Technology is driving significant changes in Australian business – but it’s also exposing organisations to new risks if they don’t involve the right people.
A recent poll from EY indicates that while 59 per cent of respondents think risk professionals are integral to any digital transformation in terms of building confidence and trust, 57 per cent deemed their involvement in such processes “limited or missing”.
Risk functions are critical for any institution, but they must not exist in isolation. By integrating risk professionals into your company’s transformation processes, you introduce massive benefits for the long-term.
1) Break down your silos
A 2017 Wipro Digital survey showed that half of all digital transformations fail, with a key driver of failure being siloed company structure. This is where the integration of your risk function into digital transformation can prove essential.
Using models like three lines of defence as a starting point, businesses should look to integrate those risk management functions into transformation teams. These teams should apply the same oversight to potential tech shifts as they would to a more traditional business function. This breakdown of established structure establishes an adaptability that enables your transformation to thrive.
2) Sharpen your business’ focus
The risk function is not just reactive – it is a body that identifies and intercepts potential risks before they can wreak havoc on your organisation. Applying this to digital transformation can ensure your planned changes do not fall into the half that fails.
In a world of constant disruption, risk professionals can deliver critical insight into unforeseen threats to transformation. Coupled with advancements in robotic process automation and machine learning, they can also drive smarter board decision making for future transformations.
3) Improve an institution’s reputation
A failed digital transformation doesn’t just set a company back strategically – it can have a massive influence on public perception. In an age where word of mouth and the 24/7 news cycle can cause critical reputational damage, mitigating the chances of failure is absolutely essential.
In this area, risk professionals won’t just be important for proactively identifying threats. Your risk framework can be applied to any failure, saving company reputation and learning the right lessons for future work. How businesses deal with transformational failure dictates how their customers view them moving forward – risk functions can be critical in this.
The exponential rate of change in technology means that soon, digital transformations won’t be isolated events – they will be a constant state that institutions find themselves in. Developing a symphonic strategy that incorporates the risk function wherever possible will prepare your business for a successful change.