I work for an organization whose main goal is to generate a
positive impact on customers’ business through intelligent business processes. Hence
all our sales efforts focus only on one aspect – what impact can we generate
for our customer? This in simple language means – how much money can I save for
my customer or how much positive influence can I have on their topline or bottom
line? We have seen the business paradigm change from being a labour arbitrage
based cost out game to one where high end consulting services lead to
innovative ideas that drive process efficiency and effectiveness.
While all this is well and good, where risk and control
specialists like me face a challenge is quite simple. Risk and controls specialists
have traditionally dealt only in two products:
·
Fear – fear of non-compliance and related fines,
penalties, loss of reputation and even the ocassional jail time
·
Assurance – assurance that our services will
prevent the above disasters from materializing
My experience suggests that we need to start looking at our
sales process differently. Assurance is no longer an adequate enough value
proposition. While assurance still is quite critical, the average corporate
customer has over the years realized that it is possible to get “Assurance+”
services. I call them assurance+ because as a principle any service offered by
a risk advisory practice is to help a customer identify and mitigate risks. We
are still in the business of assurance. But customers now demand that assurance
lead to greater process efficiency, assurance comes at a lower cost and assurance
comes with greater transparency and visibility. So assurance needs to be
accompanied by an efficiency and or a cost metric to make it a compelling value
proposition. Anyone who has been in the business long enough knows that none of
these “pluses” are radically new. Infact they have always been a natural
outcome of most assurance advisory projects. However where we see a change is
that the customer has become acutely aware of these byproducts and sees the
immense value in them. Hence they are no longer a significantly underplayed
offshoot – they are the front and centre objective of customer expectations.
The only area where fear still overrides all business sense
is when there is a new regulation (fear of the unknown) or when there is an enforcement
action (fear of the known). Any service which helps a company comply with a regulation which has the power to shut down or
at least significantly cripple businesses from an existence and / or revenue
perspective do not require any additional value than the fact that it can keep
you in business.
This change, like all others, can be viewed from a positive
as well as a negative perspective. If we think positively, what this has done
is allowed assurance professionals to claim credit and charge additionally for
all the hard $ valuea that their advisory services generate. So companies are
now experimenting with outcome based pricing, value based pricing even for risk
advisory services. This is quite a change from the project based or resource
based pricing that risk consulting projects are traditionally used to. The
risks in such a business model are great, but the rewards are greater with risk
consultants rising from being mere assurance providers to being trusted
business advisors. The flip side of the
equation is that quantification of our value proposition is quite a challenge.
Over the years, we may have helped many of our customers avoid potential
losses, identify potential leakages etc. But one of our handicaps is the basic
premise that audit and assurance is never 100%, it is always sample based.
Hence the only way for us to put a $ amount on value we have helped generate is
by extrapolation, which may not be the best or most prudent option. There is
also the argument that the more we chase “number targets”, the more we dilute
our main value i.e. assurance.
All said and done, the world of
risk advisory services is undergoing radical changes and once needs to be in
tune with changing customer expectations or risk getting left behind as the
ostrich with its head in the sand. Any risk advisor in that position wouldn’t be
too good a advisor now, would it? 
