International red tape is causing 'digital fragmentation'
- National policies put in place for data privacy, restrictive trade and cybersecurity measures have increased over the last decade. What may be good intentions are causing "digital fragmentation" — or "increasing obstructions to the flows of data, IT products, IT services and IT talent," according to an Accenture survey of more than 400 global CIOs and CTOs. As a result of these barriers to globalization, almost three-quarters of CIOs and CTOs expect to delay or abandon market entry plans in the next three years, and 8% expect to do so now.
- More than half of IT executives say cloud services, cross-border analytics and/or operations across national IT standards will be compromised, according to the report. Between 50%-60% say global IT architectures, physical IT location strategy and/or cybersecurity are being rethought and revised.
- Compliance to national IT standards is among the top three largest drivers of IT costs, along with cost of sourcing inputs, including talent, and requirements to increase IT infrastructure. Enterprise tech, R&D and innovation and sales and marketing are expected to be most at risk from the growing cost and complexity.
In the digital age, most large companies have made the shift to become multinationals. But the rise in different national policies leaves the C-suite with a lot of juggling to do.
GDPR is only six months out from taking effect, and the EU privacy regulation may be one of the most impactful regulations to ever hit the international stage. Companies that haven't already started preparing for compliance may find themselves in a sticky legal situation come May 2018.
Yet the complexity of compliance goes far deeper than the international arena. In the United States alone, privacy regulations can even differ on a state-by-state basis. The nuance across geographic areas thereby requires no small amount of legal understanding and consultation.
For the Googles, Facebooks and Amazons of the tech world, allocating resources to handle globalization barriers is relatively easier than the task SMBs and non-tech companies are faced with.
CIOs are all too familiar with the tight budgets they are afforded and expected to turn a profit with. These complex international and domestic IT regulations are not making the job any easier.
- Accenture Digital Fragmentation
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