Third party governance and risk management
Extended enterprise risk management survey 2019
Deloitte’s fourth annual extended enterprise risk management (EERM) survey shows there is renewed focus on maturing EERM practices within most organizations. This appears to be driven by a recognition of underinvestment in EERM coupled with mistrust of the wider uncertain economic environment.
The survey’s key findings are:
- Economic and operating environment: Economic uncertainty continues to drive a focus on cost reduction and talent investment in EERM.
- Investment: Piecemeal investment has impaired EERM maturity development, neglected certain risks and adversely affected core basic tasks.
- Leadership: Boards and senior executives are championing an inside-out approach to EERM, which includes better engagement, coordination and smarter use of data.
- Operating models: Federated structures are the most dominant operating model for EERM, underpinned by centers of excellence and shared services.
- Technology: Organizations are streamlining and standardising EERM technology across diverse operating units.
- Affiliate and subcontractor risk: Organizations have poor oversight of the risks posed by their third parties’ subcontractors and affiliates.
How we help clients
For many organizations, their third-party ecosystem, or ‘extended enterprise,’ is an important source of business value and strategic advantage. However, as the reliance on third-parties continues to grow, so do the associated risks, bringing potential reputational damage and regulatory action.
Deloitte member firms experienced teams work with clients to develop governance frameworks which effectively identify and manage all forms of third-party risks, looking at both process and technology solutions to deliver value and meet contractual obligations.