Private Sector-Public Sector Cyber Security Issues
Meta-data/big data is increasingly becoming part of the everyday life. The volume, variety and velocity of data in production continue to grow exponentially, posing both challenges and opportunities for businesses (Intel, 2014). Many businesses in different industries are increasingly using big data to collect user information, storing it, and most recently using it in advertising to the unsuspecting customers. Companies collect information on the users from social media, browser history, communications and subscriptions made by users to different websites. One of the industries that have shown widespread use of meta-data is the retail industry, with Target optimizing its use of customer data to the point of causing controversy. Lately, however, there have been concerns over the use of this information, especially with users more concerned about their privacy. This is in the face of rising cybercrimes, a development that has caused lawmakers to pass regulation on the use of user information. The new stringent regulations on the protection of user privacy and information come at a time when most technology companies warn against these stringent rules citing that they (the rules) are detrimental to innovation (Sasso, 2012).
Goals help businesses in marking their future targets. They provide focus for what the business hopes to achieve within a specific time. It is important to note that goals keep changing, and after the achievement of previously set goals, most companies set other goals, mostly after a review of the previous goals set. As one of the biggest and most valuable retail stores in the world, Target has chosen and laid out specific goals for the company. According to Depass and Phelps (2011), Target had hoped to open between 100 and 150 stores in Canada over the next five years (as from January 2011). Moreover, the company hopes that Canada alone will contribute $6 billion in overall company income. This is in addition to rolling out six smaller City Target stores in the US, particularly in Seattle, San Francisco and Chicago (Depass& Phelps, 2011).
For its growth, Target has long-term goals of not only achieving $100 billion in sales, but also a continuation of earnings doubling. The company is looking to double its earnings to $8 per share in the coming six to seven years (Depass& Phelps, 2011). While these goals only look at the economic side of the company, Target additionally has goals focusing on the company’s social responsibility with specific concern on the environment, education, team-members’ wellbeing and volunteerism (Target, 2014).
While the aforementioned are Target’s goals, lawmakers in making economic laws, also have goals they hope the policies will achieve. Among the goals are stimulating, attracting and keeping businesses for the hope of economic development. It is the lawmakers’ intention therefore that by offering incentives, business can come to the local, state or even the national borders, offering jobs to the residents and stirring economic activity and growth. Thus, while companies such as Target set goals for growth in sales and expansion, lawmakers’ goals in business aim at economic growth and security. Further, lawmakers make economic policies with the hope of bringing higher income levels, reduce poverty rates and in so doing, ensure economic security.
To help achieve the business goals however, technology increasingly is becoming a part of the system. The retail industry in particular has been and still needs to use big data in achieving not only competitive advantage, but also to operate more efficiently. According to McGuire et al. (2012), meta-data offers a means to understand customers through the diverse points of contact with the retail stores. Therefore, through the diverse data point and the terabytes of data created and stored by businesses, it is possible to collect accurate and detailed information on the performance of a particular retail store. Meat-data allows for the collection of information from any source, helping in the exposure of variability, and in so doing, boost performance. Moreover, according to McGuire et al. (2012), “some leading companies are using their ability to collect and analyze big data to conduct controlled experiments to make better management decisions.” Target has specifically used this information in making important marketing decisions.
The competitive nature of the retail industry largely forces companies to devise means of achieving competitive advantage. Even more is that customers have varying tastes and preferences, and therefore the need to have as much information as possible to be able to meet all the demands. Meta-data therefore allows retailers to narrow, even further, customer segmentation and consequently be able to provide precisely personalized products or services (McGuire, 2012). Even more is the potential of meta-data to allow for the creation of next generation products and services for retailers ensuring that they remain ahead of their competition.
Although many retailers find the use of meta-data as advantageous to them, customers may not only find this outright creepy, but also as an infringement of the customer’s right to privacy. Most data collected about the consumer by the retail industry happens at the viewing or checkout points of these retailers. Problem with the collection of data at these points is the consumer’s loss of control of private data, which in essence leaves the consumer susceptible to exploitation by a variety of corporate actors (Newman, 2014). A case in question for loss of privacy is Target’s mailing of a baby catalogue to a 16-year old long before the girl even knew she was pregnant. Through an analysis of the girls browsing and purchases, Target was able to predict the girl’s pregnancy way before she knew she was pregnant.
