Business risk is an important topic for operations leaders to consider — especially because it concerns errors that could cost them time and money.
Every operations leader handles risk on a daily basis. It’s their job to assess and mitigate existing risks and develop strategies to avoid future ones. But the stakes are high, and consequences range from loss of productivity (while employees are busy remedying mistakes) to money wasted when deadlines and progress are derailed.
A risk management plan can help leaders to best manage risk and requires careful analysis to inform decisions about resource allocation for the sake of efficiency.
Ultimately, an operations leader’s goal is to convert unavoidable risks into opportunities for successful operations — and that’s no small task.
How compliance, regulation, and operational risk impact operations leaders
Operations leaders are constantly on the lookout for compliance, regulatory, and operational risks that could negatively impact how operations run. Changing laws and regulations pose risks to businesses that can’t operationalize necessary changes fast enough to remain compliant. Managing these risks can take time and resources away from standard business operations.
Operational risk involves mistakes or oversight that occur during day-to-day operations and must be managed quickly to avoid major disruptions. All three types of risk put added strain on operations leaders as they must align with all departments to mitigate any potential issues, taking up scarce time and resources.
To an operations leader, compliance, regulatory, and operational risks can quickly become overwhelming when not managed correctly. An example of such a risk might be overly complex, manual processes that lead to inefficiencies. Whether it’s dealing with customer service level agreements or implementing new systems, each risk type can cause unexpected inefficiencies and mistakes that end up costing the company excessive money and hurting productivity.
Solidify your risk management plan with business process management and automation
To stay on top of potential risks, operations leaders need proactive processes that anticipate, identify, and manage risks before they become a real threat to the business. If proper processes are implemented and automated, operations leaders will be able to confidently deploy accurate strategies for any situation and mitigate the chances of disruptive effects.
‘Process management and automation give operational leaders the ability to minimize risk more than ever before; it’s something all operational leaders should consider as part of their management strategy.’
Process automation further reduces risk by automating error-prone, repetitive, and manual processes, which improves data accuracy and process efficiency. This proactive strategy helps operational teams identify and remove potential mistakes before they occur, saving time and money. It also allows leaders to actively monitor progress in real-time, ensuring that any unforeseen risks can be identified and resolved quickly.
Examples include digital forms, automated document collaboration, workflows, robotic process automation (RPA), business rule management, analytic dashboarding, data integration solutions, and collaborative decision-making.
See how Community Colleges overhauled their internal processes and increased productivity and staff engagement by adopting business process management. The increased confidence and security of a consistent, well-defined process is proving to be a real motivator for staff engagement.
Ongoing process maintenance and governance
Processes are only useful when they’re regularly managed and updated to reflect the current way an organization does business. When processes don’t reflect current business practices, it can result in broken processes inconsistent with an organization’s way of working.
Many operations departments choose to work around process problems that slowly erode productivity and increase the company’s exposure to risk. The catalyst for change can be a lost customer, a breach in compliance or regulations, failed audits, or even reputational damage.
Good process management ensures that processes are regularly updated to reflect any changes and subsequently automated. This has the potential to drastically improve operations team efficiency by streamlining operations and identifying potential risks.
Broken processes = unmanaged risk
When Nintex conducted research to better understand the world’s most broken processes, we surveyed over 1,400 large organizations across 12 countries.
Respondents suggested that the operations department had more broken systems and processes than any other department. 77% said operations teams can be a barrier to automating their own processes, too.
Ready to learn about building out your risk management plan?
The eBook titled Risk management is a process problem can help by exploring:
- Top business risks operations leaders should know about
- Tips for taking a holistic approach to managing risk
- How companies are using process management and automation to manage risk