Risk leaders' agenda

Chief risk officers must act now turning risks into opportunities to reimagine and repurpose the organization for agility and long-term value.

Revolutionize risk with Trust by Design

Learn how to instill a risk optimization mindset and embed trust into services and products from the outset.

 

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Top issues facing risk leaders today

COVID-19, with all its indirect impacts, is the most immediate critical event organizations face today, but it is hardly the only one. Globalization (geopolitical power shifts and populism), environmental shifts (climate change and COVID-19), demographic shifts (the rise of Generation Z) and technological shifts (5G, quantum computing and precision sensors) are the primary forces creating new and constant waves of disruption — creating both opportunities and risks.

  • Reimagine enterprise resilience

    Going forward, enterprise resilience won’t be just a hygiene factor for organizations to survive in the foreseeable future. Trust will only be won by companies that have robust resilience built into their organization.

    It’s not only about getting through crises. A truly resilient organization also needs the insights and mechanisms to react to and ideally prevent potential (unknown) risks, or at least reduce their impact, and a willingness to view problems as a strategic opportunity to grow.

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  • Trusted transformation

    While building resilience and getting strategic opportunities in sight, organizations will repurpose with a new vision and focus on long-term value. Given the strategic imperative, this will require fundamental transformations for most organizations. In order to realize significant and complex business transformation, organizations will require comprehensive program risk management to attain the underlying strategic values and achieve trusted transformation.

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  • Progressive internal audit

    Trust is the foundation when working with your investors and shareholders, and also your business partners, customers and the authorities.

    Monitoring and evaluating market trends, using external data along with the internal data you produce in your daily operations, allows you to make informed predictions about the future. This is an approach that can be facilitated through (advanced) data analytics technology.

    These insights can help you prepare for any anticipated scenarios. They will enable you to address, at the right time, any potential risks that might arise. All of this means you will be able to keep true to your ”trust promise,” providing a strong degree of assurance.

    At the same time, these insights will enable you to verify your business strategy, make adjustments as needed, and focus on long-term value. By doing all of this, you will give others the confidence to trust that your organization is set up for success and will effectively manage the next wave of change. Progressive internal audit will happen through a complex mix of progressive and agile internal audit, digitally-enabled financial crime processes, and automated compliance processes, etc.

How to develop trust throughout your organization

Our trust journeys help clients create confidence and transparency within all levels of their organizations. We examine our clients’ critical relationships and develop pathways to trust that drive ongoing strategic returns and protection of critical programs.

How can you use obstacles to drive productivity?

Every business must deal with a unique combination of regulations, standards and governing bodies based on industry, location and products. A trusted organization must understand the requirements and the most efficient way to help clients comply with those requirements.

Trust by Design helps you build automated, consistent trust around regulatory requirements from strategy to execution. That frees up resources, so you can focus on your business strengths and take the smart risks that keep your company ahead of your competition.

How do you build trust during a period of uncertainty?

Organizational trust is woven through every layer of your company. It spans the multiple disciplines in which your business operates. It’s simultaneously data-aware, people-focused and forward-looking.

It is the foundation for trusted interactions with regulators, third parties, investors and customers. But to achieve organizational trust, companies will need to seize two critical opportunities.

Trust by Design helps you reimagine the internal audit (IA) function and embrace the future of work.

How do you ensure third parties put you first?

Global trade has deepened and complicated the relationships between companies and third parties. Across the supply chain, firms might work in tandem with contractors, joint ventures, service providers, brokers, agents, consultants and others. But while organizations can farm out responsibilities for numerous functions, they cannot outsource the accountability.

Building new relationships is critical to combating disruption and enabling protection of critical markets. Trust by Design helps you build the two-way trust necessary in this interconnected era, and trust must be embedded throughout the third-party relationship.

If investor trust is a delicate balance, can your business still act boldly?

In this transformative age, organizations are faced with new risks and opportunities. The need for the right data at just the right time to make the best decisions can be a challenge. The next generation of leaders expect to be informed not only by internal data sets, but by external indicators. Enterprise Risk management must take into account upside, outside and downside risks in the marketplace. A cohesive trust management program can help allow leaders to make better decisions leveraging new intelligence capabilities.

Trust by Design helps organizations thrive in this challenging landscape and recognize trust barriers within an organization. Our clients understand disruption and we assist in prioritizing their response to changes in the market landscape.

Does trust require proof of trustworthiness?

Each year, the world grows more heavily digitized, and in a hyperconnected digital era, society will be critically dependent on technology to function. For companies to succeed in this world, security is clearly imperative — yet it’s only the foundation upon which trust, the ultimate enabler, is built. Stability, security, resiliency and reliability are the core qualities you need from your technology as it becomes more vital to how you compete in the market and deliver on your objectives.

Trust is fast emerging as the key competitive differentiator, a reality that is not lost on organizations around the world. Leading with a Trust by Design mindset means putting trust at the core of every aspect of your business.

