Risk of Complexity Primary Concern for Companies in the Digital Economy

Private US research university Massachusetts Institute of Technology (MIT) has found that the risk of increased complexity is a primary concern for companies operating in today’s digital economy.
According to a global risk survey, jointly conducted by the MIT Forum for Supply Chain Innovation and the Infosys Global Risk Advisory Group, more than 92% of participating companies ranked complexity as their number one risk concern.
The risk concerns that followed complexity were cybersecurity, business model disruption, globalization, more data, Internet of Things (IoT) and social media.
The survey included 70 participants, 47% of which were manufacturing companies, 37% in the financial services industry, and 16% retail. The respondents were sourced from Aisa, Europe and the US.
When asked if the respondents thought risk would increase over the next two years, 95% of them said yes, with cybersecurity and supply chain ranking at the top of these future concerns.
“Companies are at greater risk today due to increased complexity in systems, and I am concerned that more and more systems are chaotic but are being managed as if they are predictable and well understood,” stated John Williams, an MIT Professor.
As the nature of risk is changing, organizations are also altering their strategies to deal with the risks. Interestingly, 62% of companies stated they believe data science can significantly help in quantifying and controlling these risks.
“This is a huge concern in an economy that is increasingly complex and financially vulnerable to climate, supply chain, and cyber-risks. When companies experience a major disruption, they lose market share and, on average, take two years to recover fully from that disruption,” said David Simchi-Levi, founder of the Global Risk Advisory Group.