Strengthening business resilience in a world of relentless risk
Today’s business environment is fraught with risk. Whether financial, economic, security, compliance, reputational or operational, the business risk landscape is ever-changing and ever-changing.
But what we’re learning, as we go through this era of digital transformation en masse, is that the organizations best prepared to manage and minimize potential risks are those that are structured in a way that allows them to recognize objective risks, to respond to and evolve as market dynamics change – quickly and at scale.
Understand the risk.
In order to fully understand the impact that unmanaged risk can have on an organization, it is imperative that organizations understand what business risk means to themselves and their stakeholders.
According to TechTargetFor Ivy Wigmore, âbusiness riskâ can be defined as: âanything that threatens an organization’s ability to generate profits at its target levels; in the long run, risks can threaten the sustainability of an organization. “
Risk, like any natural disaster, can be difficult to fully Defend against. But with modern technology and advanced data analysis, it can be predicted – and the overall impact of the risk itself can actually be mitigated.
Think of predicting business risk like predicting a tornado. In the same way that tornado skies turn dark and ominous just before the storm, there are tell-tale signs of an impending computer mishap. Meteorologists know how to look at the geography, time of year, presence of thunderstorms, barometric pressure, etc., to see if conditions are ideal for a tornado. Likewise, in the IT world, a change risk prediction solution can leverage an organization’s accumulated history of software changes to provide an ML-based early warning system to alert release management teams and changes if an impending production change is likely to fail and cause disruption in its wake.
In other words, predictive risk analysis is one of the primary tools needed to help IT teams predict and forecast the environmental changes ripe for an IT disaster to occur. Additionally, with incident prediction models in place, IT teams can better isolate areas of impact and prepare to proactively minimize disruption. In some cases, they may even be able to avoid an incident altogether.
Mitigation and management of business risks.
Risk prediction analysis is just one way for organizations to better understand, and therefore prepare, to tackle inherent business risks. Particularly in a world where digital transformation initiatives continue, organizations must be properly equipped to monitor and quantify risks early on, putting in place systems and processes to respond quickly to emerging risks.
While it is impossible to understand all of the potential business risks (at any given point in time) over time, machine learning and AI-based modeling are uniquely equipped to leverage historical data to better determine the main risk factors within an individual organization. In other words, one of the most powerful ways weapons organizations have to combat risk is their own data. It’s just about making sure that the analytics tools you invest in are best suited to manage and make sense of your information. As the saying goes, not all data analysis toolkits are created equal.
Organizations should also strive to embrace a culture of adaptability, so that risk management becomes a natural extension of business evolving processes, practices and products. Adopting and implementing Agile is one of the ways organizations can better integrate adaptability and flexibility into their cultural environments. 39 percent of organizations today say they have adopted Agile practices for this reason.
Senior Forbes Contributor Steve Denning Explain: “Instead of a company designed as an efficient steady state machine aimed at leveraging its existing business model, the Agile organization is a living organism that is growing, learning and adapting that is constantly evolving to exploit new opportunities. and add new value for customersâ¦ Agile recognizes that the future of a business depends on the inspiration of those who do the work to accelerate innovation and add real value to customers.
Business risk, especially in the 21st century, may not be entirely preventable, but it is manageable. Investing in the right analytics solutions, cultivating a culture that prioritizes adaptability, and continuously improving threat responsiveness are just some of the ways your organizations can not only build business resilience. – when these incidents inevitably occur – but also to ensure that the confidence of employees and customers in your organization remains unshakeable.
Gaurav Rewari is CTO & General Manager, AI & VSM Platform at Digital.ai