Organizations are increasingly pursuing digital transformation to drive down costs, discover new revenue streams and gain a competitive edge. According to the 2020 Digital Risk Report, 64% of surveyed North American organizations are extensively engaged in digital transformation.
With the substantial opportunities that digital transformation can provide to an organization, it can also introduce significant new risk as new technology and processes often have cross-organizational effects.
While organizations take advantage of the opportunities presented through digital transformation, it is critical that they not allow their GRC/IRM programs to fall by the wayside to keep pace with their transformation.
Key players in the program may rightly feel that their stringent GRC/IRM programs are slowing them down. So we have highlighted some of the top recommendations to pursue a digital risk management program, which will encourage organizations to pursue digital transformation while still maintaining a strong GRC/IRM program:
- Cost Benefit Analysis – organizations should first consider the costs and benefits that the digital transformation journey would have on each operational function.
- Teamwork & Collaboration – Encourage a culture of teamwork to break down risk management siloes. Foster collaboration between business units to share accountability for the risks that digital transformation imposes.
Organizations can start to break down siloes through:
- Executive Support – Get executives involved from the start. Doing so will guarantee continuous executive support throughout the program, will ensure the program is driving the right reporting and that reporting is being communicated in a way that each business unit understands. Executives can then help bring teams together.
- Culture change – Organizations should cultivate a risk culture. This is where the leadership team discusses the business’ key objectives and maps the potential impacts a risk could have on the business; mapping benefits and risks to the business helps to prioritize which initiatives will drive the most value for the organization.
- Communication – When stakeholders from various business units are involved, it is important to communicate the value of the program in a way that each business leader understands. Speaking in terms of risk and potential business outcomes establishes a shared language and harmonized metrics for all stakeholders when discussing the program. Tying digital transformation benefits and risks to the business provides context for business leaders in a language they understand. Organizations should take a consistent approach to how they assess risk and implement a single taxonomy.
A digital risk management program requires aggregated data across departments, including compliance, operational risk, legal, vendor risk, business continuity and internal audit, just to name a few.
Implementing a digital risk management program can help organizations make better business decisions, which helps to facilitate and gain the most value out of their digital transformation projects. A digital risk management program enables organizations to move quickly enough to take advantage of the opportunities that digital transformation provides—all the while staying in line with the governance, risk and compliance (GRC) policies and procedures that help to safeguard the organization.
To digitally reimagine and transform your organization is an exciting and enterprising endeavor which can lead to untold growth and potential, if, and only if, the additional risks are circumvented by the implementation of a GRC/IRM program.