Risk and control management are areas that are always going to be of chief importance when it comes to business operations. One poor decision can have serious ramifications to a business’s health – many of which can be avoided by appraising the risk involved. However, part of the issue is that risk and control management has its flaws, just like anything else. Here are some of the main examples of where things can go wrong with what should be your prime line of defense.
Risk management, by nature, is not a 100% failsafe. There are always outside factors with your business or the market in general that can make something that sounds good on paper fail. It’s important to have a healthy mindset and remember that risk management is about minimizing bad results, not eliminating them.
Auditing and risk management are not the same thing. Approaching one with the mentality of the other is a source of failure. For example, auditing is generally designed about mainly internal issues. What in your company’s process could lead to a negative result? In addition, the main goal is to enforce existing policy. Risk management takes a broader scope, trying to find both internal and external factors that could lead to a negative result. In addition, you may also need to question the existing policy to see if it makes sense with the data you have.
This last detail is something that can easily be lost when it comes to the new, data-driven world of GRC. Collecting data is great, but you need to make sure you don’t lose sight of the original goal of using it to impact your decision-making. Some people go too far in this early stage and end up with ‘list management’ over risk management. The good news is that there are tools to make this stage easier to navigate.
The field of GRC is rapidly evolving, and as new potential problems arise, it’s important to make sure that you have the tools to tackle these problems. One of the biggest factors changing things is the advent of complex data solutions, like Sofy. By taking the time to amass and organize all relevant data, decision makers can have the best platform possible before making a final decision.
The KPMG Sofy Suite is built on advanced data solutions to help companies make stronger business choices, raise their efficiency, and mitigate risk in their decision-making.
Through Smart Tech Solutions, KPMG unleashes its worldwide knowledge and experience in the areas of growth, performance, risk and regulation. With the help of data and technology, our smart tech solutions create insights into performance, opportunities and threats.