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E-Privacy:
A Policy Approach to Building Trust and Confidence
In E-Business
Executive
Summary
1.1
The unprecedented global growth of the Internet, the
promise of E-Business, and the emergence of mobile business
have, and continue to have, a profound affect upon the
way organisations operate. The so-called new economy,
that leverages the benefits of technological convergence
and new business models, offers unparalleled advantages
for an immense variety of service providers and their
customers in the cyber marketplace. Providers see significant
economies in operating in an E-Business environment
that has global reach, with the prospects of cost reductions
being passed on to the customer. Similarly, for online
consumers, the Internet offers infinitely expanded buyer
information and a range of choices that are daunting
to comprehend.
1.2
However, in spite of these apparent benefits the transition
to the E-Economy has not been without problems. For
many organisations there is continuing uncertainty over
which operating model to adopt, and the rather intimidating
lessons of some high profile failures. The global E-Business
environment will continue to pose difficult and far-reaching
management challenges to leaders of online businesses.Some
of these challenges are already evident and have a profound
effect upon the "ways of doing business".
Among them, and of paramount importance, is the issue
of "How E-Business can maximise its value to consumers
and simultaneously retain their trust and confidence?"
Building consumer trust and confidencerequires thoughtful
analysis of the nature of the relationship between buyers
and sellers. Not only are consumers concerned about
sellers offering quality products and services, they
are also concerned about their ability to exercise control
over the use of their personal data. This is an issue
that relates to an organisation's ability to respect
and protect the personal data entrusted to it by consumers.
In the E-Business environment, protection of online
consumers' E-Privacy is a critical management responsibility.
In any E-Business initiative, that duty has increasingly
become a key determinant of business success.
1.3
The protection of personal data privacy is a corporate
imperative worthy of the attention of the CEO. This
does not mean that the responsibility rests solely with
the CEO, but that a measured response to personal data
privacy needs to be a top-driven.
In the USA the CEO may be assisted by a Chief Privacy
Officer, a relative newcomer to corporate ranks. The
consequence of this development is evident in management
thinking and commitment to best privacy practices.
1.4
In the context of E-Business, E-Privacy has to be established
as a core value that connects organisational culture
with the best interests of the consumer. The value of
E-Privacy can be viewed as an important indicator of
business success. Worldwide, many high profile business
failures are attributable to the lack of recognition
accorded E-Privacy, and the lack of commitment to it
as a consumer issue. The consequences of this oversight
can lead to an erosion of consumer loyalty, negative
publicity, and the loss of potential business. Such
effects may directly and adversely affect stock price
and market share.Not
the least of these consequences though is the risk of
litigation. If the early experience of the USA is any
guide then there is likely to be growing sensitivity
in Hong Kong around the rights of the individual insofar
as their personal data are concerned. If these rights
are violated then it is reasonable to anticipate that
individuals will seek reparation for an alleged infringement.
1.5
E-Privacy
is also a critical management consideration in evaluating
and implementing
E-Business initiatives, plans and proposals. Effective
E-Privacy planning and implementation requires the enterprise
to adopt a systematic approach. Activities in the implementation
cycle involve four components:
- E-Privacy
Drivers
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E-Privacy Strategic Planning and Privacy Impact Assessment
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The Implementation of E-Privacy Strategies
-
The Pursuit of Excellence in E-Privacy.
1.6
These components are the foundation to building an E-Privacy
Policy framework for E-Business. The effectiveness of
E-Privacy Policy needs to be evaluated against the following
criteria.
- The
extent to which it reflects and reinforces a commitment
to E-Privacy as a core value.
-
The extent to which it upholds the concept of informed
choice and consent regarding the purposes for which
a customer's personal data may be collected and use.
-
In the event of an alleged infringement, the provision
of a mechanism that offers online customers an effective
and efficient redress procedure.
-
Accountability and transparency: saying what you will
do, and doing what you say in terms of the protection
of personal data entrusted to online business providers.
In essence, the compliance measures adopted.
1.7
Having laid claim to the CEO's time, it is reasonable
to ask what the pay-off from this investment in E-Privacy
is likely to be? One answer to that question is that,
as some commentators have observed, it is not whether
an organisation can afford to adopt an E-Privacy Policy,
and related practices, but whether it can afford not
to do so. Simply put, the choice is no choice. There
is a clear articulation of the pay-off from E-Privacy
both in terms of competitive need, and the competitive
advantage to be derived. The latter range from the bottom
line, to building trust and confidence, to the long-term
rewards of consumer loyalty.
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