Targeted technology for better risk management and resilience in uncertain times
Targeted technology for better risk management and resilience in uncertain times
BDO’s research among business leaders has highlighted the link between technology, risk management and resilience – as well as the many challenges that organisations currently face. Embedding a comprehensive yet simple-to-use risk management solution therefore offers a cost-effective and pragmatic way for businesses to improve their technological strength, risk insights and commercial decision making.
BDO’s report, Global Risk Landscape 2021, surveyed the views of 500 c-suite business leaders globally across a range of sectors. Questions investigated the impact of the COVID-19 pandemic and how businesses had responded, as well as risk themes related to innovation, technology and people.
The results show the clear link between technology and risk: 42% of respondents cited inadequate technology or lack of digital transformation capabilities as a top-three risk that applied extra pressure on them during the COVID-19 pandemic.
The challenging environment led many organisations to step up their investment in technology. When asked what changes their organisation made in response to the pandemic, the top response was investing in new technology or accelerating digital transformation efforts – cited by 36%. Strikingly, 57% of all respondents saw the acceleration of digital transformation as one of the top three positive changes stimulated by the pandemic.
Those who invested in technology during the pandemic found themselves cushioned from the impact: 73% of the firms that said the pandemic’s impact was “much less significant than expected” had prioritised digital transformation.
Our Global Risk Landscape 2021 research also found technology advocates emerging from unexpected c-suite roles. Chief risk officers (CROs) rank second only to chief financial officers (CFOs) in driving general digital transformation, increasingly taking the lead on deeper technological advancements like data analysis. When asked what changes their company made as part of its response to the pandemic, 40% of CROs and 47% of CFOs said they accelerated their digital transformation efforts, compared to 29% of chief technology officers and 36% of chief information officers. CROs are more than three times as likely to consider their use of technology as “predictive” than the average respondent (34% and 11% respectively).
The results indicate not only that risk management is a driving force behind technological innovation and improvement, but also that technology is essential in the evolution of risk management: from reactive, to proactive to predictive.
BDO’s separate bi-monthly survey, Rethinking the economy, samples the views of 500 medium-sized UK businesses with revenue of £10m-£30m. Results from our November 2021 survey identify the many challenges businesses are currently managing, and the associated risks. Asked to identify what single thing will have the biggest impact on their business over the coming year, respondents identified multiple issues including a lack of access to staff (14%), increased interest rates (14%), supply chain disruption due to global macroeconomic trends (13%), inflation (12%), supply chain disruption due to Brexit (12%), the reintroduction of further COVID-19 restrictions (11%), Government-imposed environmental and sustainability targets (11%) and access to funding or investment (11%). Some issues appear consistently in these surveys, particularly in relation to accessing talent to support business growth, exploring flexible and remote working, handling supply chain disruption and coping with inflation.
In response, our research shows that businesses are taking multiple actions, such as managing a reduction in demand for their product or service, restructuring their workforce, adjusting their pricing structures and reviewing their supply chain management.
Taking effective decisions in these areas requires balancing risk and opportunity. In addition, decisions taken in one area may impact on another: encouraging staff to work remotely across an international landscape can have unintended tax consequences, for example. Modifying supply chains could impact risks related to Customs issues, delivery times and costs.
The best way to deal with such risks is to better understand your organisation and its strengths and weaknesses, which requires good data analysis and effective risk management technology.
BDO’s comprehensive and effective Enterprise Risk Management solution – called Rhiza – provides a cost-effective, easy-to-use, and customisable solution. Rhiza helps to overcome the most common challenges organisations face when trying to create an effective and sustainable risk management framework: excessive complexity, lack of meaningful management information and low engagement.
- Rhiza is simple to use, bringing risks, controls and actions together into one place with an appropriate level of detail.
- It can quickly deliver accurate, insightful and timely management information; its clear and concise reports along with graphical representations help management teams to monitor, understand and manage risks more intelligently.
- Rhiza can be embedded successfully across organisations; its modern, web browser design enables users to focus quickly and easily on their responsibilities, making effective use of targeted notifications.
Rhiza provides a centralised, coordinated and up-to-date view of organisational risk across the business. By delivering timely management information it helps management teams to control costs, save time and stay ahead of the competition. Ultimately, Rhiza increases businesses resilience, regardless of the particular challenge being faced, whether pandemic, inflationary economy or uncertain supply chains.
Please get in touch to find out more about how Rhiza could improve risk management and resilience in your organisation.