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Study finds businesses unprepared for risks

A study that surveyed 500 risk leaders uncovered significant organisational, strategic, and technological barriers to implementing effective enterprise risk management (ERM). 

A study that surveyed 500 risk leaders uncovered significant organisational, strategic, and technological barriers to implementing ERM. 

In a commissioned study titled “Constant Disruption Is The New Status Quo,” Forrester surveyed 500 risk leaders to gain insight into the challenges organisations face when implementing an effective enterprise risk management (ERM) strategy.

The survey found that a significant 70 per cent of the respondents believed that optimized, real-time alerting would have helped them significantly or totally reduce the harm caused by the most serious or disruptive events that their organization faced in the previous year.

However, the study also found that a considerable 56 per cent of the respondents do not have real-time alerting solutions in place at present. Nonetheless, it is encouraging to note that 62 per cent of the respondents plan to implement or expand the use of such tools, while 54 per cent intend to increase investment in real-time alerting solutions over the next 12 months.

These statistics underline the growing awareness of the importance of real-time alerting and the need for organizations to invest in these tools to help mitigate potential risks

Forrester Consulting conducted research and identified four main findings. The first finding revealed that many risk leaders tend to adopt a narrow approach when it comes to systemic risks their organisations may face. As business risks become increasingly complex in the future, less than one-third of risk leaders agree that risks can come from anywhere.

The second finding showed that risk strategies have improved significantly in recent years but still have a long way to go. Only 36 per cent of respondents have a C-suite champion leading risk management at present.

The third finding highlighted that cybersecurity and real-time alerting capabilities are critical areas for future focus. Survey respondents identified cyber risk tools and real-time alerting capabilities as the most important features that their next risk management platform should have.

The fourth finding emphasised that successful ERM implementations require aligned leadership, vision, and technology. Organisations with highly effective ERM strategies were 27 per cent more likely to have a C-suite leader for ERM compared to those with lower-maturity organisations. C-suite champions can work across organisational silos and coordinate with other business leaders within the organisation.

Additionally, the survey found that only 18 per cent of respondents reported their current ERM strategies as effective or very effective across all five capabilities surveyed. These capabilities included identifying, evaluating, monitoring, responding to, and communicating about risk.

Forrester completed the study in Q3 2022, and the participants were decision-makers in physical security and security operations, cyber/information security, business continuity, human resources and employee experience, corporate communications, and supply chain roles. The survey focused on how organisations navigate risk strategies, technologies, and workflows.

“Following the unprecedented events of the past three years, this research illustrates that now, more than ever, it is crucial for businesses to have a system in place to discover and manage major physical and cyber risk events,” said Jason Edelboim, President and COO of Dataminr.

“These findings have been incredibly valuable to help demonstrate the utility of Dataminr’s real-time alerts—ultimately giving clients an earlier line of sight into high-impact events and emerging risks that could impact their organisations.”

To learn more about the study, Constant Disruption is The New Status Quo, commissioned by Dataminr, visit here.

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Yajush Gupta

Yajush Gupta

Yajush is a journalist at Dynamic Business. He previously worked with Reuters as a business correspondent and holds a postgrad degree in print journalism.

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