Have our institutions become too complex to secure? PwC reviews the evidence.
At a recent board meeting, the CIO of a major global corporation led a wide-ranging discussion about the tools and practices needed to fortify the company’s data and systems against breaches. The board encouraged heightened investment and vigilance, then moved on to its next agenda item, a financial committee presentation leading to a board vote on acquiring shares to consolidate ownership in an enterprise in which the company held a minority stake. To the surprise of the CIO, who was still in the room, there was no discussion of cybersecurity, even though the acquiree was operating in a region where cyberbreaches and criminal hacking were endemic. Happily, the CIO’s fortuitous presence enabled a proper discussion of the impact of the decision on the company’s cyber risk profile, and a change in the acquisition approach aimed at bringing the acquiree more fully into the corporation’s IT and operational infrastructure.
The board had not connected the dots between the two agenda items because its view of cybersecurity, as well as the CEO’s, was more focused on risk dashboards and surveillance than on the security implications of business decisions. It’s an issue we’ve seen variations on for years. Simply put, far too many boards and CEOs see cybersecurity as a set of technical initiatives and edicts that are the domain of the CIO, chief security officer and other technical practitioners. In doing so, they overlook the perils of corporate complexity—and the power of simplicity—when it comes to cyber risk. We’d propose, in fact, that leaders who are serious about cybersecurity need to translate simplicity and complexity reduction into business priorities that enter into the strategic dialogue of the broad, CEO and the rest of the C-suite.
Questions such as the following can help catalyse this conversation:
- How does a full accounting of cyber risk affect our business model’s attractiveness, and does that suggest the need for a “simplification agenda”?
- How transparent are the cyber risks and trade-offs associated with our external partnerships, and what would be the pros and cons of simplifying our ecosystem to make them more manageable?
- How risky are our IT-enabled legacy processes, and how should we prioritise investments to secure, simplify and transform them to achieve competitive advantage?
Leadership teams who grapple with questions like these and embrace simplicity boost their odds of making the entire enterprise securable.
Even a decade or so ago, the technical operations, systems and footprints of many large companies had become extremely costly and complex. Breakneck digitization in the smartphone era has exacerbated matters, as companies have increasingly created ecosystems with a variety of new partners to help expand their reach and capture new, profitable growth. They range from supply chain relationships across goods and services (including IT services) to partnerships for data, distribution, marketing and innovation. Even more recently, the business challenges of the COVID-19 pandemic have spurred faster adoption of digital solutions that rely on data, digital networks and devices that are most often operated by companies outside the organisation’s borders.
By Richard Home & Sean Joyce
About the authors: Richard Home is UK Cybersecurity Chair, PwC United Kingdom; Sean Joyce is Global & US Cybersecurity & Privacy Leader, PwC United States.
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