The Fourth Industrial Revolution: The Impact of Digitalization on your Business

01/20/2016 - 19:38

Dan Radak | @DanRadak

What is The Fourth Industrial Revolution?

The annual World Economic Forum in Davos, Switzerland began today and will host some of the world’s most renowned experts from multiple industries to discuss The Fourth Industrial Revolution. Professor Klaus Schwab, the Founder and Executive Chairman of the World Economic Forum, chose this particular topic for this year's official theme in order to ask a question whether the human race will benefit or suffer a great lost after we collectively realize the potential of bio-tech integrations and massive changes in the field of communications. To quote the aforementioned professor:

"A Fourth Industrial Revolution is building on the Third, the digital revolution that has been occurring since the middle of the last century. It is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres."

While our systems of communication are becoming fully digitalized, from transport systems to medical services, there is a vast number of risks and challenges that industries will have to face in order to thrive in this Fourth Industrial Revolution. Digital privacy and security is an essential component that needs to be a top priority going into this next revolution.

4th-industrial-revolution-WEF-World-Economic-Forum Source: WEF

The Impact of Digitalization on Businesses

The impact of modern technologies on businesses is evident. The majority of work within both small and larger companies is highly dependent on the use of internet and cloud platforms that make our everyday tasks manageable. The CRM systems, professional tools, research, marketing, even sales and distribution – everything has become digital and automated in many aspects.

The entire global industry and market is being greatly affected by this ongoing change. Since the majority of modern shoppers are using their mobile devices to search for products and services, businesses with eCommerce websites strive to deliver platforms that will provide the best answer to the increasing need for digital trade in every existing industry. There literally is almost an app for everything these days. The potential of cloud platforms is undisputed. However, the risk behind this concept of digitalization is very real as well.

Risks and Challenges of Digitalization

As expected, the human factor still remains the number one risk that could possibly affect your business and endanger your data privacy.There was a total of 781 breaches (PDF) in the year 2015 solely in the US. These breaches accounted for over 169 million personal accounts exposed due to weak cybersecurity and faulty protocols. Businesses need to address and understand this problem thoroughly as it could greatly impact their future success.

However, the challenge at hand doesn’t concern the machines. Machines are doing a superb job, the problem is human error. Unsuitable education and low awareness about the data risk, online privacy,and cybersecurity in general are the main issues humans have. More than 52% of breaches are solely based on lack of expertise from employees. When it comes to dealing with platforms and software, employees are simply unaware of the risks and have no idea where to look in order to spot them. Proper education and mandatory training should be compulsory activities for every company with digitalized services and platforms.

In order to strive in the Fourth Industrial Revolution, businesses need to take cybersecurity seriously and ensure their systems are working effectively.