Nothing Ventured, Nothing Gained in Taking That Risk; Cindy Cahill, Enterprise Risk Services Partner at Deloitte & Touche, Explains Why E-Business Risk Management Is a Necessary Part of the Management Mix
Byline: Cindy Cahill
RISK management tends to be perceived as an accounting formality, necessary only for the compliance element of annual reports, rather than as a process to make and evaluate crucial decisions impacting on all areas of an organisation and its shareholders.
Although the latest research shows that companies are becoming less risk averse, their strategies for opening themselves up to risk still leave something to be desired.
A recent Deloitte & Touche survey, for example, found that 38 per cent of financial controllers hold a negative view of risk management, seeing it as largely a disclosure issue and an unnecessary drain on resources.
In the technology marketplace, risk management may well, until recently, have been viewed as going against the grain of true entrepreneurial spirit, but the volatility now being experienced by technology companies in all sectors has raised its profile as a vital ingredient in the management mix.
And for the millions of companies across other industries now embarking on e-business strategies, risk management is a means of navigating uncertain waters with more confidence and success.
The battle to establish e-brands and market share is cut-throat and understanding the relationship between opportunity and risk and embedding risk management into ebusiness processes can vastly increase the value of your company.
There are four key factors that contribute to effective risk management of e-business and they can be the difference between prospering and losing ground to the competition.
Service continuity is the most basic - customers won't tolerate poor service and it is all too easy for them to take their business elsewhere.
E-commerce increases your dependence on external providers, especially ISPs, to deliver goods and services.
You need to ensure that you have put in place performance indicators that will give you vital early warning signs of service degradation.
Part of any risk management strategy is being prepared for any eventuality and a pre-determined action plan for what to do in the event of an outage is essential. …