Thursday 21 February 2019

Pace of innovation ‘key risk for businesses’

DUBAI, November 22, 2015

Pace of innovation and increased regulation are among top strategic risks to impact business strategy over the next three years, according to global executives, a report said.

Global business executives jointly rank pace of innovation (30 per cent) and increased regulation (30 per cent) as the key strategic risks forecast to impact their business strategy over the next three years, a report said.

Talent (25 per cent) and reputation (24 per cent) also ranked high in the report Risk Sensing: The (evolving) State of the Art report released today by Deloitte, a leading provider of audit, tax, consulting, and financial advisory services.

The survey conducted with Forbes Insights, asked 155 C-level executives from companies representing major industries around the world about their companies’ risk sensing capabilities and the publication outlines an approach to developing and enhancing the risk sensing process. Risk sensing employs human insights and advanced analytics capabilities to identify, analyze, and monitor emerging risks to the organization’s business model, long-term viability, and ability to create value.

“The majority of executives surveyed have strategic risk sensing capabilities in their organizations.  However, these capabilities often overlook key elements, lack technical depth, or leave the organization open to the very risks that risk sensing should be protecting against,” said Fadi Sidani, partner and Enterprise Risk Services leader at Deloitte Middle East.

Additional key findings include:

•    Companies apply risk sensing, but less often to strategic risks - Eighty per cent of respondents use risk sensing tools.  Even though strategic risks tend to be most important to senior executives, the tools are applied most often to financial risk (71 per cent), compliance risk (66 per cent), and operational risk (65 per cent), and less often to strategic risk (57 per cent).

•    Management of talent - Two-thirds of respondents employ people with the knowledge needed to monitor, analyze, and act on risk sensing data. However, about one-third (36%) are less certain that they have the right people.

•    Traditional and new risk management tools are needed- Many executives believe both traditional and new tools are needed. However, when factoring in the pace of innovation risk, the survey respondents indicated that using risk sensing to leverage data is the key way to mitigate the risk of being left behind (49 per cent).

“A starting point for monitoring strategic risks would be to identify the long term objectives of the organization—those, that if negatively impacted, would alter the key forces that drive your sector.  Those forces can be organized into domains, such as economic, regulatory, customer, technological, operational, funding, and research and development, and include scientific, engineering, or other advances that could affect basic drivers of value, ” said Sidani. – TradeArabia News Service

Tags: innovation | Regulations | talent | Deloitte |

calendarCalendar of Events