How to Manage Risk Through Information
The Information Age – are we still in it or are we past it?
In many ways, information is freeing. But it can also be paralyzing with so much access to data at the tip of our fingers. How can we decipher what information is relevant to our businesses and what to do about it?
In this article, we’ll address whether the reason you’re not making more money could be due to lack of information… and what to do about it!
Information is truly our only tool to make informed decisions and consider our options for business. While many wise mentors and advisors may preach that experience trumps information, keep in mind that all knowledge and experience is based on information and our use of it over time.
You’ll truly start to get ahead by understanding the impact information has on our economy and subsequently, our businesses.
Managing risk through information
Since the dawn of the internet and the start of the Information Age, organizations have been empowered to exchange information in ways many never thought possible.
This level of access to various types of information has become a foundational part of many business activities, and without access to this level of information, many businesses would cease to exist.
To ensure the continuity of many businesses, especially facing factors related to the COVID pandemic, information resources are vital to the success of these businesses. Access to information also allows businesses to implement appropriate security measures to help reduce the level of risk to an acceptable one.
In fact, almost all large businesses and corporations have risk management departments that focus on creating integrated risk management protocols. These departments are constantly assessing the available information and determining associated levels of risk.
How can small businesses use information to improve their cash flow?
If you are easily overwhelmed by the different sources of information, and required analysis, that are constantly flowing through your business?
Small businesses can implement a number of automated systems that can be connected to analytic tools and forecasting models that can help improve your cash flow.
Instead of making blind decisions or ones based solely on a single source of information, your business can access an entirely new level of transparency with regards to transactions, demographics, and other factors that directly impact their revenue.
This level of access to information can also help business leaders to model out various scenarios and their potential outcomes, based on different inputs.
The benefits of using information to manage business risk are not just seen on an IT or financial level. All departments of your business can benefit from access to information; from large, all-encompassing decisions to be made by upper management, to small project-related decisions by teams within the business unit.
After the Industrial Age came the Information Age. And while many experts consider us to be still deep within the Information Age, it is slowly becoming clear that the hopes and dreams of the technology that has been developed throughout this age is not being used to solve all our problems, as many had initially hoped.
Information is still abundant, and more accessible now than ever before. Technology and information has enabled many individuals and businesses to achieve great success that never would have been possible before this age. However, it has also added a layer of complexity to today’s world, with many struggling to even stay relevant.
The word “pivot” has become a mainstay in the vocabulary of many business owners and even the most successful tech moguls are fighting some powerful forces that come with our access to information.
That’s not to say information is bad. On the contrary, you just need to learn to pick your battles based on the information and analytics you have at your disposal, and make strategic decisions that will positively impact the trajectory of your business so that you may remain relevant.
To avoid analysis paralysis via access to too much information, you need to implement protocols and a decision-making process that makes sense for your business and aligns with your morals/brand values and allows you to continue into the future. We need to make peace with the fact that there may not be one “best” solution for the challenges our businesses are facing, but many possible routes to take that could lead to success.