Even if businesses are compelled to “do more with less” in an effort to cope with the crisis, focus on risk management shouldn’t be tucked under the sheets, global consulting firm Ovum advised recently.

Ovum’s study revealed that firms are now beginning to rethink their risk management strategies, and are actually placing focus on an enterprise approach, away from the traditional siloed approach.  Because of this, risk management becomes an integral part of business management.

“The financial crisis has provided a very high profile example of how poor risk management practices can severely impact not only a business but also a whole industry sector,” said Helena Schwenk, senior analyst at Ovum and author of the report. “While the banking system recovers and readjusts from the crisis and moves to a more tightly controlled and regulated risk management environment, other industry sectors are advised to take heed of the risk management lessons learnt from this painful episode.”

Ovum said much of past failures regarding risk management stems from a lack of understanding about the discipline and its proper application.  The current crisis, it added, has highlighted the dangers of risk management in isolated silos, prompting the need for a more holistic view of risk management.
 
“The current economic crisis has also underscored the need to treat risk management not just as a strategic ideal, but also as an operational imperative,” Schwenk said. “Businesses need to make sure that risk management trickles down from high-level business strategy, objectives and goals to the operational coalfaces of the organisation so that all employees, at all levels, gain a company-wide perspective on risk.”