We will explore the world of technology and its effect on business. Does that sound dull? It’s not, trust me. We’ll also discuss digital transformation and its relationship to risk management.
In essence, digital transformation means integrating digital technology across all aspects of a business. It continues to transform how companies work and create value for customers.
Whether a shop moves online and sells products via an e-commerce platform, a restaurant uses an app for you to book a table, or a medical health organisation implements an electronic health record system, digital transformation is becoming increasingly prevalent.
It’s all about changing how we do business, making things faster and more efficient.
However, while digital transformation is an integral part of a successful business, some risks should also have risk management in mind.
Risk management means understanding and assessing risk, anticipating what could go wrong, preparing the necessary responses to maintain the viability of core business operations, and pursuing a clear strategic intent. Risk is not to be eliminated but understood, managed and used to create opportunities for the institution.
Adapting Risk Management Strategies
A risk transformation is essential. But running a digital transformation without a risk management blueprint is like getting into a raft on a raging river and then pulling a blindfold over your head. You might make it to shore. Or you might capsize.
Digital security is a relentless pursuit for any modern organisation. There are countless threats and vulnerabilities that could compromise an organisation, such as a data breach, a system issue, or a regulatory compliance matter.
Overcoming those challenges by adapting risk management for digital transformation could mean identifying risk hot spots in your digital transformation plan, assessing the risks’ severity, and choosing the best control and mitigation strategies available.
Consider Cybersecurity
The increased use of digital technologies means an increased vulnerability to cyber threats.
A risk management plan will need cybersecurity at its centre, such as performing system tests, employee training on cybersecurity, updating or upgrading security software, and preparing an incident response plan.
Data Privacy and Compliance
Digital transformation creates sheer amounts of data, such as customer data. It should be handled appropriately and only stored as prescribed by the relevant privacy laws.
A data risk management strategy includes auditing and monitoring data processing activities and compliance with regulations and controls to protect sensitive data.
Implement Training Programs
Employees must understand the risks of digital transformation and how to control and mitigate them.
Along with the other elements of the risk management strategy—residual risk, safeguards, control, and mitigation—training programmes may be conducted to educate employees so they can readily adapt to the new hardware, software, and processes.
Engage in Regular Evaluation
Risk is a moving target; you must monitor your measures, especially in a digital environment, to ensure you are ready for emerging risks. It can change your strategies to better deal with them.
Enlist a Professional
Working with a risk professional or consultant sounds intimidating, but it might be helpful. They can bring expertise and tools to assist with identifying, assessing, controlling and mitigating digital risk.
Final Thoughts
Digital transformation is a journey that can lead to a complete paradigm shift for the company, and it also entails significant risks.
The important thing is to understand risk management as a stepping stone – not a hurdle – to digital transformation success.
With a good strategy, you can surf the undulations of a digital age and steer clear of potholes.
Embrace the changes but do so with a keen awareness of the digital terrain.
Remember, the goal is progress, not perfection.
As you begin or continue your digital transformation path, realise it’s a continual growth process.
For those of us charged with implementing these powerful constructs, hang on to your risk-management paddle for the ride, gaze cautiously but not unfavourably upon the digital river, and guide that craft with a skilful balance of caution and courage.
