Leading up to DLA Piper's 2018 Global Technology Summit on October 9 – 10, Margo Tank, a partner in DLA Piper's Intellectual Property and Technology (IPT) group, shares her insight on why organizations need to transform themselves with the right digital tools and technologies that will both grow and protect their business.
Tank concentrates on counseling commercial enterprise and technology companies on how to navigate operational digital transformation – which, she says, is a complex process that looks different for every client.
Why are organizations still wary of undergoing digital transformation given that we live in a digital era?
Digital transformation is about enterprises improving paper-based processing with digital tools. This includes different operational facets from electronic contracting tools to payments and compliance, as well as assessing challenges, opportunities and measurements for success.
A legal baseline enabling the acceptance and use of electronic signatures and records has been in place with the enactment of the Electronic Signature in Global and National Commerce Act in 2000. Notwithstanding a legal basis, many companies are just now moving to engage with customers and counterparties digitally. They've struggled with issues such as how to authenticate signers in an electronic environment, or how to present information in a way that results in a legally binding and enforceable contract when there is less regulation, case law or knowledgeable experts to counsel companies on how to make this switch.
Further, most corporate laws have been written with analog and paper-based transactions in mind. Some companies are looking for a clearer legal and regulatory path forward before proceeding to digital platforms and processes. Others are in need of business change management – which takes time, internal resources and buy-in from leadership. Most companies simply wait to move forward because there hasn't been a demonstrated return on investment.
Data is another consideration. Organizations are concerned with managing the different players in the ecosystem who might touch data that is collected. Data security, data ownership, data privacy and managing third-party risk are all top-of-mind for organizations thinking about migrating to digital.
Understanding the hurdles, what are the benefits to digital transformation?
Most people agree that there are a lot of efficiencies from going digital. It is clear that information will be more accessible, more transparent, distributed and easier to handle. Technologies such as smart contracts are going to facilitate faster payment with high-touch interaction from both the payer and the payee. Blockchain and other current marketplace technologies will revolutionize how we think about data, as well as minimizing fraud, errors and lost data.
The opportunities are exciting, but getting from point A to point B requires a lot of investment including leadership, effort and resources. All the while, everyone still has their day-to-day jobs to manage.
What would you say to an organization looking to make the leap to digital transformation?
Though it's tough, digital transformation can help companies keep their competitive edge. Today, everybody wants to do everything electronically, which is really pushing industries to move online. The customer demand for digital processes is huge as consumers are increasingly seeking efficient, well-designed, and easy-to-use platforms in their professional lives in the way they've come to expect from their personal devices. People have their devices by their side 24/7. Their smartphones are their photo album, their alarm clock, their payment device and how they transact business through shopping, banking and trading. It's all done quickly, inexpensively, efficiently and remotely.
In short, digital is in demand. Think about it. Five years ago, Wi-Fi on an airplane was a luxury. Today, people are annoyed if a plane does not have Wi-Fi. The same goes with digital processes. People want to be able to do electronic transactions of all kinds from anywhere, any place, anytime.
Finally, could you provide an example, from a legal perspective, of what the pinnacle of digital transformation might look like?
Imagine going to purchase or lease a car and entering into a loan or lease immediately after the test drive. You're sitting inside the car with an agent, and the legal documentation is presented to you on the dashboard monitor to sign electronically. You apply your electronic signature, and copies of the documentation are accessible on the dashboard and are emailed to you for later reference. Notarization is conducted by audio and video. For businesses, the relevant loan or lease documentation is now an electronic asset, stored in an eVault or in some cases a blockchain, and will be accessible and transferable to third parties with a push of a button. You'll be able load your credit card directly into the electronic signing solution system and purchase insurance right from inside the car. Everything is automated from there on. You can order groceries by voice controls and your credit, debt or prepaid card is charged, or even your virtual currency wallet. If you don't pay your monthly loan or lease within a specified grace period, for example, the smart contract will disable the car ignition system until payment is made. Telematics to monitor driving behaviors could be utilized to provide tips on safe driving or reduce insurance premiums. Use of technology in an ethical, transparent and legally compliant manner will provide a host of benefits for companies and their customers alike.
This is just one example of how companies could integrate digital technology into their operations, using it to connect with all necessary third parties and to efficiently drive a transaction from start to finish and beyond.
Margo Tank will be moderating a panel, The Rise of Machines: Smart Contracts and Digitization of the Corporate Enterprise, at DLA Piper's Global Technology Summit on October 10 at the Rosewood Sand Hill in Menlo Park.