Yasmeen Muhtaseb, Partner, Advisory Services, Ernst & Young Jordan, on identifying vulnerabilities through regular reviews

Jordan's risk profile is remarkably consistent despite being situated in a dynamic political and economic environment. The kingdom remains a medium-sized economy in a regional market with high growth potential; its largest challenge stems from the persistent global economic slump. Political instability in key neighbouring markets has increased pressure on the economy, but investors who demonstrate patience and long-term thinking will be rewarded. After all, Jordan has proven its resilience many times in the past.

No market is protected from risk. Economic, political, environmental and security risks can appear anywhere. Our understanding of risk has evolved as we have tracked successful companies and observed leading practices. Risk cannot be comprehensively eliminated, but measures can be adopted to identify and prioritise risks. It is vital to undertake regular reviews of the risk environment to assess whether priorities are right or whether some risks have diminished, while others might be emerging. In the categories below, some of today's most prominent risks are highlighted. The overall picture is one of a global marketplace where success depends on a continual conversation about risk and a flexible approach to orienting mitigation strategies according to evidence and priorities. A myopic approach that sees risk in conventional terms has no place in today’s marketplace.

In the category of cost competitiveness, the most substantial risk is pricing pressure. For those that address this risk with knowledge and flexibility, the reward will be increased market penetration. Since volatility is now a fact of business life, and mature markets have almost become saturated, the key to growth is to identify and execute efficiency whether through cost-cutting or innovation. While many industries and services have cut costs as far as they are able, the pressure is on to realise growth through innovation. The strength of competition from online and traditional sources will be a major barrier, alongside rising costs of imports related to generally increased commodity prices. As is the case in all nations, Jordan's businesses are addressing cost competitiveness as a major part of their overall risk profile.

Stakeholder confidence is another category where risk is important. Governments in all markets can be expected to increase the regulatory and compliance burden for enterprise as they work to demonstrate to the public and lawmakers that the private sector does not go unchecked. Key in all of these risk areas is the supply chain, which depends upon open trade, regulatory consistency and cost efficiency from start to finish. The key to resilience in this area is transparent and open communication with shareholders, customers and employees. As part of its wider strategic growth strategy in the Gulf, Jordan's government remains committed to encouraging enterprises and not increasing regulatory action unduly.

Risk does not derive solely from external factors. A majority of companies now consider risk management in technology among the highest priorities. The widespread adoption of cloud, mobile and big data to develop, deliver and measure service has put most industries on a steep learning curve to understand vulnerabilities and develop mitigation strategies. Data protection is now among the most important functions not just for privacy protection, but also for performance measurement. Big data has introduced unprecedented levels of detail to help understand customers, identify patterns and point toward the most profitable avenues for innovation and growth. At the same time, the technological burden can be significant, not only to devise user-friendly and relevant programmes to capture data, but also to store and protect it from cyber crimes. One of the vital mitigation strategies will be to establish appropriate IT governance systems that serve to identify what data is valuable and where vulnerabilities exist, and additionally establish clear lines of responsibility for protection, maintenance and evaluation. The regular review of policies and procedures for the security of operations and data will be critical.

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Yasmeen Muhtaseb

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