Risk Analytics: Driving Digital Transformation
We have all heard the quote, “No risk, no reward!” In other words, an individual or organisation needs to undertake certain risks if they want to achieve success!
A risk is an occurrence of adverse outcomes of any endeavour an individual or enterprise undertakes. Risk analysis is performed by every organisation to assess the probable risks it faces. The purpose of risk analysis is to help build strategies to mitigate those risks. Risk analysts work with forecasting professionals to strike a balance between taking risks and minimising them.
How Risk Analysis Works?
- The first step is identifying the risk functions in the process.
- These negatives are measured against a probability metric that measures the likelihood of their occurrence.
- Risk analysts estimate the extent of the impact made if a negative event occurs.
Some common risks a business faces include compliance risks, strategic risks, operational risks, human risks, security risks, financial risks, and more. Digital transformation is now one of the prime focus areas of businesses across the globe. Digitalisation has introduced new risks for a business such as cybersecurity risks, data governance, transformation risks, operational risks, etc. Businesses need risk management techniques to accelerate their digital transformation journeys because acceptable levels of risk functions can enable stakeholders to make intelligent risk decisions.
For organizations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed on organizational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like a living organism, will be imperative for business excellence going forward. A comprehensive, yet modular suite of services is doing exactly that. Equipping organizations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organizations that are innovating collaboratively for the future.
As organisations take on digital initiatives early and clear insights into threats and opportunities enable them to make risk-informed decisions. Risk analytics offer benefits like effective management of transformation risks, better payoffs for planned outcomes, etc. Every new endeavour has a certain level of risk involved. The problem is when the risk is too high and it increases the probability of failure. Therefore, when an organisation is considering digital transformation, it is vital that it evaluates all the risks involved and develops strategies for their mitigation. Risk analytics empower organisations to successfully implement digital transformation.
How can Risk Analytics enable Businesses to adopt a Digital-first Approach?
- An analysis can be conducted to assess if the risk functions identified are aligned with the organisational goals. This analysis will help the business take the necessary steps to attain the vision of the organisation.
- Business leaders and board members can engage with risk functions to ensure that the digital initiatives of the business are following the roadmap for digitisation.
- Assessing if the risk functions have the essential skills and collaboration tools to work with agility helps identify the areas of skill development. It will help build a framework for digital transformation.
- An organisation can assess if the risk functions are leveraging data and emerging technologies to streamline its operations. This assessment will enable the business to identify the gaps in the digital initiatives in operations function and correct them.
- For a service-based organisation, risk functions can be evaluated to check if they are supporting a more-digital organisation.
- Digital data enhances decision-making. Therefore, the business must ensure that the risk functions provide the right digital data to decision makers at the right time.
>Once all the risk functions are addressed, the organisation can build an informed roadmap for digital transformation. Risk analytics drive digital transformation by enabling organisations to make smart decisions with minimum risk of failure.
How Risk Analysis Accelerates Digital Transformation for Businesses?
- Risk analytics enable organisations to keep track and even stay ahead of their digital transformation roadmap.
- Risk analytics provides valuable insights to decision-makers. It helps them make informed decisions with better outcomes.
- Risk analytics facilitates effective management of transformation-related risks like cybersecurity, data governance, operational risks, and more.
- Risk analytics data offers benefits such as enhanced customer experience, better decision-making, and increased revenues.
Businesses across the globe are aware of the importance of risk analytics in their digital transformation initiatives. This is the reason why the risk analytics market which is worth $9.15 billion in 2022 is expected to reach $19.13 billion by 2028.)
Enterprises that are on their digital journey need to assess the risks involved in their digital endeavours. Risk assessment and analysis provide valuable insights that enable businesses to take the required steps for a seamless transformation. Risk analytics assess the risks involved in different functions and furnish this data to various stakeholders. The data facilitates informed decisions that increase the probability of success. The right interactions with risk functions enables businesses to leverage internal and external information to manage risks proactively. This gives them the confidence that risk factors are addressed as they progress in their digital transformation journey.