Risk Management: Moving from a Tactical to Strategic Strategy
Without risk there can be no innovation, and without innovation there can be no growth. And, of course, without growth there is little hope that your organization can effectively compete—and, ultimately, thrive.
It’s no surprise, then, that in a recent survey by PwC, CFOs ranked risk management as one of their top priorities for 2018 and the next three years.
But not just any risk management will move the business ahead. Organizations in the past have focused on tactical risk management—in other words, the risk associated with IT and operations. Companies today must focus on proactive, or strategic, risk—that is, risk that affects or is created by business strategy and objectives.
Today, risk comes from all directions and in multiple modes, and it has the potential to affect every aspect of the organization—from people to processes to technology platforms. In addition, the window for addressing risk in our global economy is getting smaller as the attack field–and the speed at which news is disseminated and shared–increases.
Organizations, therefore, need to think about risk—and risk management—holistically, across all data stores.
“Internal control is shifting toward the massive use of data to facilitate and maximize the identification of potential and proven risk,” notes the PwC report. “There are two benefits: it limits sample testing that is restricted in scope and optimizes the ROI of control operations.”
To accomplish these goals–while ensuring that the organization is meeting all regulatory compliance, financial, security and other mandates—companies must be constantly vigilant, supported by an integrated technology platform that effectively leverages the cloud, big data, automation, artificial intelligence and machine learning, among other technologies.
Companies must also expand their definition of a risk from data breach to disruptive technologies—and beyond.
“If you’re a Marriott, in your five-year strategic plan, did you imagine Airbnb?” asked Oracle CEO Mark Hurd at the Oracle Modern Supply Chain Experience 2018. “Did you imagine if you were Hertz, the effect of Uber?”
By thinking about risk management in a proactive rather than reactive way, companies will be prepared to imagine almost anything that may—and likely will–come their way.
To learn more about developing a strategic risk management strategy, check out these educational videos on the Oracle PartnerNetwork YouTube Channel.
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