Risk Management strategy | Data Analytics - GRM Institute

Data Analytics as a Risk Management strategy

The discipline of risk management generally and the increasingly popular field of enterprise risk management is around for years. The exponential growth of data also as recent technologies and techniques for managing and analyzing data create more opportunities. Luckily, even as the raw amount of data has grown, the value of the hardware to store data has decreased at an exponential rate. But such huge amounts of data present a problem: Somebody has got to manage and analyze it. All data isn’t equally important or relevant to the issues business executives got to solve or the risks they’re trying to manage. The explosion of knowledge has created a greater amount of helpful and relevant data, but it can stray in a good greater amount of useless, irrelevant, and distracting data. So efficient data management and analytics program are crucial to require advantage of the opportunities resident within the new flood of data.

One job of analytics is to sort the important from the unimportant and analyze and synthesize the information in new ways to create actionable information. Fortunately, the tools and techniques to manage large volumes of knowledge are progressing over the past several years. These tools are critical to the method of picking out the grains of useful intelligence from the vast quantities of distracting chaff that are characteristic of the many big data sources. When designing information systems or maybe just presenting information to business executives, it’s important for technical professionals to stay technical details to a minimum and specialize in the actionable information. The data must reach the choice makers in a clear form when it’s needed—the right information at the proper place and at the proper time.

All the recent technical developments and analytic techniques that make it possible to extract actionable information from a flood of data are all professionally exciting—if you’re an analyst. However, analytics for analytics’ sake doesn’t help a corporation. Often, analytics groups can remain isolated from the business itself. When such groups ultimately present what they need to be discovered, they’ll simply mention the part most interesting to them—the analytics process—rather than that specialize in the resulting information.

Where should a business begin to leverage the new data and risk analytics? It’s to start out with the info itself. So start collecting and storing the info that’s available to you. Every business generates vast amounts a day. Collecting, managing, and analyzing internal data is necessary; but by looking outside the organization at social media, government data sources, and third-party data vendors, a corporation can really begin to illuminate the environment during which it operates. Managing data for analytics may be a specialized field in its title, and a subject for an additional day. But the business which will effectively leverage data and analytics to manage the risks it faces are going to be rewarded by seeing the longer-term more clearly, making better decisions, and ultimately being more successful than those companies that can’t.

Contributed by Subham Mohanty (PGDRM Jan’20)

 

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