Other parts of this series:
The increase in international barriers to trade and business is forcing big insurers to rethink their business strategies.
Global insurers and other multinational corporations are having to take stock of their business strategies. They’re being compelled to rethink their plans because of the rise in international barriers to trade and commerce. These new restrictions are forcing multinationals to split and often replicate their digital assets and services. This digital fragmentation is costly and inefficient.
What’s more, digital fragmentation is prompting plenty of corporations to have second thoughts about entering new markets. Seventy-four percent of the multinational companies we surveyed expect to delay or abandon entry into a new market in the next three years or will exit a market in which they’re currently active.
Most of the senior executives we canvassed expect the situation to get worse.
Concerns about digital fragmentation run even deeper. CIOs and CTOs at these multinationals say digital fragmentation is forcing them to make big strategic changes to their businesses. They’re having to review their global IT architectures, the location of their data centers and their cyber-security capabilities (See illustration).
Most of the senior executives we canvassed expect the situation to get worse. Fifty-six percent believe national governments will strengthen controls over the transfer of data within their borders during the next three years. More than half of them expect greater constraints on the flow of data across national borders. As a result, 58 percent of executives say their companies will have to reconsider global business processes that rely on the free flow of data and technology. Nearly as many say barriers to globalization will make it difficult for them to fill critical IT positions.
In my next blog post, I’ll discuss four key steps that will help executives at multinationals implement effective strategies to combat digital fragmentation. In the meantime, have a look at this link. I think you’ll find it useful.