Traditional companies are increasingly concerned about their abilities to compete with digital natives, according to a Protiviti report.
Moving into 2019, business leaders are increasingly concerned about their organizations' abilities to keep up with those that were "born digital," according to research from the 2019 Executive Perspectives on Top Risks survey by Protiviti and the North Carolina State University Poole College of Management's Enterprise Risk Management (ERM) Initiative. Companies that aren't digital natives fear they will not be able to successfully transform operations and infrastructure in a way that is competitive with more digitally-savvy companies, the report found.
The report surveyed 825 board members and executives to determine their top business concerns going into 2019. With digital readiness taking first place, the results show that digital agility and scalability are important for organizations, the report found.
SEE: Digital transformation: A guide for CXOs (Tech Pro Research)
Survey respondents revealed the global business environment in 2019 to be somewhat riskier than in previous years. Additionally, corporations are more likely to increase investments in risk identification and management in the next year, according to the report.
The report identified the following 10 biggest risk concerns for businesses in 2019:
- Existing operations meeting performance expectations, competing against "born digital" firms
- Succession challenges and ability to attract and retain top talent
- Regulatory changes and regulatory scrutiny
- Cyber threats
- Resistance to change operations
- Rapid speed of disruptive innovations and new technologies
- Privacy/identity management and information security
- Inability to utilize analytics and big data
- Organization's culture may not sufficiently encourage timely identification and escalation of risk issues
- Sustaining customer loyalty and retention
"The perceived increase in the magnitude and severity of risks in today's ever-changing landscape should prompt boards and senior executives to closely scrutinize the approaches to proactively address emerging risks," said Mark Beasley, director of North Carolina's state ERM Initiative, in a press release. "Boards of directors and executive management teams cannot afford to manage risks casually on a reactive basis, especially considering the rapid pace of disruptive innovation and technological developments in an ever-advancing digital world."
Check out this TechRepublic article for tips on how to create an effective risk management plan.
The big takeaways for tech leaders:
- The top risk concern for businesses in 2019 is digital readiness, in comparison to other companies that were "born digital." -- Protiviti, 2018
- The global business environment is will be riskier in 2019 than in previous years, so business leaders should take measures in protecting their organizations. -- Protiviti, 2018
- Special report: Digital transformation: A CXO's guide (free PDF) (TechRepublic)
- Data governance: How to maintain innovation while managing risks (ZDNet)
- Digital transformation: A cheat sheet (TechRepublic)
- Moving fast without breaking data: Governance for managing risk in machine learning and beyond (ZDNet)
- 4 risk management areas you need to pay attention to in 2019 (TechRepublic)