Those of us that like to talk a lot about risk management, long ago bought into the idea that risk management is not just about preventing bad things from happening but exploiting opportunity. After all, ISO Guide 73 defines risk as the “effect of uncertainty on objectives.” For any business living in the world of digital risk, uncertainty can be extremely volatile, requiring very rapid shifts in management.
In the CIO Journal section of this Wednesday’s issue of The Wall Street Journal I think I found one of the best examples of risk management to cease opportunity. In this Journal article Walmart, Inc. provided insight into the benefits of its decision to build its own private cloud network, where 80% is now located in-house versus being housed at third-parties. In the article Walmart stated that their private cloud network “has helped… better target shoppers, …control crucial key functions such as price adjustments, inventory and returns,…[and] better protect customer data". What was particularly stunning was Walmart’s statement that they “can now make over 170,000 monthly changes to software that supports its website, compared to less than 100 changes previously.” That’s an astounding statement on the order of magnitude in nimbleness and agility. Certainly in this age of digital risk, the nimbleness and agility necessary to respond at high speed is critical to effectively managing uncertainty on objectives.