Written by Julia Carline for Alcea Technologies
In a previous article titled ‘5 Steps to Manage Your Risks’ it was noted that identifying and analyzing risks are among the first steps toward managing them. By spotting potential issues and ensuring they are properly documented, you become better prepared to prevent problems from actually occurring –– and better able to tackle them if they do.
To implement this kind of process practically, it’s necessary to do a little bit of forecasting to determine what hurdles you might face in a given time frame or amidst a given set of circumstances. With this in mind, we’ve taken a look at some of the top operational risks expected for businesses in 2022.
Supply Chain Disruption
According to Reuters’s post on the supply chain situation in 2021, complaints about supply issues are up 412% from the previous year. As the disruptions caused by the pandemic and its aftermath continue, experts indicate that issues aren’t fully going away anytime soon. Businesses urge consumers to wait as certain products arrive late (or not at all), and consumers are consistently commenting on the rising costs of everyday goods and services. These will continue to be major hurdles in 2022.
Adoption of Digital Technologies
As employees continue settling into hybrid and work-from-home situation, businesses are struggling to find tech stacks that fit their new needs. SaaS companies change their pricing and conditions from one day to the next, and updates and patches are constantly being rolled out to sustain the growing number of WFH employees. Additionally, with more employees accessing work-related and/or confidential information from their laptops at home, there is an increased risk of cybersecurity attacks; unfortunately, this comes as an E&T report on cybersecurity states that ransomware attacks rose by 151% in 2021. This places the adoption and application of new digital technologies or tools prominently among operational risks moving forward.
On a related note to that of digital technologies, cybersecurity should be looked at as its own risk –– and one that businesses are getting more vigilant about seemingly by the day. According to a write-up on management information systems degrees at Maryville University, job growth in information security analysis is expected to occur at a 31% rate over the period of time between 2019 and 2029. This has happened in response to cybercrime growing consistently more sophisticated over the last several years, resulting not only in the aforementioned ransomware spike but in all kinds of additional risks. The good news is that this job growth number indicates that businesses are taking the threat seriously. But for now, despite not being a new concern, cybercrime remains a major operational risk.
With new regulations popping up left and right, many businesses are finding themselves at greater risk of liability. A consequence of this is that some companies –– from SMBs to large enterprises –– now need to invest in lawyers or legal representatives to read through relevant regulations, legislative changes, and so on. Another solution is looking at RegTech compliance solutions, which Financier Worldwide claims can save companies 30-50% in operational risk and compliance process costs. There are many on the market, so we recommend a comparison analysis before choosing the one that’ll work best for your organization.
Inadequate Culture and Diversity
Following the so-called “Great Resignation” of 2021, companies are looking at ways to hire and retain talent. But there’s a tendency to overlook underserved or underrepresented communities. This by nature means that companies are limiting the talent they’re able to acquire. Additionally, publishing any job ad that either shows favoritism or discourages people from applying to a job solely based on their sex, religion, color, race, national origin, age, disability or genetic information increases the risk of legal action against the company. The important takeaway here is to include everyone in the talent search and hiring processes, and base choices on a person’s ability to perform in a position. And as a Binghampton University educator’s exploration of the topic concluded, inclusion starts with better management. In the meantime though, many businesses still face operational risk of inadequate diversity and non-representative culture.
With the last two years being, well, the way they were, no one knows what to expect in 2022. The best we can do now is to be as prepared as possible for risks and hurdles, and have contingency plans as often as possible.