Are you ready for the new technology that will change our world, again?
It’s not that long since we were dismissing the Internet of Things as something very much ‘next generation’. But, as you will see from Deloitte’s collection of articles (Deloitte Review Issue 17), many organizations are already starting to deploy related technologies. I also like Wired magazine’s older piece.
Have a look at this article in the New York Times that provided some consumer-related examples. Texas Instruments has a web page with a broader view, mentioning building and home automation; smart cities; smart manufacturing; wearables; healthcare; and automotive. Talking of the latter, AT&T is connecting a host of new cars to the Internet through in-auto WiFi.
At the same time, technology referred to as Machine Learning (see this from the founder of Sun Microsystems) will be putting many jobs at risk, including analysis and decision-making (also see this article in The Atlantic). If that is not enough, the IMF has weighed in on the topic with a piece called Toil and Technology.
Is your organization open to the possibilities – the new universe of potential products and services, efficiencies in operations, and insights into the market? Or do you wait and follow the market leader, running the risk of being left in their dust?
Do you have the capabilities to understand and assess the risks as well as the opportunities?
Do your strategic planning and risk management processes allow you to identify, assess and evaluate all the effects of what might be around the corner? Or do you have one group of people assessing potential opportunity and another, totally separate, assessing downside risk?
How can isolated opportunity and downside risk processes get you where you need to go, making intelligent decisions and optimizing outcomes?
When you are looking forward, whether at the horizon or just a few feet in front of you, several situations and events are possible and each has a combination of positive and negative effects.
Intelligent decision-making means understanding all these possibilities and considering them together before making an informed decision. It is not sufficient to simply net off the positive and negative, as (a) they may occur at different times, and (b) their effects may be felt in different ways, such as a potentially positive effect on profits, but a negative potential effect on cash flow and liquidity; the negative effect may be outside acceptable ranges.
With these new technologies disrupting our world, every organization needs to question whether it has the capability to evaluate them and determine how and when to start deploying them.
COSO ERM and ISO 31000 are under review and updates are expected in the next year or so. I hope that they both move towards providing guidance on risk-intelligent and informed decision-making where all the potential effects of uncertainty are considered, rather than guiding us on the silo of risk management.
Are you ready?
I welcome your comments.
For more on this and related topics, please consider World-Class Risk Management.