Most retailers additionally engage companies that run big consumer-information platforms such as Google and Facebook. Through these platforms, retailers attract consumers with a variety of services and offers, most of which encourage sharing of personal information (Newman, 2014). The retailers, in collaboration with the big platforms, combine this information with other private information from other users. These then analyze the massive amounts of data collected channeling economic growth to the hands of a few at the expense of the unsuspecting consumers (Newman, 2014).
Further, retailers entice consumers with free services and coupons for the collection of consumer data. The data collected most of the time is sold to a third party, who uses this information for creation of further advertisements to lure other consumers. Although this data may be used for traditional advertising goals such as creation of brand awareness and promotion of new products, other uses are both unethical and against customer protection. Profiling customers from the private data collected only increases the use of exploitative and manipulative advertising (Newman, 2014). Most of the time, this leads consumers to making impulsive purchases. Worse still, profiled consumers can easily be offered higher prices oblivious of the fact that other consumers get better deals on similar items (Newman, 2014).
Most retailers use big data for advertising and product awareness. Manipulative advertisements, as aforementioned, are detrimental to consumers. It is under such circumstances therefore, that there is need for regulation of the retailers’ activities. Of importance are the retailers’ activities in the collection, analysis and use of customer information for advertising purposes. The need for regulation of retailers’ activities herein, therefore, is to ensure that the retailers comply with advertising laws. The advertising laws require that retail business should not make false or illusory claims regarding products, services or coupons. Regulation, therefore, ensures that the retailers comply with these laws.
Another consideration for regulation is protection of consumers and consumer protection laws. The laws dictate and prevent businesses (retailers) from the use of misleading and deceptive campaigns as a means of driving sales numbers. Regulation accordingly, ensures that retailers deliver on their promise to consumers, and only advertise services or products they can deliver.
As previously mentioned, it is possible, through profiling, for retailers to target specific customers and sell to them at higher price points than other consumers. Regulation will therefore ensure that retailers deliver on their discount promise. While business law requires retailers to honor advertised discount prices, regulation emphasizes this, ensuring that retailers remain true to their word and offer discounts as advertised. Moreover, with regulation, consumers may find easier ways to channel their grievances and seek punitive damages, while retailers get an oversight authority to check on any of their excesses.
On the contrary, the retail industry has argued that self-regulation and innovation has led to growth and better business performance. With the threat of cybercrimes, and possible cyber security regulations, retailers and other companies see the regulations as possible impediments to increased innovation (Sasso, 2012). Stifled innovation is likely to cause slowed growth in the industry, and the economy at large. In essence, the public sector will lose, and may not necessarily attain its goals of economic progress and security.
Increased regulation and compliance, apart from stifling innovation, may also drive up the cost of doing business for the industry. With financial reporting regulations already drilling holes in companies’ resources, cyber security regulations are also bound to add additional costs on retailers. Furthermore, with increased regulations, most companies (retailers) are likely to undergo compliance fatigue, which relates to only doing the bare minimum in achievement of compliance goals. Such actions only leave the retailers vulnerable to outside attacks, which they are in the first place keen to avert. Such actions by the private sector have rippling effects on the public sector. They strongly curtail the achievement of public sector goals of economic progress and security and social stability.
Regulations however, level the playing field for all players in the industry. Integration of data and information, as well as sharing of the information becomes easier with regulation. Therefore, organizations can work towards a common goal of fending off attacks both in the private and public sector, knowing that any cyber-attacks can easily have rippling effects on both the sectors. Even more important, however, is that increased regulation help restrain companies from going into extremes, and in so doing making themselves and others vulnerable to attacks. The realization of the benefits of regulation as aiming for the common good of all should help both the private and public sectors in working towards the achievement of their individual goals.
Depass, D. & Phelps, D. (2011).Target’s goals: $100B in sales and double earnings.Star Tribune
Intel (2014).Getting Started with Big Data Analytics in Retail.Intel. Retrieved from http://www.intel.com/content/dam/www/public/us/en/documents/solution-briefs/retail-big-data-analytics-solution-blueprint.pdf
McGuire, T. et al. (2012).Why big data is the new competitive advantage.Ivey Business Journal, July/August. Retrieved from http://iveybusinessjournal.com/publication/why-big-data-is-the-new-competitive-advantage/
Newman, N. (2014). How big data enables economic harm to low-income earners. Huffington Post
Sasso, B. (2012). Tech companies warn privacy rules will kill innovation. The Hill. Retrieved from http://thehill.com/policy/technology/258853-tech-companies-warn-privacy-rules-will-kill-innovation
Target (2014).Goals & Reporting.Target. Retrieved from https://corporate.target.com/corporate-responsibility/goals-reporting