One of the first risks businesses must address when considering a technology platform is low adoption, which is a direct result of underestimating the risk of behavioral change needed for success.
Low adoption is a risk when organizations do not use a top-down approach to socialize the change in behavior needed by everyone for the technology platform to achieve the intended return on investment (ROI). Each employee, as appropriate, should be invested in the risk management strategy before a platform is selected.
Put another way: Technology is an essential characteristic for an active risk management culture that must be driven by the C-suite.
The other risk consideration for businesses regarding a technology strategy is to ensure that a specific security problem is being addressed. In many organizations this insurance problem is in the form of Risk Residue, which is the inflated direct and indirect cost of claims due to a lack of connectivity, transparency and insight within the organization’s risk infrastructure.
What follows are answers to four more common questions about dealing with 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
- Possible unnecessary movement of employees.
In terms of hazardous waste, the impact is directly on the balance sheet. If the company is not realizing the intended ROI, from improving efficiency, your bottom line will be affected by direct and indirect costs.
What opportunities does technology offer businesses?
This, of course, depends on many factors such as the size of the organization, industry, workforce characteristics and risk transfer strategies. Similar to finding the right solution, companies that choose platforms that are flexible enough to grow with their business goals will accelerate that growth while improving productivity and morale.
How can technology be used to prepare for and mitigate these risks?
Technology is essential to reducing the impact of Waste Risk on an organization’s balance sheet. Timely detection of new events and trends, collaboration and efficiency between multiple stakeholders, maintenance of reliable metrics, non-digitized security procedures, different processes between security and risk management and lack of real-time dashboards are all areas that the 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 technology tools are best for their company?
The key to finding the right technology partner starts before an organization commits to the market. Organizations must understand the change in behavior required for the project to be successful and ensure that the C-Suite supports 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 issues and have the flexibility to grow with your business.
Michael Harmon is Aclaimant’s head of insurance partnerships. He can be reached on LinkedIn.
These opinions are the author’s own.