Digital transformation can solve many challenges, including maintaining efficiency as the scope and complexity of business operations grow.
But digital transformation also creates new challenges – not least in the realm of compliance. As companies roll out larger, ever-more-complex digital systems, they also tend to face new challenges when it comes to meeting compliance requirements.
It’s only by managing challenges like these that organizations can ensure that digital transformation has a net positive impact, rather than undercutting the investments they make in digital technology.
To prove the point, here’s a look at how compliance can complicate digital transformation, and which compliance controls organizations should adopt to ensure that compliance doesn’t become a hurdle in their digital transformation initiatives.
Most businesses that are subject to compliance regulations have compliance controls in place before embracing digital transformation. The problem they tend to face is that those compliance controls no longer work as they digitize more systems (or migrate from primitive digital systems to more complex, cloud-native technologies).
For example, consider the compliance implications of moving data to the cloud. No major compliance framework forbids you from storing data in the cloud. But many – like HIPAA and GDPR – do require you to implement reasonable controls to protect sensitive data, regardless of where it is stored.
Thus, when you move more data to the cloud, you have to figure out how to keep it secure. And in many cases, the security controls that work on-premises aren’t as effective in the cloud. Access control rules that you enforce for local infrastructure can’t usually be lifted and shifted into a cloud environment. Instead, you’ll need to adapt those rules so the cloud provider’s Identity and Access Management (or IAM) framework can enforce them.
Likewise, in the cloud, you usually can’t isolate sensitive data from the Internet (in other words, “air gap” it) in the way that you could for on-premises data.
Compliance monitoring and auditing strategies, too, often need to evolve as part of digital transformation processes. The tools and data sources that power compliance monitoring on-prem may not work in cloud-native environments.
With that being the compliance challenge that organizations face when they embark on digital transformation, how can they solve it?
There’s no simple answer, of course, but the following practices can help.
First and foremost, make sure that you use a cloud service provider whose tools and infrastructure are certified to meet the compliance requirements that your business has to follow. (For example, Mezmo, formerly LogDNA, supports most major compliance frameworks.)
A compliant cloud service provider is essential because compliance problems that originate with your service provider could trigger compliance violations for you. You don’t get a pass just because the root cause of the compliance issue lies with one of your vendors and not your organization.
In large-scale cloud-native environments, teams typically use Infrastructure-as-Code (or IaC) tools to provision environments.
They do this mainly because IaC automates provisioning and saves time. But another advantage of IaC is that – because IaC configurations are spelled out as code that can be easily scanned and analyzed – you can automatically parse IaC configurations to ensure that they meet compliance requirements.
For instance, IaC scanners may identify situations where sensitive data is accessible to anonymous users from the Internet, which would likely trigger a compliance violation.
Sometimes, it’s hard to know exactly where sensitive data ends up in cloud-native environments in the first place. That’s especially true if you lift and shift a lot of data into the cloud rapidly as part of a digital transformation initiative, in which case you may overlook instances of sensitive information within your datasets.
Although tools that address this challenge remain relatively new, an increasing number of data loss prevention solutions are available. In general, these tools use machine learning to scan databases, storage buckets, and other resources, then identify data (like personally identifiable information or payment transaction data) that may be sensitive and subject to compliance rules.
Although fully digital data management offers many benefits, not all data needs to be digitized and stored indefinitely in cloud-native environments. And the more data you manage this way, the more compliance risks you are likely to face.
Toward that end, be strategic about how you manage data within digital systems and how long you retain it. For instance, if there is no business reason or compliance mandate that requires you to store sensitive data beyond a certain period, remove it so that you limit your exposure to compliance risks.
Digital transformation is a lofty (and, increasingly, necessary) goal. But it’s important not to compromise other priorities – like compliance – when you embrace digital transformation and software modernization. Be sure to factor compliance controls into your digital transformation strategy.