Is customer trust the missing piece of the puzzle? 

Customer needs and desires are constantly shifting. Digital technologies are obliterating industry barriers, intensifying competition and upending traditional business models. 

Organizations must align their values and vision with putting the customer at the heart of their strategies in order to maintain a strong reputation and brand in the market. To build customer centricity that yields sustainable, profitable growth, companies will want to remember that implementation is not a marathon. It is a series of sprints, with people, processes and technology working hand in hand. 

Minimizing risk throughout the business cycle is vital to creating more seamless experiences for the customer, with a brand they trust.

Case Study
The better the question. The better the answer. The better the world works.
Case Study

How to use real-time data to mine better insights

Learn how a leader in the food and beverage industry is harnessing the power of information to prepare for what comes next.

Case Study
The better the question. The better the answer. The better the world works.
Case Study

How do you turn real-time insights into long-term value?

Helping internal audit teams drive better results from Key Performance Indicators.

The Kraft Heinz Company is a global leader in the food and beverage industry, with sales of $25B in 2019. In the past, the organization’s internal audit focused on executing audits spanning operational, financial, and compliance risks. However, with the organization experiencing rapid change and a mandate for the internal audit team to act as trusted risk advisors, there was an opportunity to use data in a more in-depth and forward-thinking way – not only to continue providing assurances over key business processes but to enhance insights and risk coverage.

It’s standard practice for management teams to use key performance indicators (KPIs) to address business objectives. However, it can be difficult to analyze just how effective business processes are being executed in relation to company objectives. A new leading practice is to understand key risk indicators (KRIs) to ensure risks are adequately mitigated in order to achieve results for the business.

Kraft Heinz Global Internal Audit (GIA) engaged EY to transform their internal audit data risk analytics program in order to mine better risk insights from more real-time data. EY Risk Navigator is an SAP-powered platform built by EY. It combines SAP solutions and technology with EY intellectual property to help companies continuously monitor and manage risk.

Together we leveraged EY Risk Navigator as the basis for building risk analytics capabilities within Kraft Heinz. Now, the Kraft Heinz internal audit function can leverage real-time analytics to create a more efficient audit process, as well as delivering enhanced risk coverage and value.

“Our first goal was to create a more efficient and risk-based internal audit process by enabling the KH GIA team to have access to real-time risk analytics. But we also wanted to find ways for the organization to leverage these risk analytics to better mitigate risk and enhance standardization of business processes,” explains Mike Rambasek, Partner, Business Consulting, Ernst & Young LLP.

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Case Study
The better the question. The better the answer. The better the world works.
Case Study

Data analytics determine where process breakdowns occur

Using automation to analyze the whole business in real-time.

Rather than continue with manual data analytic procedures, Kraft Heinz internal audit engaged EY to implement a new tool to not only digitalize the existing data analytics onto a global platform but to lay the foundation for more advanced risk analytics, such as predictive abilities to be built in future phases.

Real-time risk analytics powered by transactional data

Previously, the efforts to produce the data risk analytics involved manual efforts (executed by a separate team for data extraction, data analysis, and data visualization) that needed to be performed during each internal audit review. In addition, risk analytics had to be re-run on an ad-hoc basis. This made for an inconsistent process. For example, one audit team might use certain risk indicators, but a different team would use other indicators for the same audit. The results would then be handed off to the auditors who leveraged them to identify outliers and samples to select.

By building Risk Navigator, powered by SAP, directly onto Kraft’s two major SAP ERP system instances, the EY and KH’s Internal Audit team was able to create and automate a more comprehensive and reliable analysis of risk using technology to pull incomplete datasets and analyze the entire business process real-time.

For example, raising purchase orders (POs) on a timely basis is key to ensuring an effective procurement process. Risk Navigator has a KRI that identifies POs which have been raised late. The Kraft Heinz analysis of this KRI identified approximately 5% of the POs were raised after receipt of goods or invoices in a particular business unit. Through this analysis, the Kraft Heinz Internal Audit team was able to review this disparity and help the team drive changes to the existing process. 

Fernando Garcia Bueno, Head of Internal Audit at Kraft Heinz explains: “Now we have risk analytics in real-time, these analytics can pull the latest 12 months’ data at any point in time. Now the internal audit team can review and monitor these key risk indicators as part of our risk assessment and audit planning process, which makes the audit more efficient and value-adding."

Now the internal audit team can review and monitor KRIs as part of our risk assessment and audit planning process, which makes the audit more efficient and value-adding.
Fernando Garcia Bueno
Head of Internal Audit at Kraft Heinz

Continuous monitoring to determine the root cause of underperformance

The risk analytics solution was developed with an enterprise-wide mindset so it would be beneficial not only for the KH GIA team but could also be accessed by process and risk owners to regularly monitor risks.

