In today’s complex and volatile global marketplace, companies are struggling with forecasting, the complex, two-pronged issue of talent retention and increasing labor costs, and ongoing global supply chain disruptions, to name just a few prominent issues. The good news is that companies are well aware of these concerns and see the need to improve their risk management positions in the coming year. According to a recent report from Protiviti, companies of every size — from established blue chip businesses to small startups — plan to strengthen their risk management processes in 2023.
In a time of increased risk from new areas at an unprecedented pace, it’s good to know that companies have action plans. However, today’s market uncertainty is putting constraints on budgets, and while new processes may be put in place, new headcount is unlikely. Here, we’ll cover three top trends risk management professionals will likely need to account for 2023 and how to better position your business to take them on.
Trend 1. New Risks Are Emerging at an Unprecedented Pace
Digital transformation and global supply chain trends have created a new dimension of risk for organizations. The workforce has been dispersed, and with many companies shifting to remote office work as the norm, processes have had to adapt. As a result, the digital transformation of businesses rapidly accelerated at an unprecedented rate. These trends have created major opportunities and also introduced a new dimension of risk for organizations. Technological advances have transformed operating models and the ways in which people work and live. This has reshaped stakeholder expectations, requiring companies to accelerate digital plans to create a competitive advantage. The ongoing disruptions to the global supply chain have also had a tremendous ripple effect across many lines of business. This environment requires a deeper recognition of the external and system risks that threaten financial and operational resiliency.
Current challenges specific to emerging risks is the lack of visibility into the impact that these risks will have on a company’s objectives. For risk management teams, there’s increased pressure to evaluate risks at a granular, organizational level. Technology can help with both of these issues. Software solutions are able to anticipate and identify impacts that various elements will have across multiple lines of business. Technology can also better align identified risks with organizational goals, putting them adjacent to strategic objectives, key performance indicators, and overall business entity risks.
Trend 2: The Velocity of Risk Continues to Increase
The increased pace of emerging risks, regulatory changes, and competition requires team to implement a proactive risk management program. Stricter regulations, compliance requirements and cut-throat competition have put more pressure on organizations, leaving them with less space for profit. The speed at which these internal and external risks are emerging are forcing organizations to rethink their risk management approaches and strategize how to make faster and better decisions — while also staying adaptable. Organizations must focus on being proactive when they look at emerging risks. If implemented effectively, risk management can provide a significant advantage as a foundation for sustainable growth.
The challenges to leveraging an advantageous risk management strategy are primarily based in legacy practices. Traditional risk management workflows can’t keep up with today’s needs. The cumbersome processes of collecting and organizing risk data — paired with the time-consuming analyses of complex information — can be paralyzing to an organization. In order to gain the agility and nimbleness needed to build a resilient business, there are technology solutions that can help. Standardizing metrics across the business is key to success. This enables a proactive risk management team to improve data collection, which in itself leads to efficient gathering of company KPIs and KRIs, and a connected risk dashboard can highlight areas of risk that might impact multiple company verticals.
Trend 3: Budgets Are Constrained as Risk Management Demands Grow
Economic uncertainty is forcing risk teams to address increasing risk demands with existing resources. The current post-pandemic environment, geopolitical uncertainty, regulatory changes, rises in inflation and recession fears are fueling the need for companies to be more innovative and to accelerate performance. However, business leaders are risk averse for all the same reasons and they are asking teams to do more with the same amount of resources — or less. In this environment, many leaders are hesitant to make new investments, and pressure on existing headcount is high.
The challenge this presents for risk management teams is that they are asked to provide risk insights in new areas without new resources. The good news is that purpose-built technology solutions also enable teams to improve their impact without requiring additional team members. Software can streamline and automate repetitive administrative tasks, including risk response information gathering and data for board reporting. This frees teams up to be more proactive and solutions-oriented in other areas of risk management without requiring any additional resources.
Risk Management Solutions for Your Organization
RiskOversight is an agile risk management solution that empowers organizations to make real-time risk-aware decisions that accelerate business performance and strengthen resilience. It helps to elevate risk management teams by streamlining the identification, assessment, response, mitigation, and monitoring of risks across the organization. RiskOversight allows users to centralize and unify risk data, streamline risk management activities, and provide stakeholders visibility into the top risks, trends, and overall risk appetite. Schedule a guided walkthrough to learn how RiskOversight can help simplify your entire risk management program.