The unpleasant surprise and disruption from the COVID-19 pandemic have put a finger on a soft spot of most companies’ risk management and possibly also lack of resiliency and agility when an unwanted, unexpected critical event occurs.
Risk managers, if any exist in the organization, tend to live their careers in the back-office, mainly for compliance reasons and often focusing more on internal risks, like financial risks, project risks, health risks of employees, etc. Often, they are considered by the managers wanting to ‘get the business done, an ‘imposed nuisance’ rather than a strategic sparring partner, protecting the business. But my guess is, that in the after-wake of the pandemic crisis, it is going to change – in a big way.
Today’s business models and processes have been designed for cost-efficiency and competitiveness, focusing ‘on the core value and competency’ and moving anything else to a larger eco-system of sub-suppliers, complementary business partners, and external service provider. Nothing is wrong with that, provided that you are aware of the inherent and systemic risks, and that you monitor those risks constantly. In addition, you must be prepared to respond rapidly, if a risk materializes: Have business continuity plans ready, and agile processes and infrastructure in place – together with a ready-to-change workforce, that is both in mindset and tools equipped to support other-ways-of-working, work-from-home, on-line-trading, etc.
This means that the scope of work of the Risk Manager widens a lot from compliance to cover an ongoing ‘all-encompassing-risk’ monitoring and readiness-assessment.
IBM has worked with this for many years internally (having a global Business Continuity Management organization, a fully global and local set of business continuity and crisis management plans – including, since 2005 with the avian influenza, how to handle a local or global pandemic).
In recent years, however, we have also worked on tools, applying the newest exponential technologies like IoT, AI, and blockchain that can support our risk management and resilient operations. I would like to mention two of these because they are also available to our customers.
Business risk awareness and early warnings
For a company with international operations, monitoring major risk-related events at their own locations, important suppliers, and markets is an unaffordable task if done manually. Therefore, we have developed an application ‘ORI’ Operations Risk Insights unified with – customizable – 150 data sources monitored hourly to synthesize millions of records in real-time and analyze a risk-event impact on 12,500+ sites worldwide.
Top picture: Operations Insights Dashboard – entrance – (COVID-19 in beta – not released yet). Bottom picture: Dashboard example with locations, news, filtered social media feeds, etc.)
It is simple to use, providing a single, constantly updated view of world events and locations to instantly notify affected sites. And Operations Risk Insights is smart, as IBM Watson provides risk managers and analysts with proactive alerts and information that makes it possible for them to make clear, fast decisions for their organization.
After having seen the business benefits for IBM during major risk events (see video below) like Midwest Flooding, Hurricane Dorian, California Earthquake to mention a few, we decided in 2019 to make it available on IBM Cloud for clients and free for NGOs.
ORI covers today weather/climate change and other natural risk-events, geopolitical risk events and we are now building it out to cover the COVID-19 crisis and future pandemics.
I will be happy to arrange a deep dive into the solution, including a demo, if you believe it could be relevant for your organization.
Resiliency in your supplier network
Resiliency may be achieved on many different levels: On the business model, organization, process, and IT-infrastructure levels. Recent events, with factories and delivery chains shutting down or breaking up clearly illustrated the need for thinking resiliency into the supply chains. When stocks of goods emptied, like important supplies for healthcare providers or the famous toilet paper for retail customers, you quickly need to find out, if alternative suppliers exist, if they can be trusted, if they have the goods in inventory, their trading information, etc. This is a difficult, time consuming, and manual process at a point, where time really matters. It is exactly the mission of the blockchain-based global supplier network Trust Your Supplier, to solve this challenge.
Trust Your Supplier makes it possible for buyers and suppliers to quickly find each other, accelerate verification and onboarding processes, and gain near real-time insights into inventories. It combines a scalable blockchain for business networks, proven supply chain solutions, and a network of dedicated industry and technical experts.
Using blockchain and IOT in managing the data flow from ‘farm – to – fork’, is another supplier network, that provides a transparent supply chain, where bottleneck and delivery discrepancies are detected in near-real-time. This is, amongst many features, what IBM Food Trust can deliver.
Much more can be done to create resiliency and agility in your supply chain, and I encourage you to read our latest supply chain paper “COVID-19 and shattered supply chains” from IBM Institute for Business Value.
This current crisis and its widespread effects on global operations have exposed the dire need for proactive preparation. As organizations journey toward resilient, agile intelligent, self-correcting, operations, the most adaptable companies will learn from their current challenges and implement encompassing business continuity plans. Tomorrow’s leading companies will be those that continue optimizing their increasingly global operations, while also positioning themselves to effectively respond to the next black swan disruption.
The risk manager will be key to ensure a resilient and robust organization and business. Companies can start with appointing or recruiting an executive, with direct access to the Board of Directors, to start to build risk management competency in the organization. Risk management should be an integral part of the business strategy, all major investments, and regular business control.
If you have any further questions, please do not hesitate to contact me at firstname.lastname@example.org
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