Download Data Privacy Consulting Best Practices

Here's a sobering thought: "Data is the new oil"—as Clive Humby, a British mathematician and architect of Tesco's Clubcard, famously remarked. Thanks to the rapid digitization of the world, personal, and business data is the new currency of the 21st century. But just as the oil industry was dogged by spills and environmental damage, the data boom is not without its own perils—most pressing of which is Data Privacy.

The Importance of Data Privacy

Data Privacy, an essential aspect of strategic management, is becoming increasingly pivotal for companies across the world—no organization wants their 'oil spill' splashed across the front page. According to a report by PwC, nearly 70% of U.S adults trust certain companies less than they did a year ago, largely because of a lack of trust in the way these Companies handle their data. Accenture research has found that Data Privacy breaches can cost companies up to $3.92 million on average.

Current State of Data Privacy Management

A report by Forrester suggests that in 2020, around 33% of global security decision-makers reported having experienced a security breach. That's a third of companies worldwide. According to a study by Gartner, only 44% of companies have a Data Privacy officer in place, a critical role necessary for guiding Data Privacy efforts.

The Shadow of Regulation

Senior executives are also faced now with an increasingly complex regulatory landscape. There's the General Data Protection Regulation (GDPR) in the EU, the stringent California Consumer Privacy Act (CCPA) in the US, China's Cyber Security Law—and more coming. A report from McKinsey indicated that companies are investing significant amounts to ensure compliance, with estimated costs for compliance with GDPR alone being up to $1 million.

Best Practices

• Establish strong governance: Goldman Sachs emphasizes the importance of establishing strong governance to drive a culture of privacy across the organization. This involves developing a comprehensive Data Privacy strategy that aligns with the broader business strategy.
• Ensure organization-wide participation: As Bain suggests, making Data Privacy an integral part of Strategy Development and Change Management processes is key. Everyone from senior leadership to frontline employees should understand the importance of data privacy and their role in safeguarding it.
• Set up Incident Response capabilities: CEOs need to ensure robust incident response capabilities to manage and minimize the damage in the event of a breach. Forrester recommends setting up specialized teams to ensure rapid response to any data breaches.
• Invest in Privacy Enhancing Technologies: EY suggests that companies might want to consider investing in privacy-enhancing technologies (PETs) to ensure solid technical protection of sensitive data.

Manage Data Privacy: Protect Your 'New Oil'

It's clear that Data Privacy is no longer just the domain of IT professionals—it's a strategic concern that warrants top-level attention. C-level executives need to approach Data Privacy with the same rigor as other areas of Strategic Planning, Operational Excellence, and Performance Management. As data continues to surge, execs should be aware of the potential risks and take definitive action to protect their 'new oil.'