The demand for risk management solutions in South Africa is growing faster than the IT industry itself due to external compliance regulations businesses face today as well as internal pressures to gain keener insight into the organisation to avoid going through an Enron experience. To affect the required transparency and control, and gain 360-degree visibility over the whole enterprise in real-time is only possible via automated, well-designed, planned and implemented risk management solutions.
Noting the increasing interest in risk management, Amir Lubashevsky, director of Magix Integration, says public sector spending on risk management solutions is already 60% up in 2006 compared to 2005, while private sector spending is up 20% to 30% on last year.
"Even without legislative pressures, companies would still be looking at these solutions simply to increase visibility," Lubashevsky says. "The electronic world we live in has made fraud and industrial espionage easy and fast, making automated risk management guardians compulsory.
"In addition, changing markets, fluctuating currencies and global terror threats require constant vigilance if management is to make the correct decisions to minimise exposure and maximise revenue. Efficiently implemented risk management systems monitor and warn users of any deviations from pre-programmed norms, delivering intelligence in real-time and allowing for quick, informed decisions."
Contrary to the belief that government is always slower and less up to date than the private sector, the numbers show the public sector is adopting risk management faster than the business world. This may be because of the constant pressure on government to stamp out corruption and the need for public services to function under the magnifying glass of public perceptions.
"Because risk management and governance compliance rules are still little more than guidelines, the business world may nonetheless be considering its options," Lubashevsky notes. "When laws are eventually passed, we will see the private sector aggressively manage its risk and governance."
Already we can see the financial sector taking the bull by the horns. In an effort to be Basel II ready, this sector of the market is far ahead of any other in its risk management efforts. Unfortunately, the public healthcare sector is possibly the least healthy of all, although recent news from the health ministry indicates a change is on the way.
The adoption of risk management solutions in South Africa shows no signs of slowing as more executives realise the benefits these systems are capable of delivering at a reasonable cost. Lubashevsky explains that the returns on risk management investments is more than simply meeting the demands of local and international regulations, but more efficient business processes and operations, leading to lower costs and improved profits.
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