Data Privacy in Digital Transformation: Consultancy Insights

As our digital lives continue to generate masses of data, privacy remains a pressing issue for individuals and governing bodies alike. In 2023, 40 U.S. states and Puerto Rico introduced or considered at least 350 consumer privacy bills — the same year that saw the European Union issue record-breaking fines for data privacy violations. It's become imperative that organizations across industries take data privacy seriously. Digital transformation projects present a compelling opportunity for organizations to reassess their data privacy tools, policies, and oversight. But we know such efforts can be challenging. More than half of such projects with costs of at least $10 million come in over budget, behind schedule, or don't meet user expectations. At Palantir, we understand the need for balancing data privacy considerations with delivering fast, tangible results from transformation initiatives. 

As a consultancy, we have 25 years of experience delivering digital transformation projects to organizations across industries. Here, we gather our perspectives on data privacy: where it should factor into your transformation plans, the challenges and opportunities data privacy presents, and how to balance thorough data governance with demonstrating value quickly. 

If you're looking for further insights, be sure to read our digital transformation roadmap and explore our case studies to see our recommended practices in action.

How do digital transformation projects impact data privacy?

At its essence, digital transformation means updating and introducing tools, pipelines, processes and governance structures around your organization's digital ecosystem. It encompasses a broad range of considerations and practices — but almost all of them have implications in terms of data privacy.

• If you're updating your tech stack and implementing new tools, you need to be mindful of shared data ownership with third-party vendors, data flowing across jurisdictions, and how these impact data privacy.
• Introducing new features (e.g., digitizing forms, using e-signatures, implementing chatbots to triage user requests) also means rethinking data ownership — as well as deciding how to store, process, and maintain the new types of data these features generate.
• If you're looking to make more data available to internal employees, be aware that greater availability also means a larger potential attack surface for outside threats — it's important to make sure that access is governed judiciously, and that employees are well trained on how to access data safely and securely.

The good news is that digital transformation projects are a great opportunity to strengthen data privacy. Most digital transformation projects by nature introduce procedures that aid good data privacy policy-making — such as auditing, establishing governance practices, and implementing new tools. By considering privacy at each step in your transformation efforts, you can establish a sustainable and well-considered culture around ensuring data integrity.

Data privacy challenges and opportunities in digital transformation efforts

Stakeholders want to see results from digital transformation as quickly as possible. But taking the time to thoroughly reflect on data privacy is the most cost-effective approach in the long run — and gives you the opportunity to resolve data governance challenges across your organization.

Data security

Upholding data privacy means making sure your data is secure — and insecure data is incredibly costly. The average cost of a data breach in the U.S. in 2022 was $9.44 million, and the average global total cost of breaches has increased by 12.7% since 2021. With the cost of vulnerable data continuing to rise, the value of thorough data security cannot be overstated.

Compliance and interoperability

With 79.3% of the global population covered by at least one data privacy law, it's important to make sure your transformation efforts are compliant with national, international, state, and industry-specific regulations. It's also important to consider where your data is moving across multiple jurisdictions as part of your compliance efforts. Although it's an extreme example, the largest fine ever issued for violating the EU's General Data Protection Regulation (GDPR) concerned the unlawful transfer of data between jurisdictions — and cost Meta €1.2 billion.

Trust

Across the government, academic, charitable or for-profit sectors, trust is universally influential in whether or not people engage with your services — and data privacy is an increasingly large part of trust. 60% of people said they would spend more money with a brand they trust to handle their personal data responsibly, and 48% have stopped using a service altogether because of data privacy concerns. Storing data securely, managing it responsibly, and having transparent data privacy policies all contribute towards maintaining strong trust between your organization and the people that it serves.

The role of consultancies in digital transformation: data privacy advocates

Balancing the need to thoroughly address complex data privacy challenges with the need to keep data transformation projects time- and cost-effective can be daunting. This is where digital consultancies come in; our role is to consistently advocate for best practices around data privacy, while ensuring the project moves along at a healthy pace. A robust data privacy strategy is more than the sum of its parts. As a consultancy, we work across teams and departments, advocating for a holistic approach to data privacy. Here are some of the facets of our approach to comprehensive data privacy — and our recommended practices in those areas:

• Auditing. A good data privacy strategy starts with understanding the different types of data within your systems: who owns it, who can access it, and who is responsible for maintaining it.
• Tools. When choosing what tools, programs, software, APIs and data storage solutions to use in modernized tech stacks, it's important to consider data privacy at every step of the process. We advocate for using open source solutions where possible to maintain data sovereignty, and to have a thorough understanding of the privacy policies and service license agreements of all third-party tools in your stack.
• Governance. Data privacy is not a one-time commitment — and nor is digital transformation. We advocate for setting up (or reaffirming) a digital governance framework, to ensure your digital presence is consistent and well-maintained beyond the initial transformation project. This also entails clearly identifying who is responsible for storing, securing, maintaining and editing your data, as well as who is responsible for enforcing and communicating your data privacy policies.
• Roles and permissions review. Digital transformation projects should aim to make data more readily available to those who need it — but only those who need it. A thorough audit of who has access to which datasets, and who actually requires access, will help strengthen privacy and security measures.
• Training and awareness. If you're getting colleagues up-to-speed with new software, governance policies, and workflows, it's also a good opportunity to bolster training around data privacy. Educate colleagues about the relevant compliance frameworks, and any data protection measures they're required to take.

As important as it is to set organizations up for long-term success, we also understand the need for tangible results. To balance this, we work using agile methodologies to ensure consistent delivery of new features throughout digital transformation projects. Using agile also means that responding to user feedback is firmly embedded within our workflows, further enhancing trust. We also design transformation projects so that they continue to save organizations time in the future — for example, we work with resilient, well-maintained open source technologies, so companies aren't wasting time updating obsolete software every few years.

Takeaways: Data privacy as an opportunity, not an obligation

We know that with the formidable scope of digital transformation, data privacy can seem like one more box that has to be checked. But from our perspective, thinking about data privacy actually provides a huge opportunity to take control of your data, build trust in your digital presence, and secure your information. Robust and resilient data privacy involves so much more than just choosing an encryption tool, and building a data collection consent form for your website. If you're looking for expertise on how to make sure data privacy implications are considered in every phase of your digital transformation project, get in touch.