When considering your company's current state of risk management, determine:

o How effective is your existing risk management process?

o How costly and efficient is it?

o How and where are complications surfacing--and how can they be addressed?

Despite increasing awareness around the need for more effective risk management, relatively few organizations have programs and technologies in place that can handle the dynamic risk environment facing organizations today. (For the first insurance companies Standard & Poor's assessed for ERM capabilities, only 13 percent were rated as having "strong" or "excellent" ERM programs. See page 31.)

This current state of affairs presents professionals everywhere with a great challenge and opportunity--getting more intelligent about risk and being more active in helping the organization attain a higher level of risk management.

Technology has a key role to play in this effort. Companies that exploit technology in organizationwide risk management efforts are uniquely positioned to earn substantial benefits, including:

o Enhancing their operational performance.

o Achieving greater insight into the correlation between risk practices and capital value.

o Gaining competitive advantage.

o Streamlining their regulatory compliance efforts.

Among the various aspects of risk intelligence, technology's role is particularly important. Risk-intelligent organizations look at technology in several ways:

o How technology can enable effective risk management.

o How risk management programs can better address technology risks.

o How technologies can be developed to enhance the strategic positioning of the company--as in the Internet technology that enabled the era of e-commerce.

Risk-intelligent organizations understand the value of these components and incorporate them into their risk strategy.

Here are three key considerations to becoming a more risk-intelligent executive and building additional risk intelligence into your organization:

o Consider technology risk:

Conduct a careful analysis of how the risk management process applies to your company's information technology department. This involves identifying, assessing, managing and reporting IT-specific risks including security, privacy and business continuity.

Think broadly about how to tap into the potential of technology to intelligently manage risk. This includes assigning the right people to manage risk and providing them with necessary training.

It also means advocating a risk management philosophy that includes intelligent risk-taking for competitive advantage as well as risk mitigation.

o Understand enterprise risk:

The applications of technology infrastructure across an entire enterprise can assist all parts of the business in identifying, assessing, managing and reporting risks.

As a risk-intelligent executive, learn to navigate through the enterprise to become a cross-functional leader who can discuss the role IT can play in helping the enterprise meet regulatory compliance requirements and mitigate other risks.

The risk-intelligent executive should use technology to help understand the variety of risks the business faces and be thoroughly equipped to offer advice on not only IT aspects of risk, but how risk relates to larger business strategies.

The goal should be to move the company from a fragmented business model to one that has an integrated structure embedded with risk management.

Core risk processes and enabling technologies that lend themselves to cross-enterprise integration should also be identified. Being more risk intelligent includes working to change the corporate risk management culture and making sure information is moving through the entire company--and that operation, compliance and risk functions are using a common language.

o View the big picture:

Bring it all together at the enterprise level to ensure that strategic risks are considered appropriately. Make sure the right people--at the top and throughout the organization--understand your enterprise's risks, their implications and the corresponding action plans.

Remember to carefully consider the strategic and operational issues facing your company.

Technology must be aligned with an organization's risk management processes in much the same way a company's overall IT architecture should be aligned with its business objectives.

In the long run, this could mean a tech-based tool could be used for every step of the risk management process--risk identification, assessment, measurement, control and treatment, reporting and monitoring for each of the key stakeholders.

Coaching your organization to achieve greater risk intelligence not only helps protect existing assets--IT or otherwise--but can also help generate future growth in achieving the organization's strategic objectives. Think of it as helping your organization practice smart defense and offense in a global playing field.