Operational Risk Management or ORM has gathered sufficient steam in recent years owing to a multitude of different causes. With rising feasibility of business creations, empowered customers, global connectivity, market fluctuations, and many more, organizations are fast adopting operational risk management solutions to closely assess or monitor risks, predict their effects, and take necessary actions beforehand.
Needless to mention hence, business consultants, advisors, partners, and a similar facet of service providers are faced with a daunting task. Operational risk management has never been an easy feat and it requires profound analysis combined with careful and real-time data inspection, and data-based decision making. The monitoring period should be done 24/7 and any miss could result in drastic consequences for the firm. In multiple situations, a single risk incident has wiped away years of business profits. Hence, a business management consultant of the 21st century needs to be equipped with high-quality operational risk management services to accurately streamline the growth of its clients.
Therefore, what are the major risks hence that thwart the firms of today? Here are some below-
There are always two sides to every coin. As digitalization has brought multiple level transformations, especially in information storage and connectivity, it has also made the firm susceptible to hacking, phishing attacks, data crimes etc. Companies have stored, in their data systems, highly sensible information like business affairs, strategic plans, employee personal data, operational access codes, etc.
A hacking attack on this data can have catastrophic implications. Hence, proper solutions and privacy systems need to be in place for storing data and protecting it with continuous security monitoring.
IT systems, solutions form the core of any business operations today. Whatever the department might be-sales, marketing, manufacturing, administrative, etc, everything is now based on digital tools and systems.
A breakdown, network failure etc can cause huge operational loss and delay. A common happening of network failures resulting in dire operational losses is in banks.
Infrastructure health check-ups, operational monitoring, risk predictions, gauging which systems need to be replaced with new ones are some essential operations in infrastructure risk management.
Regulatory, Compliance, Legal Risks
Regulatory, compliance and legal risks are something that can be a big headache for a firm’s daily operations. Each region has its own set of trade obligations, clauses, etc and those need to be adhered to.
Also, there are other governmental laws that a firm needs to have through compliance with. Competitor products, patents, are some other important factors to consider.
Such risks are very prevalent and are a must consider when firms are doing business cross boundaries (local, regional, national, or international). A business management consultant needs to have through visibility of such regulations and advise firms effectively on building business strategies that don’t violate the relevant regulations and rules.
The digital universe has empowered consumers more than ever before. This has resulted in customers being more connected to brands, their activities, etc. Also, customers of today are themselves the major influencers of customer sales.
Positive reviews are one the biggest sale pullers and similarly, on the other hand, one negative remark can cost huge chunks of revenue. As businesses aspire to become ‘brands’, online reputation management hence has become a major faction of their daily marketing operations.
Fast replies, streamlined support, smooth buyer experiences, loyalty programs, offers, are some ways to maintain online reputation management. And, consequential falter in the above activities can put the firm in major reputation risk which can have an adverse impact.
Hence, business consultants need to be at ease with strategies that help businesses in maintaining a loyal, happy customer base as they look forward to capturing more of the market.