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Few firms manage risk well

Few firms manage risk well

Companies fear the collapse of their IT systems more than they do terrorism, natural disasters, financial risk or regulatory constraints, but most do not manage IT risk effectively.

Companies fear the collapse of their IT systems more than they do terrorism, natural disasters, financial risk or regulatory constraints. But most do not manage IT risk effectively, according to a recent report by the Economist Intelligence Unit. The report, Coming to Grips with IT Risk, surveyed 145 senior executives worldwide.

The study reveals that only 13 per cent of respondents have a comprehensive IT risk management structure in place. Although they believe senior management is aware of the financial risks associated with IT failure, a mere 11 per cent describe their company's handling of IT risk as "highly effective".

Yet IT systems failure is cited as the greatest business risk by 27 per cent of respondents. The next highest risk is breaches in information security, at 22 per cent.

Other key findings include:

* Poor project management is the most common source of IT project failure. This factor is cited by 43 per cent of survey respondents.

* Senior business management does not understand IT issues adequately. Twenty-six per cent of respondents say this, while only 15 per cent say IT lacks understanding of wider business risk issues.

* IT risk will increase in the next three years. Almost every IT risk area will pose greater problems in the next three years than it has in the past three. Among respondents, 44 per cent fear increased risk of financial damage due to leakage of sensitive data, more than double the share of respondents who say this has occurred in the past three years.

The Economist Intelligence Unit is the business information arm of The Economist Group, publisher of The Economist. The study was sponsored by SAP, a provider of business software.

MIS Asia

© Fairfax Business Media

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