Among the many challenges facing businesses today – heightened competition, contracting economies, growing regulatory complexities, disruptive technologies – there remains a single constant: the need to maintain stakeholder trust.
Stakeholders in this sense include all interested parties from customers to employees, suppliers and governments. A reduction in this trust often translates into falling market cap, earnings decline, loss of market share and eventually, business failure. Yet trust is fragile: it is difficult to build and even harder to maintain.
As one of the world’s most successful investors, Warren Buffett is reputed to have said: “Wealth can always be recreated, but reputation (or trust) takes a lifetime to build and often only a moment to destroy.”
Denis Bensch, CIO of FlowCentric Technologies, believes an essential part of maintaining stakeholder trust is to ensure the business meets stakeholder expectations.
“In today’s world, this means ensuring that technology, which impacts almost every aspect of the customer, employee and supplier experience and interaction, performs as it should. People expect a tool or system to do what it was created for. When it doesn’t – when technology fails whether due to system glitches or to intentional breaches by others – trust in both the business and the technology is damaged, if not lost completely,” he says.
And reliance on technology, including disruptive technologies, is growing all the time. In 2018, IDC predicted that more than 60% of global GDP would be digitised by 2022. Nearly $7 trillion was expected to be invested into digitally enhanced offerings that would be adopted by every industry across the board.
According to Bensch, the initial loss of trust due to failed technology is often compounded by further lack of access or slow response in remediation or damage control.
For example, if a bank’s systems go down, its customers may have no other way to access their money. The bank’s call centres may be flooded with panicked phone calls from its customers, whose frustration is compounded by being placed on hold while other customers are tended to. If this happens too often, they will no longer trust the bank and move their accounts to a seemingly more trustworthy competitor.
Numerous employees are currently working from home, dealing with load-shedding and other challenges. If they cannot connect to the business systems that they need to perform the daily tasks, they will become despondent, mistrustful and may struggle to complete their work on time and to standard – ultimately costing the company.
When introducing technology into a business, it is important to ensure there is a sound business reason for doing so, and that the technology is fit for purpose.
“End-users are often blasé about technology, choosing to simply trust the latest application or device without doing research, which means that new and fragile systems are sometimes trusted as absolutely as systems that have proved to be more powerful and stable. This happens because many people are ill-equipped to judge the trustworthiness of specific technologies.
“This naive trust, and the shadow IT systems that often accompany it, can be extremely detrimental to a business by exposing it, its data and its stakeholders to enormous risk. This could include downtime (from malicious infiltration, ransomware, damaged and missing data sets); lost productivity (because systems are not working, not fast enough, and not centralised); and violations of policy, regulation and legislation, as well as user privacy,” he explains.
“While management and protection of personal data is being increasingly legislated, the legislation around software and devices has not kept pace with the rate of technology development. This is something that needs to be resolved quickly, if trust in technology – and by extension stakeholder trust – is to be maintained,” explains Bensch.
According to the 2020 Cost of a Data Breach Report, cyber security incidents involving data breaches in South Africa cost local companies an average of R40.2 million per breach. Most of these incidents (48%) involved malicious attacks on customer, employee and corporate data. But human error (26%) and system glitches (26%) were also to blame.
“We cannot imagine a world without technology. It is an intrinsic part of our business and personal lives. But we must bear in mind that it is a tool, very much like a hammer – and like a hammer, it can be used to build a house, or cave in a skull."
This is why Bensch advises companies to:
- Ensure that their business processes are properly defined and supported;
- Refine and simplify their technology stack;
- Ensure that the technology implemented in their organisation is fit for purpose and well supported;
- Regularly educate its stakeholders on the risks that accompany technology; and
- Be transparent about what data the business collects and stores about its stakeholders.
Additionally, he recommends that companies take the time to understand their stakeholders' needs. When a company understands what its users require, the organisation can provide the appropriate tools to their stakeholders for them to meet the businesses objectives.