The solution included the implementation of 75 key risk indicators (KRIs) across core business processes and delivered an interactive visualization dashboard that enabled easy monitoring of those indicators. These indicators not only flag breakdowns in process, but also identify where breakdowns repeatedly occur.  The solution provides summarized KRIs, visualization of the results, plus drill-down capabilities that give the KH GIA team better understanding and provides the detailed information the business needs to more effectively monitor the processes.

“The implementation of the Risk Navigator analytics tool at Kraft Heinz is going to enhance our control environment as we operationalize continuous and proactive risk monitoring into the first and second line of defense,” says Vince Garlati, Global Corporate Controller, Kraft Heinz. “We are partnering with internal audit and cross-functional teams within the business to expand our ability to leverage Risk Navigator as it supports our ongoing evaluation of the internal control environment and responds with real-time insights and actions.”

The implementation of the Risk Navigator analytics tool at Kraft Heinz is going to enhance our control environment as we operationalize continuous and proactive risk monitoring.
Vince Garlati
Global Corporate Controller, Kraft Heinz

Smart cloud integration allows data insights to be used across the organization

Once Risk Navigator was in place, internal audit set out to train the management team on how to best incorporate the tool’s insights into their business strategy. Smart Data Integration (SDI) enables a seamless connection between back-end systems and the cloud. This means managers can access insights from the tool.

“The implementation of Risk Navigator at Kraft Heinz is a very good example of bringing to life our “digital decisioning” aspiration,” says Corrado Azzarita, Global CIO, Kraft Heinz. “I firmly believe that data-driven decision making can become a reality in several business domains, improving both efficiency and effectiveness. In this case Risk Navigator will help us mitigate risk and improve controls and processes. Risk Navigator effectively implements real-time monitoring of key risk indicators, which will allow process owners and risk owners to proactively look after the areas they are accountable for. ‘Continuous risk monitoring’ is now a reality and will be the best practice going forward.” 

And while the Risk Navigator solution’s initial focus is driving the transformation of Internal Audit, it also provides insights to the business and other compliance functions to transform their process for monitoring and testing risk and controls.

“Risk Navigator serves as a prime example of digital transformation in alignment with our aspiration of becoming a more data-driven, insights-led company,” says Dan Vierneisel, Head of Global Business Services, Kraft Heinz. “By reducing the time required to gather, assess and detect control weaknesses, we deliver capacity for humans to focus more attention on remediating process deficiencies in order to mitigate and prevent recurrence from repeating in the future. By expanding the sample size to include the entire population of data, we ensure a more robust and comprehensive control environment. By automating the process, we gain real-time visibility of potential risks before issues become material. EY Risk Navigator provides the answer to the question before an audit occurs, thereby eliminating surprises whilst ensuring a continuous control monitoring framework.”

Businessman analyzing statistics on a digital tablet
Case Study
The better the question. The better the answer. The better the world works.
Case Study

Transforming the role of internal audit for business

Predictive analytics creates a platform to drive transformative solutions across the whole business.

By creating a stronger system to monitor risks, EY and Kraft Heinz gave the business the ability to continually track results, harness insight, and make a change for the now, next, and beyond. Since the implementation of Risk Navigator, Kraft Heinz has also gained efficiencies in executing the internal audit work, while providing greater risk insights and value. In addition, the internal audit team now monitors the KRIs on a regular basis and provides feedback to process and risk owners on areas that require their attention.  

The implementation of Risk Navigator has allowed us to continue being effective and provide great visibility to key risk areas during the COVID-19 pandemic and the challenge of remote auditing.
Fernando Garcia Bueno
Head of Internal Audit at Kraft Heinz

“Our internal audit vision is to enhance risk management while being recognized as a trusted risk advisor. We believe the implementation of Risk Navigator combined with the risk analytics roadmap that we have ahead of us, will help us to deliver on our vision,” says Fernando Garcia Bueno. “We were thrilled by the innovative thinking and ideas that EY brought to the table. From the evaluation of the different risk analytics tools to the implementation of Risk Navigator, EY helped us conceptualize how internal audit could play a more important role in monitoring key business processes across the business. We are now piloting predictive risk analytics and developing an ambitious risk analytics roadmap for the next 3-5 years to fulfill our vision to enhance risk management at Kraft Heinz.”

"The implementation of Risk Navigator has allowed us to continue being effective and provide great visibility to key risk areas during the COVID-19 pandemic and the challenge of remote auditing," concludes Fernando Garcia Bueno.

The EY and Kraft Heinz Internal Audit team continue to challenge the status quo and this year has piloted predictive risk analytics in three areas. They are also exploring moving to other risk areas outside their SAP ERP system to expand the risk coverage. EY, an SAP Global Strategic Services Partner, is now helping Kraft Heinz implement solutions in many other parts of their business. This is just the beginning of an innovation journey that is bringing value and enhancing risk management at Kraft Heinz.

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