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Adjusting to the New World of Risk Management

91% of 192 executives surveyed indicated that they plan to reorganize and reprioritize their approaches to risk management. If this survey by Deloitte is any indication for the rest of America, can you be sure that you’re prepared for that level of change? This article from the Wall Street Journal takes a look at just what it means when most survey participants indicate that they will change risk management – in particular, what that means for the CIO. The answer, unsurprisingly, depends: are CIOs seeing this as a threat or as a strategic opportunity? As the article explains: More than three-quarters (79 percent) of respondents stated that their approach to managing and responding to risk has changed over the past three years due to market volatility. Additionally, more than half of respondents indicated they expect more volatility to come in the area of technology risk. Taken together, these findings suggest that CIOs who are not thinking about how to allocate budget to improve risk programs are missing a strategic opportunity. CIOs work continually to keep core systems and processes running; far fewer recognize that risk is a growing concern for board members and other senior stakeholders. Those who can help automate risk monitoring, improve transparency, and build meaningful analytics and visualization capabilities could bring tremendous value to ERM efforts. As it turns out, despite the expansion of “risk related technologies”, the use of automation tools for managing risk are not widespread. This is essentially a missed opportunity by CIOs who refuse or are unable to embrace the call for enterprise wide risk monitoring. CIOs and indeed all of IT are at a point where they can become a strategic asset to the business through real-time, 24/7 automated monitoring – and to miss that opportunity can have more than just a single impact on the business. Obviously, deciding to pursue ERP solutions doesn’t mean the struggle is over. As the article explains, a good ERP solution will require in depth knowledge of what the company faces, support from the business side to pursue the solution, and continued optimization and rapid adaptability for any unexpected needs.

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