Successes, Failures, Worries: Coupa Economist Ahmad Sadeddin on All Things Risk Related (Part 1)

Editor’s note: This is Part 1 in a two-part interview.

Are companies paying more attention to risk as they become more sophisticated, or are risks so numerous nowadays that risk management has become a bigger priority? If news headlines are any indication, we are all in need of a few contingency plans. And if you — as a business or as an individual — don’t even know where to start, well, you’re not alone. From hurricanes and earthquakes to Brexit and the upcoming General Data Protection Regulation (GDPR), what is one supposed to look at first?

Spend Matters founder Jason Busch and Coupa’s senior economist Ahmad Sadeddin are hosting a free webinar next Thursday, October 26, at 12 p.m. CDT, and they decided to tackle the broad, unwieldy topic of risk management through looking at three top risk areas: regulatory, environmental and economic. They will be sharing real-life anecdotes about buyers and suppliers who successfully handled crises through partnership and collaboration (though there will also be un-success stories, involving a good deal of panic).

I caught up with Ahmad to learn more about how companies are viewing risk, what they’re worried about and why he and Jason decided to hold this webinar now. 

Sydney Lazarus: Is risk becoming a bigger priority for companies?

Ahmad Sadeddin: In general, risk has been a high priority for a lot of people, especially after the 2008 financial crisis. Companies have received a lot of pressure, whether from regulators, boards [or] management. They started to look at vendor risk management a lot more seriously. But, what we've noticed in the last several years is [that] a lot of companies haven't actually solved the problems that they’re suffering from. They have complex but not very sophisticated systems, and it was really pieced together under a lot of pressure that they've been receiving to do so.

I think vendor risk has always been an issue that companies have faced, and they still haven't solved their problem. We're giving vendor risk management a home within Coupa and within Risk Aware to really not have it reside in Excel sheets. We're trying to de-silo data, and I think now is the right time with today’s technology to do so, especially with what Coupa offers.

The world is becoming very fast-paced and I don't think people can keep up anymore. If you’re doing all of this manually, how are you even going to keep up? When I look at the news, there's so much going on, that I don't even know what word to begin with to dissect it. I think that's the “why now.” The world is exponentially becoming more complex. There’s also a data analysis problem. The more data that we have, [the more we are] overwhelmed by all the data points and all the risks that are happening. How do you assess risk correctly?

SL: You and Jason will be talking about three top risk areas, which are regulatory, environmental and economic. How did you pick those three?

AS: When you look at what's in the news globally, those are the things that naturally come to mind, right? [We wanted to] keep the webinar relevant and very current. Those are the things that a lot of your readers and a lot of listeners want to hear about. We could talk about the nitty gritty details of algorithms and risk management and stuff like that, but we think it’s better to [talk about] real world events because those are the things that affect businesses.

SL: What are your clients most worried about risk-wise?

AS: Our clients are exposed to a lot of different risks from a lot of different causes. It's not the data points that are interesting to them. It’s how to handle the data point that they're really looking for guidance on. This is something that we're working on at Coupa with Risk Aware. How do we make risk actionable?

When [things go very wrong], people aren't going to run to their Excel spreadsheet to try to figure out that data point. They're going to their contingency plan, they're going to act. What we're trying to figure out with our customers is how to act, when to act and why to act. That bias for decision is a really huge component of risk management.

Risk management is a three-legged stool. One is the probability of something happening; the second is the severity of it. Without the first two you can't make a decision. That's what we're working to incorporate in Risk Aware, that very holistic picture of risk management. That's what I think a lot of our customers are looking to do. At the end of the day, you can analyze all the data in the world that you want, but if you don't have a proper vendor risk management contingency plan, it will fall very short, very quickly.

Want to ask Jason Busch and Ahmad Sadeddin your own questions on risk management? Make sure to register for this free webinar next Thursday at 12 p.m. CDT!

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