The technology, media and telecom (TMT) sector includes companies of various sizes, across different geographies and with distinct business models. Yet all TMT companies devote significant resources to collecting, monitoring and analysing data.
For example, TMT companies generally house vast amounts of data on customer behaviours, usage, locations, preferences, movement, and relationships and use it to drive strategies, business models, service offerings and pricing. Knowing this, customers need to be able to trust TMT companies to respect the value and privacy of their data.
This can impose a duty of care and certain costs on a company; however, this presents an opportunity to build customer trust through robust controls. That trust and those controls can, in turn, provide marketplace advantage over companies that fail its customers in that regard. This is just one example of the gains to be realised through superior controls.
Deloitte has conceptualised the Future of Controls to help companies to address the risks and opportunities that come with digitalisation. The Future of Controls clearly applies to TMT companies, whether their business models depend on messaging, content sharing, or communication services, user-generated content, subscriber plans, or some combination of these activities.
This article frames key issues concerning controls at TMT companies, in the context of the Future of Controls.
A range of companies—and risks
Each company within TMT faces specific challenges and risks. For example:
All TMT companies require a control environment that can continually accommodate the need to address new risks and opportunities, as well as new regulatory requirements.
Shifting the perspective on controls
TMT companies tend to prioritise innovation and growth, often leading them to view controls as mainly fulfilling regulatory compliance demands. However, this view limits the value of controls, which can in turn limit the resources that management invests in controls.
While regulatory compliance is a critical factor in controls, it should not be their main driver. The main driver should be the risks the company faces in creating value and the ways in which management aims to address those risks. Companies that can be more efficient and effective in addressing risks will realise competitive and cost advantages. They will also be able to achieve regulatory compliance across geographies, accommodate new regulatory demands and stay ahead of evolving risks.
Regulators tend to look backward and focus on known risks. This has encouraged control environments that tend to be backward looking. Companies benefit when they create controls geared not only to risk events that have occurred, but also to those that may occur. This generates foresight as well as hindsight. It also enables controls that support the business strategy, improve performance and comfort stakeholders.
In addition, well-designed controls can enhance transparency into processes and performance. Real-time data analytics, key performance indicators and early warnings of changes in stakeholder sentiment or emerging competitors can position the company to address not only risks, but also opportunities.
Dialling up controls
The following steps can assist TMT companies in improving their control environments:
Leading TMT into the Future of Controls
A shift in the perspective on controls must come from the top. Senior TMT leaders and board members may need to actively broaden that perspective within the organisation and then commit resources to upgrading the control framework and environment.
Given rapidly developing risks and opportunities, technologies such as 5G, and ongoing social and behavioural change, the time to get started is now.
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