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Tag Archive for: Risks

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5 Basic Steps to Get Started in Enterprise Risk Management

If you are an innovative firm, then managing risk is an essential part of doing business. There are no standard enterprise risk management (ERM) plans that fit every technology firm. Each innovative firm is different and an Enterprise Risk Management program has to be designed to fit the specific needs on an individual business.

But there are five basic steps that a technology firm can take when starting their Enterprise Risk Management program. The ERM program should reflect the company’s culture and particular structure.

1. Personnel – The first step to developing an effective ERM plan is to involve key company personal. A team has to be assembled that will be responsible for overseeing the creation of the ERM plan as well as its implementation. Who are the key people in your organization that will be involved in establishing your enterprise risk management program?

2. Preparation – ERM preparation requires a realistic approach. By now you should have taken the basic steps to identify the critical risks that your organization faces. The next step will be to better determine your level of acceptable risk retention. Implementing an ERM program can help you broaden your scope of methods for managing those risks.

3. Documentation – The research involved with creating a company’s ERM plan needs to be thoroughly documented. This may involve interviewing key managers as well as conducting risk surveys and more. Sharing such documents among key personal can provide valuable ideas and provide resolutions for better managing those risks. The ERM plan should now be put together and reviewed. But keep in mind, an ERM program is always a working document. As your organization grows and changes, your ERM program will need to adjust.

4. Implementation – Once the ERM plan is created and passes the approval process, it is time to put it into place. All people involved with the ERM plan must be know their responsibilities. The plan needs to have event identification, risk impact response as well as defined actions that will be taken. An ERM plan without any implementation is not helpful in moving your organization to a higher level.

5. Monitor – Once an ERM plan has been created and put in place, it’s important it also be supervised. This can involve periodic audits, reviews, assessments and more. Effective supervision might also involve third parties to make certain the ERM plan is current and meeting all designated goals. Regular ERM monitoring will need to be done for the long term.

It’s important for companies in the technology and life sciences industries to manage all of their organizational risks. To do this properly may require getting assistance from industry experts. The members of TechAssure Association have the knowledge and experience necessary to provide expert advice for effective risk management. Contact us today to learn more.

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Life Science: Managing Risk throughout the Regulatory Process

Medical device product development is both a complex and highly difficult process. The developer must have a vision of the desired outcome before they conduct research, development and marketing of the product and begin regulatory compliance.

Because of their nature of use, regulation and approval of the product must be met before the product’s release. The FDA’s regulation process can include a number of production “kinks” at first. The public’s safety is the FDA’s number one concern and the efficacy of the device is the second. An approval process can include an evaluation of potential risk, manufacturing processes, potential harm the device may cause, pre-market evaluation and approval, and post market evaluation. The FDA will then classify the product as a Tier I, II, or III. The device then must be put through the IDE and IRB processes. The Investigation Device Exemption allows the device developer to test the unreleased product by using it as it has been intended. The data from this test will then reveal important information which will be evaluated by a review board before entering clinical trials.

After the review board sets up a comparable clinical testing environment, the trials can then begin. The clinical trial process is divided into two sets, pivotal and pilot. The pilot phase is less stringent, testing the basic safety of use of the product. The pilot phase sets the stage for the pivotal trials which use a larger group of testers with a more extensive type of safety testing and use testing.  After the product passes these regulatory phases mass development can begin.

Product launches are a key milestone and require a great deal of risk management strategy for success.  It is important to work with an insurance and risk management firm that is knowledgeable about the life sciences industry and understands how to make risk control an important component of your overall program.  Working with a TechAssure Association member can help your firm stay protected through the rigorous regulatory process of medical device development and a new device launch.  

Please contact us to learn more about developing a comprehensive insurance and risk management program for your product development and launches.

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New Product Launches: Are Today’s Tech Companies Exposed to Higher Risk?

Technology firms face a wide range of organizational risks. Managing unforeseen risks is a part of the industry.

Although having the right insurance is crucial to any business, it’s only one part of the puzzle. In order for technology companies to succeed, they must get the risks associated with new product launches right. Risk management takes a comprehensive look at risks, not just the insurance element, and formalizes a strategy and process to manage the exposures. It comes down to the economics of doing smart business.

