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Governing the Infrastructure.

David A. Kelly

Risk Management in 2009--Who Cares?

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Okay, so it hasn't exactly been a smooth or low risk Q4. Everywhere you look, companies are dropping like flies, investors are finding that they've been fleeced, and who knows what 2009 and will bring.

 

Hell, it's even hard buying holiday presents--who knows which stores will be in business for returns or exchanges or what all those holiday gift cards will turn into once some our retailers go out of business in January. For many consumers and businesses, it's pretty scary out there.


Which brings us to risk management--how can organizations manage risk effectively in this type of environment? We've seen such huge changes in the business and financial landscape over the past few months, who knows what 2009 will bring?

 

Take a recent article by Greg MacSweeney in Wall Street & Technology that asked a roundtable of Wall Street experts about risk management and risk management technologies.

 

In fact, Rob Hegarty from TowerGroup makes a great point about process and policies vs. technology.

 

"Risk management [technology] is part of the problem. We are seeing more and more in the current crisis that the technology aspects are probably secondary to some of the other problems in risk management. What we are hearing from our clients is that they need to take care of things from a policy and process standpoint before they tackle the technology."

 

Rob's point is right on--technology usually isn't the solution, it's only part of the solution. A good technology provides support and enablement for the processes and policies of an organization, and the area of risk management is no different. Simply purchasing and installing risk management technology isn't going to get anyone out of this crisis. You have to have solid policies and practices in place.

 

Which brings up another aspect--I believe that, in terms of risk management, many organizations need to go back and rethink (or at least revisit) their fundamental assumptions and the constraints that they've put in place in regard to potential risks. Today's reality can be very different from previously conceived notions. That's why I think that January 2009 is a great time for organizations to take a fresh start on risk management by revisiting their basic business assumptions and altering their risk management plans as necessary.

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David A. Kelly's blog explores how organizations can increase the effectiveness and efficiency of their business processes and IT infrastructure through proper governance.

David A. Kelly

David A. Kelly is a monthly columnist and Blogger for ebizQ. View more

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