Digital Risk Management: Managing the polycrisis

 

Over the past three years, the world has not only become more complex but also more dangerous. That’s why experts now talk about a polycrisis created by war and geopolitical tensions, inflation, climate change, and the consequences of the pandemic. To keep doing business amid these circumstances, companies need to have digitally supported risk management in place, as our recent risk management research shows.

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Digital risk management is evolving

No longer can the growing risk management requirements in terms of procurement and supply chains be manually fulfilled. Companies are therefore investing more heavily in digital solutions. Our annual risk management research shows a growing proportion of businesses are using digital solutions intensively for their monitoring. Compared with the previous year, this rose from 17 to 29 percent, while the proportion of businesses not using these remaining relatively constant at around 25 %. Evidently, businesses starting their digitization journey are swiftly convinced of the benefits provided by the tools, causing them to invest further.

Irrespective of whether companies build on existing solutions or start afresh with digital risk management, it’s important that all tools and activities are brought together within a network. Companies therefore need to set up an IT-supported risk control tower that will bring together all the relevant figures and information, with the help of artificial intelligence and advanced analytics evaluated in real time and visualized with the aid of graphics.

Do you generally record and evaluate risks systematically?

  • 12%: No statement possible
  • 56%: Yes
  • 32%: No

Source: INVERTO Risk Management in Procurement

Digital tools support decision-making

In view of the growing complexity of crises today, it is no longer a question of whether companies should invest in digital risk management, but what their investment should cover and which tools it should call on. Decision-makers in procurement should nonetheless be aware that digitization can neither assess the risks nor plan the relevant measures.

Digital solutions make the necessary information available when it is needed – but it’s up to your people to draw the right conclusions and make the right decisions.

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Authors

Sebastian Wellmann

sebastian.wellmann@inverto.com

Nele Heubeck

works as a Consultant at INVERTO Cologne. She advises companies from mechanical and plant engineering as well as the automotive industry and deals with the digitization of risk management.

nele.heubeck@inverto.com