Alex Galbraith, CTO, Cloud Services at SoftwareOne.

Working with data can be a blessing and a curse. While it is the definitive factor that empowers digital transformation efforts, aids decision-making and stores an organisation’s most valuable and confidential assets, dealing with data is often a business’ greatest challenge. 

As the world’s dependence on data grows and the threat of cyberattacks increases, businesses need solutions that will them manage, govern, and safeguard their data more efficiently – and this is where digital sovereignty comes in.

Digital sovereignty helps people, businesses, and countries to stay in control of their digital assets and data. 

It goes beyond ownership of data – it means having full authority over everything from where and how data is stored and processed to fostering independence in technological development to enforcing local laws and regulations within the digital space. 

Ultimately, it offers businesses increased control, security, and independence of their data.

However, with the number of data-localisation measures more than doubling in the past four years, restricting data within national borders that is important, sensitive or could be linked to national security, dealing with data has become even more tricky. 

Data localisation creates barriers to innovation and seamless data flow – crucial factors for driving forward digital sovereignty. 

Regulations such as GDPR, DORA in the EU, and HIPAA in the US are prime examples where organisations must be compliant – or risk hefty fines and reputational damage if they do not measure up.

So, let’s explore why digital sovereignty is so important for businesses, how leaders can and should implement digital sovereignty practices, and how to overcome the challenges this key topic creates.

The importance of digital sovereignty

Why is digital sovereignty worth the investment and attention? It gives organisations increased control over data and keeps them compliant in the face of evolving data localisation regulations. 

By maintaining control over data processing and storing data within their geographic neighbourhood, companies can reduce the risk of unauthorised access to sensitive information, enhancing cybersecurity and risk management. 

This control enables organisations to more effectively comply with local data protection laws and reduce the risk of data breaches, severe financial penalties, and reputational damage.

Digital sovereignty also boasts infrastructure independence and resilience, enhancing an organisation's ability to weather threats to business continuity. By reducing dependence on imported technologies and services, companies can maintain critical operations even when international supply chains or services are compromised. 

This resilience was particularly evident during the COVID-19 pandemic, where organisations with greater digital sovereignty were able to pivot and adapt quickly in the face of international uncertainty.

Moreover, organisations with strong digital sovereignty are better positioned to compete in the global marketplace, as they can more rapidly develop and deploy unique digital solutions without being hindered by dependencies on global supply chains or foreign regulations.

Creating a digital sovereignty action plan

The benefits of digital sovereignty are clear. Any organisation that uses and holds data needs to build a digital sovereignty action plan to adhere to regulation and protect their digital assets, but also capitalise on the new opportunities these create. 

This action plan should consist of four pillars – regulation and compliance, data governance, digital infrastructure, and innovation.

• First comes regulation and compliance. Businesses should identify digital sovereignty champions in the business to keep on top of evolving regulations and conduct regular compliance audits. This will prove vital to stay up to date on the latest developments and ensure compliance with local legislation.
• Next, data governance. Businesses should implement robust data protection measures to fortify their defences and stop data falling into the wrong hands. This will also help to create transparency of data processing activities.
• The third pillar is digital infrastructure. Organisations must focus on developing robust, secure and compliant digital infrastructures that protects against the increased velocity and sophistication of cyberattacks, data breaches, and other cyber threats. Similarly, these solutions should be architected with resilience at their core, with clear business continuity and disaster recovery infrastructure and plans. Subject to the nature of their regulatory footprints, businesses would be wise to consider sovereign cloud solutions to their action plan, or alternatively enable sovereignty controls in existing solutions.
• Finally, innovation and a competitive spirit. As a core pillar to business success, balancing investment in digital assets with investment in talent and research and development will be key to unlocking innovation.

Balancing the challenges of digital sovereignty with future opportunities

While a digital sovereignty action plan sounds great in theory, there are still three major hurdles that businesses must overcome to make this plan a reality.

First, navigating regulatory and governance issues; organisations must comply with evolving, and sometimes conflicting, regulatory frameworks while still enabling innovation. 

This regulatory landscape is particularly complex in regions like the European Union, with GDPR and DORA leading the charge. Leaders must remain mindful of regulation and ensure compliance at every stage of their digital sovereignty journey.

Next, the technical obstacle of building and maintaining independent digital infrastructure while ensuring robust cybersecurity measures. This requires considerable expertise to bring infrastructure up to scratch and satisfy regulations. 

With big players such as AWS, Microsoft Azure, and Google Cloud Platform fast becoming commonplace, working with tech partners that specialise in digital sovereignty will be key to keeping operations and data secure.

Finally, the economic challenges of data sovereignty, including the high costs of developing domestic technologies, potential loss of economies of scale when moving away from global providers, and ongoing maintenance costs. 

Attempting to build and implement a digital sovereignty strategy in-house can prove significantly more expensive than turning to industry experts.

However, despite these obstacles, the benefits of digital sovereignty are worth the investment. Increased control, security, and independence outweigh the difficulties, and success often comes through innovative problem-solving and strategic partnerships that help address these complex challenges. 

For instance, choosing the right partners that offer all-round, all-in-one digital sovereignty services and having a global presence with local expertise will be crucial to getting the most out of your digital investment.

By embracing digital sovereignty, organisations can not only protect themselves from cyber-risks and boost their cybersecurity but can also gain independence, resilience, and a competitive advantage. 

As businesses continue to step up their up digital transformation efforts, a clear plan for digital sovereignty will prove vital to comply with regulations and protect their most valuable assets.