One of the first risks companies face when considering a technology platform is low adoption, which is a direct result of underestimating the risk of behavioral change necessary for success.
Low adoption is a risk when organizations do not deploy a top-down approach to socialize the behavior change needed in everyone for the technology platform to achieve the intended return on investment (ROI). Every employee, if any, must be invested in the risk management strategy before a platform is chosen.
In other words: technology is an essential feature of an active risk management culture that must be driven by the C-suite.
The next risk consideration for businesses when it comes to a technology strategy is ensuring that a specific insurance issue is addressed. In many organizations, this insurance problem comes in the form of wasted risk, which is the direct and indirect inflated cost of claims due to a lack of connectivity, transparency and information within the organizations risk infrastructure.
Here are answers to four other common questions about technology and business risk management.
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:
- Return on investment lower than expected and/or delayed;
- Low morale within the project team; and
- Potential unnecessary turnover of employees.
With regard to hazardous waste, the impact is directly on the balance sheet. If the business does not realize the expected return on investment, by improving efficiency, your bottom line will be affected by direct and indirect costs.
What kind of opportunities does technology offer businesses?
This of course depends on many factors such as the size of the organization, the sector of activity, the characteristics of the workforce and the risk transfer strategies. As with finding the right fit, companies that select platforms that are flexible enough to scale with their business goals will accelerate that growth by improving productivity and morale.
How can technology be used to prepare for and mitigate these risks?
Technology is central to reducing the impact of hazardous waste on an organization’s bottom line. Timely detection of new events and trends, collaboration and efficiency between multiple stakeholders, maintenance of reliable measures, non-digitized security procedures, disparate processes between security and risk management and lack of real-time dashboards are all areas that technology can address.
These additional productivity improvements enable technology to help mitigate risk by enabling risk management teams to more quickly assess and address risks as they arise.
How can companies determine which technology tools are best for their business?
The key to finding the right technology partner starts before an organization enters the market. Organizations must understand the change in behavior needed for the project to succeed and ensure that the C-Suite supports this 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 solve these fundamental problems, 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 those of the author.