Effectively Managing Your E-Business Risk Profile - A Standard Approach for Assessing Risk and Protecting Corporate Stakeholders

Apr 23, 1999

Abstract

In an attempt to integrate new technologies and define effective e-business models, today's business leaders face daunting risk management challenges. Confronted with a new class of legal, technical and financial exposures, CEO's, CFO?s, CIO's and Risk Managers have a fiduciary responsibility to protect their e-business stakeholders at all cost.
It is critical that business leaders commit to finding the most competent risk partners with the expertise necessary to help proactively manage e-business exposures. E-business models have a dramatic impact on organizational structures and it will always be a priority to develop sound controls that secure and protect valuable information assets. In the fast new world of big wins and bigger losses, nothing short of a complete risk management solution will suffice.

With the networked economy, everything about business risk management has changed. E-business efforts are designed to slash expenses and create competitive advantages but conducting e-business can open companies to unforeseen, business-ending risks. Unprotected and uninsured exposures can destroy even the strongest e-business models: direct losses to damaged digital assets, lawsuits arising out of unmet expectations, out-of-pocket expenses due to lost data, lost income from hacking activities. And perhaps the greatest risk of all in the e-business world is the ruined reputation and catastrophic, unlimited financial consequences that stem from liability claims by damaged stakeholders. Definitely not the way to promote a successful business.

The message is clear: new exposures require new solutions. Like a chain, e-business environments are only as strong as the weakest link. Where continuous re-engineering is a necessary evil and all technical decisions must be tied to business realities, e-business models obligate executives to implement safeguards and loss controls throughout the virtual enterprise. Both within the organization and between trusted electronic partners, interdependent e-business relationships must adhere to best practices and proper planning in order to survive. From the top of the organization and throughout, trust, accountability, contractual indemnification and financial responsibility are essential for e-business models to achieve their lofty financial objectives. In this complex environment with your e-business success at stake, anything less than a total solution is really no solution at all.