Lead the Way: Combat Tech Disruption Risk
Does your company use innovative technologies? How do you assess the risks arising from the disruptive, high-tech revolution? What are your challenges? These were among the questions we asked of more than 700 risk executives in the 2017 Excellence in Risk Management survey. Their answers were surprising.
The survey asked which of 13 technologies companies are currently using or exploring; 24% of respondents said they do not use or plan to use any disruptive technologies. Yet, various studies indicate that more than 90% of companies are either using or evaluating the Internet of Things alone, and 93% of companies are using or considering wearable technologies.
Why the disconnect? Respondents said that one of the top impediments to understanding the impact of disruptive technology on business strategy is that “other areas have greater priority.” Given technology’s ability to make or break a business there should be few things with greater priority.
More alarming was the fact that more than half of respondents said there is no risk assessment being done around disruptive technologies. That perception was higher among C-suite respondents than risk management professionals.
Foster Collaboration and Education
We believe the survey underscores a gap in understanding about the pervasiveness of some technologies. It also indicates that risk professionals may not have organizational support for a more holistic approach.
A collaborative, cross-functional risk approach can help close those gaps. Yet we continue to see a decrease in the number of organizations reporting they have cross-functional committees. This year, only 48% of respondents said they have such a committee, a drop from 52% last year and 62% five years ago. At the same time, 41% of respondents without a committee said their company should have one — recognizing that managing risk is more difficult and less effective when done from siloes.
Whether in a risk committee or otherwise, the role of technology in your company needs to be discussed frequently, openly, and collaboratively. A siloed approach — viewed by many as another barrier to understanding — will only make it more difficult to fully assess your organization’s risks.
The pace of innovation globally has made risks more complex and interconnected, leaving some risk executives struggling to understand how disruptive technologies affect their business strategies and risk profiles. Risk management professionals need to proactively educate themselves and their organizations about which disruptive technologies their companies use, invest in effective tools to assess and manage their risks, and play a leading role in evaluating the potential risks and benefits from the growing list of technological innovations.