Business risk emerges from both internal and external forces. This includes macroeconomic forces, industry specific risk, and internal company concerns.
To mitigate business risk, organisations should implement strategies and techniques to minimise impact. Understanding and managing business risk is essential to business continuity.
There are a number of categories of business risk including:
- Compliance and Legal
- Cyber Security
For the purpose of exploring business risk, we will look at the challenges associated with operational, compliance, and cyber security risks.
Cyber security has become a main focus for organisations, CEOs remaining acutely aware of the risks posed by cyber security threats; ranking them as the threat they feel most exposed to over the next five years.
All organisations are at risk of data breaches, but certain industries and businesses are prime targets for cyber criminals due to the nature of their business, assets, IT infrastructure, and attack vectors.
Organisations that maintain high volumes of customer and staff information, or assets such as currency are vulnerable due to the value of data making them targets to cyber criminals. These organisations need to ensure they have proper measures in place to monitor access to their data to reduce the chances of hacking and accidental data breaches.
Accidental data breaches can occur when user access is not closely monitored and audited. This is when users have access to data and may unknowingly be making it accessible to unauthorised parties.
Organisations that have a lot of attack vectors are also vulnerable due to the amount of surfaces that cyber criminals can get access from. Keeping control and limiting the amount of surfaces that you have to monitor is important and ensuring organisations do not thinly stretch their cyber security resources.
Managing business risk is a continuous process that requires planning and commitment.
Operational risk is various. It may regard staff recruitment and retention, business continuity (described above), or knowledge consolidation and loss.
Staff retention is a keen business risk in the current environment; volatile due to the changing nature of working expectations in the remote working world.
Retaining staff and skills needs to be prioritised, ensuring an organisations workforce remains satisfied. Addressing challenges like salary, development opportunities and job security can improve overeall employee experience.
Industries and businesses are regulated in different ways to varying degrees of severity by governments, unions, authorities, etc.
Ensuring your business is compliant with regulation is an important focus for many at the risk of audit, fine, and reputational defamation. Regulations may require large-scale business and technological change in order to become compliant. This is seen largely in financial services, healthcare, and government.
Managing business risk requires keen insight into an organisation. What risks will affect your organisation the greatest? Which can you afford to leave whilst you focus on more iminent risks?
Technology can be used to mitigate a lot of business risks, including knowledge consolidation (arising from lack of staff retention), cybersecurity, and compliance.
Automation is a great way to consolidate knowledge of a process and remove dependencies from individuals.
To automate a process or workflow, you must understand the activities and outcomes clearly. Even before you get to developing an automation solution you can see benefits from setting out on the project through creating requirements documents that define the process and the use cases as defined by the key stakeholders. This allows you to record process knowledge.
At this point, you can start finding ways to optimise and streamline without adding any technology yet.
Adding automation technology can help mitigate multiple risks, including human error that can affect compliance and staff satisfaction, by removing repetitive tasks from their workload.
Understanding where your data is being used and by who will help in locking down your database security – which holes you need to plug.
Software can be used to monitor and manage access to data. IBM Guardium gives organisations the ability to set custom policies against their databases, including setting alerts for set users or files, and assisting in the creation of reports, audits, and compliance processes.
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