Risk Manager Facing the Digitalization of Business Models

Risk Manager Facing the Digitalization:- Beyond taking into account the paradigm shift represented by the digitalization of business models; this paper presents the impact for the risk manager of this evolution / revolution, in terms of updating the risk mapping associated with the transformation the organization of the company.

The Paradigm Shift Associated with the Digitalization of Business Models

The digitalization of business models is an irreversible evolution that companies face, whether companies adopt an offensive or defensive approach in the way of approaching it. From the point of view of the operational strategies to be deployed, two types of choice can materialize:

• Either develop new offers and new uses from digital, in a new logic of customer journey,
• Adapt the current marketing mix by integrating the digitization / digitalization dimension.

In both cases, this transformation of the company is conditioned by two constraints:

• The promotion of digital culture among employees by setting up a program to support change,
• A strong investment in the digitalization of business processes, support and management of the company.

Faced with such a context, the risk manager must anticipate the risks associated with such a strategy that can range from the transformation to the break-up of the current business model. As such, it must identify the processes most impacted by digitalization, carry out a specific risk mapping associated and propose ad hoc action plans to reduce the level of exposure to risks.

The risk manager must also assess the risks associated with the impact of digitalization on the governance and organization of the company, due to the emergence of different modes of sharing and exchanges based on agility and efficiency.

A review of the Management Processes, Support and Business impacted by Digitalization

As we have already mentioned, the corporate risk manager must identify sensitive or critical processes, or anticipate the creation of new processes that will be associated with the digitalization project. A detailed presentation of these critical processes is presented in Charts 1 and 2 below, with special mention of:

• Piloting processes: the impact of digitalization on the processes associated with financial communication (eg AGOA in life) and of course on the definition of the marketing mix, key to the digitalization of the business model. New processes emerge in this respect: revenue analyst, marketing business analyst, web traffic, etc.
• The business component: For example, by accelerating the dematerialization of the billing process and the use of computerized data exchange reinforcing the security level of inter-company transactions.
• Activities in support of business processes: the key role of IT processes as a key vector of transformation through the structuring of the exploitation of big data, the exploitation of data mining for example, but also the major contribution of HR processes as an actor indispensable for digital transformation and support for change. HRDs themselves need to set an example by implementing Skype recruitment processes, or distributing pay slips through virtual vaults.

The risk manager will have to assess the level of criticality of these reconfigured processes in the context of digitalization (business case modeling), identify the key associated women, critical resources and consider the associated back-up solutions.

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Of course, the evolution of processes or the emergence of new activities associated with the digitalization of the business model, are generating endogenous and exogenous risks that the risk manager must identify, in order to proceed to a raw quotation of these last, to define treatment priorities.

The need to build a Risk map Associated with the Digitalization of Ad-hoc Business Models

The main endogenous risk factors that can impact the company’s processes as a result of the digital transformation will, from our point of view, lead to an increase in the risk of invasion of the individual’s privacy, resistance to change management. and a real difficulty in creating a digital culture, a bad marketing segmentation in terms of defining socio-styles that are sensitive to the change in the customer journey. In summary, the risk manager will have a key contribution to play in this phase of re-engineering processes and the organization carrying opportunities associated with the digitalization of industrial business models