A Big World Filled with Opportunity and Obligations

Happy Cyber Entropy Month!? You can find our other posts on cyber entropy here, here, and here.? Also, remember to join our webinar ‘Bringing Order to the Chaos of Cyber Entropy’ on September 5th at 12:00 PM EST.

Today, let’s talk about Business Entropy.

Business Entropy

Your business is growing.? Hopefully that growth is in sales, revenue, and headcount.? But even if it isn’t, you’re still growing.? Take AI, for example.? Five years ago, AI wasn’t on your radar.? Now you have a whole department dedicated to it.? A Chief AI Officer (CAIO) wasn’t even a thing.? Now you probably need to hire one.? Heck, HR lives off of AI now.? It’s the only way to get through the thousands of resumes they get for every position.

That’s another growth point for you.? Every department is now demanding more applications, more network access, more support from IT who, in turn, are demanding more resources to provide that support.? All of this is healthy.? You’re evolving and improving and your customers will thank you for it.

However, the challenge is in coordinating all of this growth.? Departments tend to think in their silo.? They don’t consider the dependencies and the impacts of their actions beyond that silo.? So when Marketing adds a new opportunity module to Salesforce, they don’t realize that it changes a field name that breaks the data transfer to SAP.? And no one notices until the end of the month when reports are run so rectifying the problem isn’t just mapping fields but also cleaning data.

These things heap demands on IT which are often unplanned, undocumented, and unstaffed.? Now IT is reacting and redistributing resources which impacts other projects and creates further risks.

But there are solutions to these problems.? A business impact analysis (BIA) will help identify an organization’s dependencies and critical assets.? As we mentioned in the last post, a data inventory pairs well with that BIA by identifying critical data and classifying it.? Now you have ‘do not cross’ red lines in place that will alert those siloed parts of the organization to the impact of their decisions.

A BIA will also help an organization understand where resiliency is lacking and can define Recovery Time and Recovery Point Objectives.? Again, these things help ensure critical business assets are protected and help IT determine where to focus their resources.

Opportunity Entropy

The barrier to entry for app development is incredibly low.? Somewhere within your organization, someone is creating a new app.? This app may improve the efficiency of your business.? It might be an opportunity to generate new revenue or to build better relations with your customers.? It’s also the kind of opportunity that didn’t exist ten years ago.

AI provides similar opportunities and those weren’t around even five years ago.? Now investigating AI opportunities is almost an obligation for many businesses.?

Of course, the historic M&A opportunities still exist as well.? A quick Google search shows that as of May 2024 there are approximately 33 million businesses in the US and over 1 million startups.? According to the US Census Bureau there were more than five million likely employer business applications submitted between 2021 and 2023.? That’s a lot of potential targets.? And a lot of potential suitors.?

Oh, and don’t forget about emerging markets.? There are several billion untapped customers sitting out there waiting for you to reach them.

Many of the same things we mentioned for the internal entropy businesses face can also be applied to the external entropy of opportunity.? Do your due diligence and consider not just the resources required, but also the new dependencies on your internal resources, particularly on IT, that these opportunities may create.? That BIA you created above will help guide you here and make jumping at those opportunities more efficient and less risky.?

Obligation Entropy

All of those opportunities we just discussed also come with obligations.? You’re expanding into a new state that just passed a privacy law.? You’re expanding into a new country with different labor laws.? You’re considering an office in a location of concern.? Or maybe you’re getting into a regulated market in which you have not operated before.

All of these things come with legal, regulatory, contractual, and ethical obligations.? Businesses are increasingly being held accountable for their actions and non-compliance can result in reputational damage, legal consequences, financial penalties, and even jail time for executives.? On top of it all, you’re investing in these opportunities and want to see a good return.? You really don’t want that return to be a loss of trust that damages your business.

You need a Governance, Risk, and Compliance program that can identify, monitor, and ensure that you both understand your obligations and meet them.? This means creating an inventory of obligations and having a lifecycle for those obligations so you know when you need to submit reports and to whom as well as when you have met an obligation and can check it off as done.

As always, we here at Phenomenati can help if you need it.? I can be reached at [email protected] or check out our website.? And remember to sign up for our webinar.