by Rick Nason, PhD, CFA
RSD Solutions Inc.
We all have seen high tech risk management systems (and processes). Every risk conference has software vendors all putting forth the latest and greatest in terms of systems that will put your firm in complete control. These systems are truly impressive in terms of their scope and their attention to the state of the art in risk management.
We also know firms that manage their risks through “low-tech”. Very simple systems that are perhaps captured solely on a sheet of paper, perhaps in an Excel template, or in the simplest cases perhaps in a senior executive's head (and with significant gut-feel).
Many firms have a hybrid form of risk management system. They have a high-tech system, but rely on the low-tech decisions of senior managers.
As Vicente puts forth in his book, perhaps it is time that we spent more time thinking about Human Tech risk management systems. That is, risk management systems and processes that use the best of technology and techniques, but also engage the people who have to implement them, and make decisions based on their output. These are the types of risk management systems that are not only practical, but also efficient and effective.
