Indian companies says tech adoption & digital disruption to affect businesses in 2021 & 2030 says Protiviti Top Risks Survey
Leading global consulting company Protiviti recently conducted its ninth Global ‘Top Risks’ Survey among 1081 leaders from global boards of directors and Senior executives. The survey included leaders from 62 Indian companies in the Financial Services, Consumer Products, Technology Media & Telecommunications (TMT), Manufacturing & distribution, Energy & Utilities, and Healthcare space. The survey was conducted to get views on a variety of Risks likely to affect their organizations in 2021 and also a decade from now i.e. 2030. The survey was conducted by Protiviti in association with North Carolina State University’s ERM Initiative.
The leaders were surveyed on 36 specific risks across the three dimensions of Macroeconomic, Strategic and Operational Risks.
Indian leaders said the technology and digital disruption that is currently taking place cross the verticals will definitely impact the businesses this year. The leaders felt the risks to spread the tentacles across the decade such that they will be experienced even in 2030. Some of these Tech & Data-Digital Risks to watch out for include — Adoption of digital technologies (AI, Robotics, machine Learning, NLP etc) may require skills that are in short supply in market place (No 3 in 2021 &No 7 in 2030) and may affect the businesses. Similarly, the rapid speed of these technologies may outpace an organization’s ability to compete (No 9 in 2021 & No. 4 in 2030). Inability to use Data Analytics and ‘Big Data’ may significantly affect core operations in organizations (No.7 in 2021 & No. 2 in 2030).
The leaders were also worried over the shift in the consumer behavior post pandemic, to digital channels that may continue to impact customer demand for their core products and services (No 1 in 2021 & No 8 in 2030).
“The Top Risks survey clearly shows digital adoption (e.g. artificial intelligence, natural language processing, robotics etc.) will continue to be a top risk for organizations even in 2030. This clearly indicates that digital adoption gaps will continue to remain unbridged even a decade from now. Even in pandemic, organizations which were more digital as compared to others were far more resilient. It is the right time for the Boards to closely examine digital adoption and put this on their agenda,” said Sachin Tayal, Managing Director, Protiviti Member Firm for India
The government policies surrounding public health practices, social distancing, return-to-work, crowd limits, and other pandemic-related regulations and protocols may significantly impact the performance of businesses in 2021.
This Risk came at No 2 in 2021 among Indian leaders surveyed. This was also the topmost risk in 2021 among global organizations.
Economic conditions in markets, particularly related to unemployment and government stimulus may significantly restrict growth opportunities for organization, formed the top number two risk in 2021 among global organizations.
Shift in the consumer behavior to digital channels that may impact customer demand for core products and services, formed the top number three risk in 2021 among the global organizations surveyed.
Digital adoption skills in short supply; Regulatory Changes may affect ways products and services are produced and delivered, and Rapid speed of disruptive innovations may restrict an organization’s ability to compete, formed the top 3 risks in 2030 among global organizations.
A total of 1,081 global respondents participated in the survey of which 422 respondents (39%) were from North America and 659 respondents (61%) from outside the region. Among the Indian companies surveyed, 34 % of Indian participants had less than $100 million in revenue. 39% of the participants had revenue between $100 million to $1 billion. 19% between $1-10 billion, 8% with $10 billion or more in revenue.
Top 10 Risks in the India region in 2021
| Risk Rank | Risk | Risk Category |
| 1. | Market conditions imposed by and in response to COVID-19, including shifts in consumer behavior to digital channels, may continue to impact customer demand for our core products and services | Strategic |
| 2. | Government policies surrounding public health practices, social distancing, return-to-work, crowd limits, and other pandemic-related regulations and protocols may significantly impact the performance of our business | Macroeconomic |
| 3. | The adoption of digital technologies (e.g., artificial intelligence, robotics, natural language processing, visual recognition software) in the marketplace and in our organization may require new skills that either are in short supply in the market for talent or require significant efforts to upskill and reskill existing employees | Macroeconomic |
| 4. | Sustaining customer loyalty and retention may become increasingly difficult due to evolving customer preferences and/or demographic shifts in our existing customer base | Strategic |
| 5. | Resistance to change in our culture may restrict our organization from making necessary adjustments to the business model and core operations | Operational |
| 6. | Ongoing demands on or expectations for a significant portion of our workforce to “work remotely” or increased expectations for a transformed, enhanced collaborative physical work environment may negatively impact the effectiveness and efficiency of how we operate our business | Operational |
| 7. | Inability to utilize data analytics and “big data” to achieve market intelligence and increase productivity and efficiency may significantly affect our management of core operations and strategic plans | Operational |
| 8. | 8. Economic conditions in markets we currently serve, particularly related to unemployment and government stimulus, may significantly restrict growth opportunities for our organization | Macroeconomic |
| 9. | Rapid speed of disruptive innovations enabled by new and emerging technologies (e.g., artificial intelligence, robotics, machine learning, hyper-scalable platforms, increasing bandwidth, faster data transmission) and/or other market forces may outpace our organization’s ability to compete and/or manage the risk appropriately, without making significant changes to our business model | Strategic |
| 10 | 10. Our organization may not be able to adapt its business model to embrace the evolving “new normal” imposed on our business by the current pandemic and emerging social change | Strategic |
Top 10 Risks in the India region in 2030
| Risk Rank | Risk | Risk Category |
| 1. | Resistance to change in our culture may restrict our organization from making necessary adjustments to the business model and core operations | Operational |
| 2. | Inability to utilize data analytics and “big data” to achieve market intelligence and increase productivity and efficiency may significantly affect our management of core operations and strategic plans | Operational |
| 3. | Sustaining customer loyalty and retention may be increasingly difficult due to evolving customer preferences and/or demographic shifts in our existing customer base Strategic | Strategic |
| 4. | Rapid speed of disruptive innovations enabled by new and emerging technologies (e.g., artificial intelligence, robotics, machine learning, hyper-scalable platforms, increasing bandwidth, faster data transmission) and/or other market forces may outpace our organization’s ability to compete and/or manage the risk appropriately, without making significant changes to our business model | Strategic |
| 5. | 5. Substitute products and services may arise that affect the viability of our current business model and planned strategic initiatives | Strategic |
| 6. | 6. Third-party risks arising from our reliance on outsourcing and strategic sourcing arrangements, IT vendor contracts, and other partnerships/joint ventures to achieve operational goals may prevent us from meeting organizational targets or impact our brand image | Operational |
| 7. | The adoption of digital technologies (e.g., artificial intelligence, robotics, natural language processing, visual recognition software) in the marketplace and in our organization may require new skills that are either in short supply in the market for talent or require significant efforts to upskill and reskill existing employees | Macroeconomic |
| 8. | 8. Market conditions imposed by and in response to COVID-19, including shifts in consumer behavior to digital channels, may continue to impact customer demand for our core products and services | Strategic |
| 9. | 9. Ensuring privacy/identity management and information security/system protection may require significant resources for us | Operational |
| 10. | Our existing operations, legacy IT infrastructure, lack of digital IQ in the workforce and insufficient embrace of digital thinking and capabilities may not meet performance expectations related to quality, time to market, cost and innovation as well as our competitors, especially new competitors that are “born digital” with a hyper-scalable business model and low-cost base for their operations, or established competitors with superior operations | Operational |
