Risk has always been an integral part of business, but dealing effectively with risk is a progression. Indeed, history shows businesses adapting and coping better with risk through innovation. The importance of using information technology to manage risk is growing because today’s systems can automatically measure and analyze a much broader set of risk factors than individuals can, and do so more reliably. But a key challenge companies face in implementing enterprise risk management is developing a process for defining and measuring risk.

The objective of enterprise risk management is to optimize risk. By that I mean defining an organization’s risk tolerance and taking steps to minimize risk within the context of its tolerance. Ideally, optimization is accomplished through a formal process of seven steps: more

The Super Committee – more formally known as the Joint Select Committee on Deficit Reduction – is expected to announce soon that its members were unable to reach an agreement, according to several reports, including this one from CNN. If committee members are unable to reach consensus today – this the deadline to bring a plan to the CBO for its analysis – some $1.2 trillion in spending reductions will kick in, beginning in January 2013.

While it’s still possible (as of mid-morning Monday, November 21, 2011) that failure may be averted, the Super Committee had a number of obstacles to overcome from the start. A significant one was the accelerated schedule under which the Committee worked, says Marc Gerson, partner with the law firm of Miller & Chevalier, and an expert on federal tax policy. “Tax reform is a long, complicated process,” he says. “Doing tax reform in an accelerated time period is exceptionally difficult.” more

Two recent surveys by Experian, an information services company, show companies taking longer to pay. However, as they point out, the trend may or may not be an indication of the state of the economy. Instead, some firms may be slowing their payments as a cash management strategy.

Experian’s Q3 Business Benchmark Report, released October 18, showed that all companies paid their bills in September an average of 7.1 days after the contracted terms. That was a jump of more than 16 percent from September 2010. What’s more, the average percentage of dollars delinquent by up to 90 days rose by 11.9 percent, while the percentage of dollars considered severely delinquent – that is, more than 90 days past due – jumped 15.8 percent.

The increases are most pronounced at the two ends of the size spectrum. The percentage of delinquent payments jumped by 20.5 percent among businesses with no employees, and by 28 percent by businesses with 1,000 or more employees. more

A 2011 IBM study noted that 55% of business managers were embracing to speed business transformation. They were just a few steps behind CIOs, 60% of whom in the same study planned to use cloud computing.

Another 2011 IBM study of midmarket trends, here, listed the primary benefits midsize businesses are gaining through cloud adoption. These include cost savings, ease of management, redundancy, uptime, rapid provisioning, flexible pricing, and more.

Getting to the cloud, particularly a private cloud, has proven to be a challenge. Starting with virtualization as the foundation, IBM now lays out a simple progression companies can follow through basic to advanced cloud capabilities. more

As Workday continues to expand and the likelihood of its IPO becomes a more frequent topic of discussion, so does the movement of ERP systems to the cloud. Thus far, only a minority of companies have chosen to put their ERP and accounting systems in the cloud, but the numbers are growing and there’s evidence of success. NetSuite, for example, reported a 26 percent increase in its revenues to $145 million in the nine months up to Sept. 30, 2011. To be sure, this is not close to Salesforce.com’s size and growth rate over the past decade, but it does indicate a growing acceptance of the cloud for this software category, which I have commented on.

Moreover, I expect that as more companies adopt cloud-based systems successfully, we’ll see accelerating adoption by more cautious buyers in the classic diffusion of innovation pattern described by Everett Rogers (and later reworked by Geoffrey Moore).

So, amid these shifts, who wins and who loses? The answer is we don’t know yet. more