Enterprise Risk Strategy in a Modern, Interconnected Business World
23 September 2016 18:38
In the era when businesses still relied on paper and customer relationships were managed with smiles and handshakes, success was often based on an entrepreneur’s personal knowledge of the lay of the land. Over time, more sophisticated transportation and modern communication enabled businesses to expand in scope and terrain. As the nature of doing business increased in scope and possibility, so too did the nature of risk.
The modern, interconnected business world demands a modern vision of what risk means. We know that risk is not what it once was – a manageable series of responses based largely on a limited set of possibilities predicated on the past. We also know that the risk of today is future-oriented, dynamic, global, real-time – as full of the nebulous and strange as a science fiction novel. It has the potential to reap windfalls for corporate growth or deliver stunting reputational blows to brands in milliseconds. So, how should the modern enterprise look at risk?
Modern risk management demands top-tier attention. The dizzying pace of complexity, immediate ramifications of reputational threats and the correlation between risk management and bottom-line performance are all reasons for executives, and finance in particular, to give the concept of business risk new attention. “Today, there’s a growing recognition that risk management needs to be a part of a comprehensive strategic plan in which the risks that could prevent the organization from achieving its objectives are identified and addressed,” says PwC. The CFO’s perspective on company performance, data, technology and security all uniquely qualify finance to oversee the modern facets of risk management.
Along with the many possibilities created by this additional complexity, the finance leader of today is – and must be – relentlessly focused on the risks that this complexity poses. Over the past 20 years, the finance chief has evolved from risk observer to risk strategist. According to KPMG, “Today’s CFO is managing an ecosystem of expanding complexity – thinking and operating globally, leveraging financial data and analytics to achieve profitable growth, challenging and enabling business strategies, and capitalizing on a dynamic regulatory environment – all with a view to achieving competitive advantage.”
Vivek Katyal of Deloitte remarks, “There is no exact science for measuring risk. But with analytics, you can build measurement parameters that can help you establish and examine likely risk scenarios. From there, it’s easier to understand the potential impact of a risk – and start planning around it.” Risk doesn’t have to be simply a reality to be managed or a steep cliff to steer clear of; it can be reimagined as an adventure – and even your ticket to growth. Whether it’s a plateau, a mountain, or a cliff, finding it and making sure you’re ready to climb it when it’s in front of you is critical to your success – and survival.
Learn more about how Dun & Bradstreet’s comprehensive solutions can help today’s businesses navigate modern risk with data: www.dnb.com.hk.