NEW YORK, NY, USA, 24 April 2018—Organizations are placing a renewed focus on enhancing extended enterprise risk management (EERM) amid increasing dependence on third-parties. Yet progress towards EERM maturity has been slower than expected according to Deloitte Global’s third annual EERM survey, Focusing on the climb ahead.
Dependence on third-parties continues to grow, with 53 percent of respondents reporting ‘some’ or ‘significant’ increase in their level of dependence on third-parties. Yet, seven out of ten survey respondents believe that business and macro-economic uncertainties have increased the risks inherent in managing the extended enterprise.
Despite critical levels of third-party dependency, only 20 percent of organizations have streamlined their EERM systems and processes. 53 percent of respondents now believe their journey to achieve EERM maturity is two to three years or more.
This is a significantly longer journey than anticipated in earlier surveys, when respondents reported that this could be achieved in six months to a year,
said Kristian Park, EMEA Leader, Extended Enterprise Risk Management, Deloitte Global Risk Advisory.
"This reflects a more realistic time-frame, and we’d expect organizations to be closely aligning plans to address the expected regulatory outlook over this period."
While the main drivers for EERM focus on mitigating risk and compliance, there is an increasing focus on driving value. The business case for investment in EERM is now being driven by other factors that exploit the upside of risk, such as enhancing organizational responsiveness and flexibility, innovation, brand confidence and increasing revenues.
“This is a significant shift from the almost exclusive focus in the past on managing the downside of risk,” continued Park. “Organizations are now taking the concept of the extended enterprise to new levels of critical dependence to exploit untapped opportunities and power organizational performance.”
Overall, the aggregate survey results suggests there is still work to do for many organizations to become fully integrated or optimized in their EERM capabilities.
In addition to a focus on increasing maturity and making a renewed business case for investment, the report explores four other key areas where most organizations could benefit from further effort.
About Deloitte Global’s Extended Enterprise Risk Management survey
Deloitte Global’s 2018 EERM survey, “Focusing on the climb ahead,” is based on 975 responses from a variety of organizations across major industry segments and from 15 countries across the Americas, Europe Middle East and Africa (EMEA) and Asia Pacific (APAC). A record number of participants this year is reflective of the ever increasing profile and investment third-party risk management is getting within organizations.