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By Ara C. Trembly

In today's technology marketplace, it seems obvious that three major trends have been simultaneously emerging -- big data, mobile devices/platforms, and the cloud. Yet it is also fair to say that these trends are interacting to the point where we see them converging to offer a new and different picture of technology that is a game-changer for risk managers and for the rest of the business world.

Morrell emphasizes the need for risk managers to leverage newer technologies and devices. Mobile, cloud and big data provide opportunities that include risks of managers becoming involved in more operational responsibilities. "If they have more access to data, and it is easier to use, that makes it easier for the different groups to work together," he said.

Research firm Gartner defines big data as "high volume, velocity and variety information assets that demand cost-effective, innovative forms of information processing for enhanced insight and decision making." Obviously such data and resulting insights are important for critical risk management decisions.

According to Michael Liebowitz, director of Insurance and Risk Management at New York University, big data means "a complete data set that we can mine. We have access to all institutional data, student population data, financial data, etc. As needed, I can pull data that we want and manipulate it inside our software to start to develop the risk pattern for a particular risk or operating unit."

On the mobile technology front, Liebowitz notes that he regularly uses an iPad mobile platform "to take my risk management program on the road. It enables me to have a fluid conversation with people, to show and demonstrate value. I can bring dashboards and analyses and show them real time data in system ... and make changes on the fly. My data is accessible all over the world."

Part of that accessibility comes because his data lives on a Web-based platform in the cloud -- what he calls a "Web-accessible data site." He emphasizes the importance of having a risk management system that is not necessarily accessible through NYU's own systems. "It's easier on the Web. I don't have to worry about VPNs, dedicated lines, etc. I can get it anywhere in the world. When I go back to a portable device, I can use a cellular connection to get to my data anywhere in the world. I don't need a wire connection."

"I believe big data has been part of the landscape for some time --decades at Kaiser Permanente -- as it continues its push for inroads in the practice of evidence-based medicine," said Lawrence W. Owens, senior manager, risk advisory, corporate risk management, for Kaiser Foundation Health Plan Inc. "Big data's growth will continue, creating the need for next generation tools that are readily available and affordable."

He said that he sees the cloud as "a cost shifting means [that] is important in making big data solutions available to a wider audience. Not all entities are able to provide their own big data solutions," he said.

Owens also said that mobile devices and platforms are growing the distribution ability for big data solutions, and concludes that, "The convergence of these trends enables risk managers to shine a brighter light on exposures they face, and solutions needed to manage them."

Convergence and Risk Management

"Risk managers can extract more value from business intelligence and analytics through the integrated platforms known as convergence," said Emily Cummins, director of Tax and Risk Management for the National Rifle Association. "This expands upon the principle we see underwriters applying to interpret claims data and loss histories for risk selection and pricing."

Convergence, she said, enables more efficient and effective information sharing, which can strengthen the intelligence, security, and defense communities. "This higher level, governmentalgoal resonates with risk managers because an organization's financial strength correlates to the rule of law, stability, and safety of the countriesin whichit operates."

According to Ron Carlson, RMIS & process improvement manager for LDS Church Risk Management, "These technologies are affording risk managers opportunities never before seen in our industry. Information is made available via self-service devices and platforms that allow the risk manager to take actions on leading indicators as well as respond real-time when an incident occurs. Cloud technology can be utilized to provide the architecture, security, reliability, and performance a risk manager needs to manage risk. Multiple data sources can be easily brought together to provide a complete picture of the risk exposure and opportunities."

Finally, Donald Light, director of Celent's Americas Property/Casualty Practice, observes that the convergence gives risk managers the ability to store larger amounts of data (big data) in the cloud; to run complex analyses against that data (possibly using cloud-based computing power); and to gain otherwise unavailable insights into better ways of managing their organizations' risks.

Portability in the Field

One key aspect of leveraging the new technology convergence is the availability and viability of portable devices in the workplace and in the field. While some organizations are standardizing on a single mobile platform and even providing devices for their workers, others are opting for a bring your own device (BYOD) policy, in which virtually any personal device may be used for business purposes.

According to Carlson, "The benefits of BYOD will be that solutions and tools will be developed at a more rapid pace.[It] will enable a risk manager to focus on managing risk and not on combining information sources and trying to make sense of the data."

NYU's Liebowitz said that his organization is somewhat of a "hybrid" when it comes to portable devices.

"We will connect any device to our network if you have a business reason, but we also have some university-owned devices. The more devices that can access the system, the more input we can have. BYOD enables fluid conversations in real time regarding risk issues. We're Web-based, doesn't matter what device we're on."

Another key to technological convergence for organizations is the role of the information technology (IT) department in enabling and possibly funding tech uses that will help risk managers. Indeed, said Morrell, risk managers routinely deal with massive amounts of data, but they get little information technology support because they usually are a small part of most organizations.

"For most companies, IT funding is a significant issue," said Owens. "This factors into the outsourcing question. Most risk management departments are small in relation to the operating divisions of a company."

The key issue, he said, is making the business case for technologies that support risk management initiatives.

"The business case should illustrate key functionalities and benefits, in addition to the sequencing of acquisition, design, development and installation. Sequential implementations help avoid overloading risk management or IT resources where feasible."

He added that risk management is not the only corporate function seeking IT help in order to get things done. "IT priorities will always move to mission critical adoptions first, making it critical for the risk management business case to illustrate the return to the organization on its investment in risk management technology."

Cummins provided an example. "There is tangible business value in reducing the lost time attributed tothe incomplete digital infrastructure," Cummins said. "For example, I want to know what happens in the six hours after the loss control site visit to a certain remote Russian foundry until the time the site report gets uploaded. That's lost time due to gaps in accessibility and together we can solve that waste. The flexibility to invest in innovation provides for cost savings if budgets are not locked into maintaining existing systems."

The role of IT also depends on the preferences and needs of the organization, said Carlson. "Many organizations have given IT the role of managing and driving technology process improvements. I believe that business should drive technology improvements and invite IT to the table as a business partner to act as an enabler of improved technology solutions. Building a partnership with IT is an ongoing process and is critical if a risk manager is planning to adopt the convergence technologies. Funding should not be a major issue, because the demand for these convergence technologies is coming from different areas of business. Companies can save money by developing solutions with these technologies. The key is communicating how a partnership with IT is a win-win arrangement."

ARA TREMBLY is founder of The Tech Consultant and The Rogue Guru Blog. He can be reached at riskletters@lrp.com.

February 19, 2013

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