product or service is the most suited, key criteria need to be clarified: The relationship between risk, resilience, usability and price ought to be as balanced as possible. The objective should always be to achieve the greatest transparency in all processes and to implement them in a sustainable manner. After all, the idea is to gain more control over the processes essential to the core business.

Herwig Springer is the CEO of the management consultancy, i5invest. He is responsible for Business Development, Corporate Development/M&A, where he brings a wealth of experience in deals, high-tech valuation, renewable energy, corporate development and international M&A. Herwig Springer has been active as a valuation and deals expert in the fields of corporate finance and deals consulting since 2005, advising a large number of clients ranging from medium-sized Austrian companies to multinational corporations. Herwig studied at the Vienna University of Economics and Business Administration and holds a CEMS Master’s degree in International Management from the Copenhagen Business School. In addition, he is a Chartered Financial Analyst® and the author of various publications in business literature.

One can sometimes get the impression that IT security is the highest priority. Why is that?

That also has to do with data protection law. Here, companies are well advised to stay up to date with the latest legal and regulatory environment. Even a single infringement of a relevant regulation – using the GDPR as one example among many – can lead to massive losses and damage to a company’s reputation. We can observe that a dynamically adapting legal situation is often the impetus that leads to investments in security issues the first place.

Does the awareness for the protection of sensitive data, also beyond legal regulations, need to be brought even more heavily into focus?

People need to realize that data represents an asset value today and therefore also needs to be treated as such. At the same time, it is also a potential liability. The list of losses caused by a lack of IT security is now very long.

Which examples come to mind in particular?

Let’s take the Equifax case. The financial services provider with annual revenues of US$2.6 billion was the victim of a gigantic data theft in 2017. Over a period of months, hackers gained access to the data of 143 million customers, including 300,000 credit card numbers. The Achilles’ heel was a security gap in the application software that was integrated into the company’s website. No less drastic were the consequences of a security breach at Maersk. In 2017, the company fell victim to the global “Petya” cyber attacks. Maersk estimated the damage at 200 to 300 million US dollars.

What do you recommend?

Supplier relationship managers should use the momentum to focus much more heavily on what is happening in the security department. Here, the object is to intelligently link the security strategy with business initiatives.

It is not uncommon for companies to be overwhelmed when it comes to choosing the right IT security strategy.

It’s no wonder. Corporate IT departments are literally buried under the maintenance burden of legacy security solutions. Cloud-based security products are comparatively more agile and can implement new detection methods and services much faster than “homemade” solutions on site.

Nearly every technology company operates a partner program or a series of initiatives aimed at networking with industry partners. Why is that so important?

These partner programs are generally geared towards to supporting integration with complementary technology vendors whose products and services integrate and harmonize with the respective IT platform.

Critics often see only an end in itself in this trend. How do you address this?

Partner programs are anything but an end to themselves: They serve to fulfill the expectations of existing customers and to jointly develop new customers. In seeking a solution for individual issues, IT decision-makers are by no means looking for a single tool that can “do everything”. Especially in this area, alliances between technology providers can be the key to success. An IDG study confirms this: 90% of IT decision-makers now work with vendors who are part of a partnership. Which only goes to prove the following: Successful networking on both the customer and supplier side is the model of the future.

Mr. Springer, thank you very much for the discussion!