Think about the most recent time your business encountered volatility. At those moments, the first things experienced leaders seek out are facts. Because they know that to make informed decisions when it matters most, they need the right information.
But in many organisations, that's precisely the moment when they start seriously questioning the quality of their information, their ability to interpret the signals coming from that information, and the mechanisms in place for transmitting data-driven insights throughout the organisation.
Whether the problem is outdated, incomplete, or inaccurate information, too much information, not enough, the wrong people getting the right information or vice versa—to name a few familiar challenges—information is at the heart of the issue.
New technologies can deliver more accurate risk information
While it's clear that information challenges cannot be solved by technology alone, risk management technologies have advanced dramatically over the past few years, and deserve a closer look.
As little as three years ago, risk management technologies didn't offer the ability to scan for regulatory updates, monitor online chatter, or even send automated process alerts using workflow. Today, these information technology driven capabilities are a standard part of the toolkit for risk-focused executives seeking to understand and keep risks, such as compliance and reputation, in check in the midst of rising volatility.
If you are thinking of reviewing your current risk management technology driven process and capabilities, in order to deliver timely and more accurate risk information here are three key criteria to help guide your decision:
- Efficiency and transparency. The world is constantly changing and organisations have to adapt to respond to new risks and take advantage of new opportunities driven by technology. Advances in tools for tracking, documenting, and reporting risk information can help companies reduce costs while improving the information's reliability, availability, and timeliness, helping CFOs to make better informed decisions.
- Awareness and alertness. Harnessing the potency of digital to engage with your customers, suppliers and employees may not only reduce costs, but can also improve your profitability and effectiveness. New capabilities for monitoring the internal and external environment for signs of risk events, and for integrating information across risk management and business silos, can help companies recognise and respond to risk events more quickly.
- Analysis and insight. Modern business analytics and visualisation tools can help companies extract valuable insights from both risk and operational data. For instance, analytics can help companies develop quantitative metrics for "intangible" value drivers such as reputation, forecast the likely impacts of a particular risk event, and identify relationships among apparently unconnected risk factors that might escape the unaided eye and mind.
Of course, all of this presumes a close, active collaboration between risk leaders and their counterparts in IT. If that collaboration isn't in place today, there's no better place—or time—to get started.
Marcus Boyle
Partner, Head of UK & EMEA Finance
Transformation
Marcus has 20 years consulting experience and is the partner in
charge of Finance Transformation in the UK & EMEA. Marcus has
published a number of articles and papers and is often quoted in
the press on how CFOs can successfully transform their finance
functions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
