November 30, 2020
The world is changing all around us continuously. To continue to thrive as a business over next few years and beyond, we must look ahead, understand the trends and forces that will shape the business in the future. Thus the word ‘Risk’ has become significantly important part in today’s business, be it a large corporate or a small proprietorship.
Take a look at recent cases of political uncertainty (Maharashtra, Delhi or even UK, USA etc), Artificial Intelligence and Automation (Electric cars, smartphone etc), Cyber Risk and Data Breaches (Considering the world’s richest person’s mobile hacking), Severe Weather and Natural Disaster (South and North India, Australian bushfire etc), Changing Government policies (DeMo, GST, RERA etc).
While the above few incidents threatened the existence of some businesses, they have generated huge opportunities for others who adapt to the changing environment.
When our Indian companies want to compete globally, it is important that they understand the importance of systems and processes in their businesses. These processes have to be effective, efficient, mitigating the risk of revenue leakage and frauds.
In absence of understanding of the larger picture, business owners, at times, waste their energy at short terms and low risk issues ignoring the long term strategic risks. We had a client who was more interested in identifying if there are in excess bank charges (Total annual value: Rs. 4 lakh), if the suppliers have passed on quantity discount (Annual value: Rs. 1.5 lakh). However, he had no vision to insure his properties worth Rs. 20 crore, no provision for fire fighting etc.
Whenever there is less focus on process improvements, as the risk increases year on year, the cost of control breach far exceeds the cost of putting control itself. However, since the cost of control breach is a hidden cost, it is not noticed by the businesses easily till the time it becomes significantly high which at times may challenge the existence of business.
So let us be ready today for tomorrow by creating a long term destination with an effective Risk Management Strategy.
Founder of a new age Management Consulting firm N M Consulting with multinational and multidimensional experience to partner in business care