What are the biggest risks organizations will face next year?
JOYCE For many, cybersecurity, data management, and third-party vendor compliance will remain the biggest immediate concerns. Recruitment and retention of skilled employees will be an ongoing challenge. However, we are living in an unusually high period of general uncertainty. The economic and political environments, extreme weather, trade relations, regional military action, etc., all create the potential for "black swan" type risk events that auditors should be thinking about. This may require revising traditional risk assessment approaches to reflect the potential impact of these uncontrollable events. YBARRA The continual rise of automation, robotics, and the less-than-predictable geopolitical climate will impact how organizations do business and will challenge their resilience. There will be more pressure to ensure operating strategies and staff are agile and flexible enough to withstand a potential recession, impacts to supply chains, and a changing workforce. The talent and platforms that are creating value today may need to quickly shift and adapt as things change more rapidly.
What risks do digital transformation initiatives present organizations? YBARRA Organizations must ensure that digital transformation initiatives are prioritized and measured based on the criticality of their data assets. Undisciplined approaches that do not consider classification, access, and data security could incur more costs than the transformation is projected to save. Ensuring key players are involved in the development and execution of initiatives is critical to achieving higher success rates.
JOYCE The first risk would be failing to recognize the need to transform one's business model quickly enough, and to establish a clear vision of the desired end state. The second risk would be failing to effectively manage these projects. These transformative projects tend to exceed expectations regarding complexity, budget, resource demands on personnel, scope creep, etc. Equally vital is ensuring a flawed process is not digitized in the hope that greater use of technology alone will create value. Like most large projects, a digital transformation initiative requires clearly established objectives that support the stated strategy, adequate resources and support from senior management, continuous supervision, measurable metrics to gauge progress, and contingency and parallel operational capabilities...