Assumptions in product development are flawed. As each product is unique, a unique plan of development and launch must accompany it for success. A development and launch plan must be able to adapt to the ever-changing market. As “Big Data” grows and new developments in technology arise, members of the technology industry must take note of any risks that could keep their organization from meeting their future objectives.

Taking the proper measures during product development will enable a technology company to rise and manage the upside of risk. It is a fact that in today’s market, nine out of ten products will fail. Having a proper plan in place that is adaptable by the developers and board can help ensure success.

Here are a few tips that can help make your new product launches a success:

• Estimate the product’s holding cost and the transaction cost of batches produced. By optimizing the balance between these costs, a technology company can avoid the increased costs that come with producing work in batches that are too large. Maintaining the proper balance will boost efficiency and decrease the possibility of defects within the product. This can also help you manage your property and liability exposures.

• Losing opportunities due to sticking to a singular development plan can increase risk of product launch failure. Staying within your company’s comfort zone is not conducive to proper product launch and development. Because each product is intrinsically different, you should expect that its development would be different as well. A company needs to stay competitive by pushing the envelope within the bounds of a well-structured risk management plan. Of course, you should balance this with any increase of risks from product failures. 

• Rushing a product’s development or launch can be debilitating to a business. Controlling the rate at which a product is developed solely based on company productivity sets up a product and a company for failure. While it’s true that meeting deadlines is of paramount importance, releasing a rushed and diluted project will increases the product’s defect rate and liabilities to the company.

Risk assessment is a systematic process of evaluating the potential risks associated with a new product, activity or undertaking. It is important to determine the exposure and costs. Careful planning will enable a company to place priority on each type of risk involved before a new product launch.

Lastly, having a corporate insurance program in place that covers all elements of your new product launch is important. Insurance coverages important to new product launches could include: business interruption, warranty programs, adjustments in your general liability program and technology errors and omissions.

The members of TechAssure Association can put together a program that protects your investment and ensures that your new product launch is a success. Please contact us for more information.

 

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Top Questions about Supply Chain Risks

Technology companies have many questions about managing their supply chain risks. The most common questions come from all directions – legal, finance, HR and IT.

So as executives find themselves wanting more information about risks facing their supply chains, we decided to take a closer look at the supply chain risks.

Question: Is supply chain risk something we should be concerned about?

Answer: In today’s world, supply chains are more vulnerable than ever and the potential impact can come from many sources. Supply chains are complex and when you magnify the impact of disruption, the impact can be great to a company. Even the smallest, most isolated problems, can give a technology company headaches. Technology companies have an increased reliance on the supply chain and those risks need to be managed.

Question: Since we mostly use external suppliers, isn’t supply chain risk their responsibility?

Answer: For many technology firms, suppliers are one of the biggest sources of supply chain concerns. Having a diverse list of suppliers is difficult for some companies. Some suppliers rely on the same vendors for raw materials and this can create a pyramid effect on risks.

Question: Creating Supply Chain Resiliency is Ideal.

Answer: Creating supply chain resiliency is ideal. But many technology firms don’t know where to start. Consider the following:

  • Creation of methods that allow you to track and monitor supply chain events.
  • Identify any patterns that may emerge as you track and monitor them.
  • Find ways you can address workable solutions to your supply chain risks without increasing costs to your organization.
  • Establish a close relationship with all of your supply chain partners. Together you can begin to address the risks and avoid disruptions.
  • Outline a formal document that defines how you will monitor your supply chain partners and establish policies and procedures that will be a guide to addressing issues with they arise.

Technology companies should concentrate on the most critical areas that make them vulnerable. Because being a resilient technology company can make the difference between survival and failure.

For more information about supply chain risks for technology firms, please contact a TechAssure member.

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Technology Firms Tend to Develop Global Risk Exposures Early

Technology companies tend to go abroad quickly to grow revenues, secure market share, and gain access to knowledge workers. As a result, the borderless industry challenges companies to manage a global work force, currency risks, technology transfers and global supply chains, all while being able to respond to different relationships with government and regulators.

A TechAssure member can help you identify the exposures associated with global expansions. To learn more about the benefits of working with a TechAssure member, please give us a call at 512-377-9594, xt 700