Deloitte report outlines key strategic risks facing businesses over the next three years
Deloitte report highlights need for business to better use tools, technology to monitor strategic risks
22 November 2015 – Global business executives jointly rank pace of innovation (30 percent) and increased regulation (30 percent) as the key strategic risks forecast to impact their business strategy over the next three years, according to the Risk Sensing: The (evolving) State of the Art report released today by Deloitte. Talent (25 percent) and reputation (24 percent) also ranked high.
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 percent 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 percent), compliance risk (66 percent), and operational risk (65 percent), and less often to strategic risk (57 percent).
- 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 percent).
“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.
To view the whole report, go to: http://bit.ly/1XU8IwM
About the Survey
The Risk Sensing survey conducted by Forbes Insights on behalf of DTTL was administered to more than 155 executives from companies representing all five major industries and geographic regions.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms.
Deloitte provides audit, consulting, financial advisory, risk management, tax and related services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries and territories, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte’s more than 220,000 professionals are committed to making an impact that matters.
About Deloitte & Touche (M.E.):
Deloitte & Touche (M.E.) is a member firm of Deloitte Touche Tohmatsu Limited (DTTL) and is a leading professional services firm established in the Middle East region with uninterrupted presence since 1926.
Deloitte provides audit, tax, consulting, and financial advisory services through 26 offices in 15 countries with more than 3,300 partners, directors and staff. It is a Tier 1 Tax advisor in the GCC region since 2010 (according to the International Tax Review World Tax Rankings). It has also received numerous awards in the last few years which include best employer in the Middle East, best consulting firm, the Middle East Training & Development Excellence Award by the Institute of Chartered Accountants in England and Wales (ICAEW), as well as the best CSR integrated organization.