Innovation – But with Risk: The Strategic Role of IT in Business Risk Management

Soroori Sarabi, Atefeh; Zamani, Mahsa; Ranjbar, Shekufe; Rahmatian, Farhad

doi:10.22059/jcss.2023.101605

Innovation – But with Risk: The Strategic Role of IT in Business Risk Management

Document Type : Original article

Authors

¹ Department of Engineering, Istanbul Technical University, Istanbul, Turkey.

² Department of Media Media Management, Kish International Campus, University of Tehran, Kish, Iran.

³ Journalism, Media and Globalization, Aarhus University, Denmark Ludwig-Maximilians-Universität, München, Germany.

⁴ Department of Global Management, Thunderbird School of Global Management, Arizona, USA.

10.22059/jcss.2023.101605

Abstract

Information technology is a pivotal tool in mitigating diverse risks within business environments, ranging from operational inefficiencies to cybersecurity threats. By automating processes, enhancing decision-making through data analytics, and improving communication channels, IT enables businesses to proactively address vulnerabilities and seize market opportunities. However, the adoption of advanced IT systems is not without its challenges. Implementing new technologies can inadvertently introduce novel risks, such as cybersecurity vulnerabilities, data privacy concerns, and system integration failures. Moreover, a lack of strategic planning in IT adoption can lead to misaligned investments and operational disruptions, while lagging behind in IT modernization may result in missed opportunities and competitive disadvantages. This dual-edged nature of IT reveals the importance of a balanced approach to its integration. Businesses must carefully evaluate the potential benefits and risks of IT solutions, adopt comprehensive risk management frameworks, and prioritize continuous employee training to optimize the benefits of IT adoption while minimizing unintended consequences.

Keywords

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