The world has never been more connected than it is now. Economic life is shaped by different concepts for production and supply chains. These structures, however, are extremely sensitive. If one part of a complex process chain fails, bottlenecks can occur in production and supply chains, which can have far-reaching consequences. According to experts, the complexity of economic processes is once again increasing as a result of increasing digitalization, and it will continue to do so in the future. Thus, assessing the effects of a particular action will be difficult.
The importance of risk management will grow
The VUCA world is replacing the paradigm of growth and globalization. VUCA is an acronym that illustrates how the economic and working world is characterized by volatility, uncertainty, complexity, and ambiguity.
Climate change, Brexit, or the COVID-19 pandemic demonstrate the VUCA principle’s pervasiveness and can cause massive disruptions or even interruptions in operations. Risk management, especially business continuity management (BCM), enables companies to respond to crises more quickly and flexibly. Companies with a BCM often have significantly greater protection than those without one. Nevertheless, 9 out of 10 companies believe that they see further potential for improvement in terms of their risk and business continuity management.
Using contracts to present and analyze risk factors in a systematic manner
The legal department can make a crucial contribution to systematic risk management and BCM by recording all contracts and presenting the economic consequences of non-compliance with contracts. Comparing concluded contracts to production or supply chains reveals any gaps in coverage as well as essential areas of action.
There is a full article by Juergen Erbeldinger, CEO of ESCRIBA AG, in Deutscher AnwaltSpiegel as well as in English in GoingDigital. Technology-driven change in the legal scene is the subject of both publications, and they provide useful insight into topics such as digitalization, security on the web, and data protection.