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Risk powers performance

Navigating the major risk trends in Energy, Resources & Industrials to achieve a competitive advantage

With disruption and volatility being commonplace in today’s business climate, organisations can gain competitive advantage by identifying the major drivers of change that affect risk and exploit them more effectively than their peers.

New market dynamics, such as digital technologies and globalisation, have created new risks within the Energy, Resources & Industrials (ER&I) industry ecosystem, prompting businesses to take a more holistic and opportunistic look at risk. By understanding risk more precisely at every level of the organisation, companies can exploit these new market dynamics more effectively than their competitors, thereby creating a distinct advantage.

Four key drivers continue to catalyse transformation in the business and operations of the industry globally—Regulatory scrutiny, digital transformation, safety and reliability, and sustainability. How are businesses driving and creating value through these catalysts?

In this report, we explore 10 specific risk trends characteristic of areas listed below, for which ER&I companies need to prepare:

Industrial controls: The ER&I industry has undergone a transformation in the way it operates large-scale industrial and infrastructure processes. Systems that were not previously considered to be at risk from external threats are now virtually all connected to networks.

Extended enterprise: Companies are increasingly relying on suppliers to perform core functions and manage key parts of their business. In the event of a fatalities, external stakeholders will not distinguish between a third-party supplier and the company itself.

Cyber proliferation: Increasing digitisation of services and processes has made sensitive data available to consumers and workers alike anytime, anywhere. Threat actors have embraced the expanded digital footprint and are becoming increasingly sophisticated about taking advantage of vulnerabilities.

Third-party risk management: Third parties that contract directly with an organisation have the potential to become “weak links” that affect security, reputation, or performance.

Integrated assurance: Increased spending on assurance programs has not always delivered the intended results. Many companies recognise that they are performing a lot of uncoordinated assurance, at significant direct and indirect cost, for too little benefit.

Product security: Consumer products now incorporate the ability to connect to networks, applications, and nearby devices. Connectivity enhances the products’ functionality, but it also adds significant cyber risks and potential points of entry for threat actors.

Digital advantage: ER&I companies are rapidly transitioning to digital technologies to remain competitive with little understanding of associated challenges. It is important that they create a trusted ecosystem to leverage new technologies while effectively managing the risks.

Treasury and cash management: Several companies have operations spanning multiple countries. They must maintain adequate cash resources within each jurisdiction to make investments and to support the day-to-day needs of the business, while managing liquidity, funding, and market exposures.

Sustainability: Meeting the energy needs of today while preparing for the changing needs of tomorrow are some of the most important risks confronting the industry. If not incorporated into an organisation’s sustainability strategy, these risks have the potential to disrupt the value chain of every business on the planet.

Energy trading: Organisations need a technology infrastructure that allows them to monitor their worldwide, long and short positions and exposures on a near-real-time basis and react to volatility in the marketplace.

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