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Faculty & Research


How GDPR Changed European Companies’ Tech Stacks

Journal Article
As companies adapt their IT infrastructure to deal with new privacy regulations, they are coming up against a tradeoff between flexibility and efficiency. Highly integrated technologies facilitate the exchange and use of customer data. The problem is that these very interdependencies are an obstacle on the path toward compliance. Their efficiency has become a liability. That raises an interesting paradox. Can companies achieve competitive advantage by deploying less integrated technologies? To explore this, the authors of this article conducted a large-scale empirical study of 400 e-commerce firms to understand the implications of the tension between efficiency and flexibility on firm performance in response to GDPR. They found that firms that had built their websites for efficiency, electing tightly integrated services from closely linked suppliers, suffered disproportionately when GDPR came into force. In contrast, companies that deployed new combinations of technologies not extensively used before performed much better.

Professor of Strategy

Professor of Strategy