New technologies should be part of an active risk management culture driven by a company’s C-suite.
One of the first risks businesses should address when considering a technology platform is low adoption, which is a direct result of underestimating the risk of change in behavior needed for success.
Low adoption is a risk when organizations do not deploy a top-down approach to socializing the change in behavior needed by everyone for the technology platform to achieve the intended return on investment (ROI). Every employee, as appropriate, needs to be invested in the risk management strategy before a platform is chosen.
Said differently: Technology is a core characteristic to an active risk management culture that needs to be driven by the C-suite.
The next risk consideration for businesses in regards to a technology strategy is to ensure a specific insurance problem is being addressed. In many organizations this insurance problem is in the form of Risk Waste, which is the direct and indirect inflated cost of claims due to a lack of connectivity, transparency and insights within the organizations risk infrastructure.
What follows are the answers to four other common questions about addressing technology and business risk.
How do these risks affect companies and their employees?
A low adoption rate can have a significant impact on the organization including but not limited to:
- Lower than expected and/or delayed ROI;
- Low morale within the project team; and
- Unnecessary potential employee turnover.
In regards to Risk Waste, the impact is directly to the balance sheet. If the company is not realizing the intended ROI, by improved efficiencies your bottom line will be affected by direct and indirect costs.
What kind of opportunities does technology present to businesses?
This, of course, depends on many factors such as the organization’s size, industry, workforce characteristics and risk transfer strategies. Similar to finding the right solution, companies that select platforms that are flexible enough to grow with their business goals will accelerate that growth by improving productivity and morale.
How can technology be used to prepare for and mitigate these risks?
Technology is core to reducing the impact of risk waste on an organization’s balance sheet. Timely detection of new events and trends, collaboration and efficiency among multiple stakeholders, maintenance of reliable metrics, non-digitized safety procedures, disparate processes between safety and risk management and lack of real-time dashboards are all areas that technology can address.
These additional productivity improvements allow technology to help mitigate risk by enabling risk teams to more quickly assess and address risks as they occur.
How can businesses determine which tech tools are best for their company?
The key to finding the right technology partner starts before an organization engages the marketplace. Organizations need to understand the change in behavior needed for the project to be successful and make sure the C-Suite is supportive of that change.
Next, develop a partner acquisition strategy that focuses on solving a specific insurance problem, not just a list of product features. A good technology partner should be able to identify and address these core problems, and have the flexibility to grow with your business.