{"id":12487,"date":"2023-01-19T11:55:46","date_gmt":"2023-01-19T10:55:46","guid":{"rendered":"https:\/\/www.dp-institute.eu\/?p=12487"},"modified":"2024-06-19T12:10:51","modified_gmt":"2024-06-19T10:10:51","slug":"the-competitive-edge-of-privacy-by-design-in-product-development","status":"publish","type":"post","link":"https:\/\/www.dp-institute.eu\/en\/the-competitive-edge-of-privacy-by-design-in-product-development\/","title":{"rendered":"The Competitive Edge of Privacy by Design in Product Development"},"content":{"rendered":"

Data privacy is becoming increasingly important for businesses in gaining the trust of their customers. Companies that demonstrate their ability to protect and secure data, both their own and their customers, have a clear competitive advantage.<\/h4>\n

Studies have shown that it is essential for a company to prioritize privacy and security in its business strategy. Data Protection Officers and product development teams should understand the value of incorporating privacy as a default feature into technology, with embedded privacy features at the conceptual and design stage.<\/p>\n

One approach frequently discussed in data protection is Privacy by Design<\/a>, which involves protecting\u00a0data through technology design.<\/p>\n

Today, organizations recognize the need to innovate, protect, and safeguard their own confidential data and that of their customers and business partners. However, data privacy and security has become a challenging task in the era of “big data” due to several factors:<\/p>\n

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  1. Social networking<\/strong>: Social networks allow businesses to connect with their customers 24\/7, but they also expose companies’ databases and information systems to cyber threats and malicious attacks, either intentional or accidental.<\/li>\n
  2. Globalization<\/strong>: organizations and individuals readily exchange information and data over the internet, which also increases organizations’ vulnerability to cyber-attacks and has led companies to heighten their data privacy and security efforts.<\/li>\n
  3. Fluid organizational boundaries<\/strong>: The COVID-19 pandemic has resulted in a new work culture in which working from home or outside of business premises is the norm. This makes it easier for people, systems, and information to be exchanged, but it also increases businesses’ vulnerability to a loss of financial, confidential, and personal data.<\/li>\n
  4. Increased risk of cyber breaches<\/strong>: data breaches can damage any organization, regardless of size. High-profile cases of cyber security breaches and data theft, such as Sunburst, the SolarWinds attack, and the WannaCry ransomware, have also enlarged the need for stronger data security systems.<\/li>\n<\/ol>\n

    Data Protection Officers must determine the most effective approach to data privacy in today’s complex digital business environment. Organizations must balance keeping high-grade data privacy systems and achieving financial and reputational gains for their business. Studies such as the one conducted by Cisco have found a high ROI for companies that adopt a privacy-by-design approach to product development. This approach offers several benefits, such as:<\/p>\n

    Fulfillment of Corporate Social Responsibility<\/strong><\/h3>\n

    Achieving Corporate Social Responsibility (CSR) requires companies to prioritize the security of employee, customer, and corporate data. Global Fortune 500 companies are currently investing more than $20 billion in CSR, highlighting the growing importance of data privacy and security. It is crucial to apply privacy policies from the design through to the implementation stage.<\/p>\n

    Privacy and CSR also overlap regarding ethical and moral considerations, as discussed in “Business Ethics European Review”. Respecting users’ data privacy builds consumer trust and sets a business apart from its competitors by establishing a competitive advantage.<\/p>\n

    High return on privacy investments<\/strong><\/h3>\n

    According to the Cisco report “Privacy Benchmark” (*), companies can experience significant returns on investment for their privacy efforts. One key metric that was highlighted in the report is the correlation between privacy maturity and sales delay. The report found that organizations that were not fully developed in their privacy practices had an average delay of 16.8 weeks in completing sales, compared to just 3.4 weeks for companies that had a more mature approach to privacy. This suggests that investing in privacy can not only protect a company’s reputation and customer trust but also have a positive impact on the bottom line.<\/p>\n

    Quality Software Development<\/strong><\/h3>\n

    The privacy-by-design approach encompasses all aspects of technology and keeps it on track. Successful implementation requires the right technologies, accurate data, innovative ideas, and skilled talent. These elements naturally contribute to software development quality through focused analysis and design throughout the development lifecycle. Privacy by design promotes smooth, error-free software development that meets the needs of customers, businesses, and legal and technological requirements.<\/p>\n

    Quality Data and Effective Marketing<\/strong><\/h3>\n

    Compliance with regulations such as GDPR allows companies to target their customers more effectively and collect data in creative ways. Users are also more likely to consent to the collection of their data if they trust that it will be kept safe. This enables companies to collect specific, high-quality data, save time and resources, and make marketing more cost-effective and rewarding.<\/p>\n

    Promotion of Robust Privacy Culture<\/strong><\/h3>\n

    Embedding privacy techniques into all business processes, technologies, products, and systems helps companies create sustainable, future-proof business systems by placing security and privacy at the heart of their business strategies. As awareness of data and information privacy grows, only businesses that respect users’ privacy concerns and demonstrate care through robust security features in their products and their business will remain competitive and profitable in the future. Therefore, companies are adopting the privacy-by-design approach from the outset of their business expansion.<\/p>\n

    Attraction of More Customers and Business<\/strong><\/h3>\n

    Businesses that apply default safety and privacy for customer data make a good impression on customers. Their customers will feel more confident using technical products with robust security features and will often consent to pay more for unique or distinguished features. Therefore, companies can generate significant revenue through product differentiation, which creates a competitive advantage for the business.<\/p>\n

    Product Differentiation<\/strong><\/h3>\n

    Built-in security features reassure users that their data and information are safe. That makes the product unique and more advantageous compared to other alternatives in the market. Adopting a data privacy approach as a core business strategy can set a company apart in its industry and provide differentiation benefits.<\/p>\n

    Attract and Retain the Best Talent<\/strong><\/h3>\n

    Highly skilled and experienced workers also want to work with the best organizations. They will seek out companies with established goodwill and reputation in the market. Organizations with skilled employees can become more innovative and successful and have more opportunities for growth and development.<\/p>\n

    In addition to the advantages of incorporating privacy by design into the product development process defined above, there are some more (secondary) gains:<\/p>\n