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As quoted recently in the Irish Times “fewer than half of Irish businesses are adequately prepared to deal with risks that could impact them” *, a reality that many businesses are currently grappling with.
Businesses are seeking advice, as the need to reinvent, reposition or re-energise remains front of mind. Transformation is happening across people, processes and technology at scale. Such change brings plenty of opportunity but also introduces risks that need to be actively managed, if the much-hoped-for commercial and reputational rewards are to come to fruition.
Businesses are looking for support in deploying risk assessments, reviewing their over-arching approach to risk management, arriving at their risk appetite and risk reporting framework and in many cases assessing the rigour and robustness of operational resilience or business continuity plans and structures.
Fundamentally most businesses have realised that they need to revisit their approach to risk management if they are to improve their operational resilience and enable their strategic and commercial endeavours.
An underinvestment by many in risk management in the past has resulted in significant and in many cases avoidable, business impacts. The absence of an integrated approach to managing risk has meant money has often been spent on addressing a small number of risks in silos, without an enterprise-wide view of risk across a business. In fact, the risk culture of many businesses has not moved forward significantly in recent years, despite distinct changes in customer, technology, supply chain and outsourcing models, all of which influence how business is done today.
What can businesses do?
Risk management does not have to become over-engineered but it does need to provide a transparent view of risk across a business and inform real time management decision-making, so as to best address business needs and the pace of change in a clear, proactive and transparent manner. All of this can be achieved without curtailing ideas or innovative thinking.
At the end of the day, business transformation initiatives are undertaken to build agility and adapt to market changes. Environmental, social and technological disruptions are impacting our lives and society at large on a daily basis. To keep up with new and emerging risks, businesses should revisit risk management programmes to best manage and mitigate interdependent risks associated with changes in people (employees, customers, suppliers), processes, systems and operations.
Accountability for risk management also needs to change. Risk can no longer be viewed as distinct and separate to the ‘day job’ but rather as inherent within each role or job description. This has to happen if risk management is to be truly embedded in a business, and in fact embraced. Ultimately risk should not be viewed as a chore or a cost but a business enabler and a critical success factor once leveraged effectively.
How we can help?
Keeping risk management simple is best and taking a holistic view of the what? why? and how? gives a business the best chance to exploit opportunities. Businesses that adopt this approach have the confidence of knowing they have boxed clever in managing potential exposures and can focus on the potential upsides.
Our Business Risk Services team help businesses sit down and decide how best to approach risk management in the context of what they want to achieve, how they want to be known and the opportunities they want to pursue.