A Systems Framework for Strategic Approach to Risk in E-Business

The fast pace of advancement of the electronic communications post war has transformed many traditional aspects of social and technological life from the ubiquitous access to global information to personal mobile contact with friends and family. In the commercial sector, the electronic commerce or electronic business encompass any form of commercial transaction using Electronic Data Interchange (EDI), Electronic Funds Transfer (EFT) or other technologies to facilitate such exchange. Having its roots in late seventies, and spurred by a host of emerging technologies since its introduction, e-commerce faces a myriad of challenges and risks due to its pervasive nature. Major developments in personal (credit cards, ATMs) and business (ERP) transactions during late seventies through to nineties have fuelled the rapid growth of the electronic business culminating in the current explosion of the world wide web based transactions. However, in view of their impersonal and pervasive nature, electronic transactions are generally susceptible to fraud and improper use. The management of Risks is regarded as a key element of good business approach and governance. Whilst many aspects of business activities entail degree of risk often left to the discretion of the enterprise, the safety, environmental and governance issues are increasingly scrutinized and regulated. This lecture introduces a generic risk based framework founded on a number of systematic and systemic principles & a review of best practice in systems safety, security and sustainability. A candidate framework comprising assessment and management dimensions each founded on 7 key principles is synthesised and proposed for adoption across all e-commerce applications from business to business (B2B) to business to consumer (B2C). The framework offers a strategic yet coherent and scalable approach to risk assessment and management which can be mapped to the specific requirements of an organization or industry sector as appropriate. The framework as a strategic paradigm encompasses many matters of concern to the current and future of e-Commerce including security, trust, commercial and reputational risks, governance transparency and statutory compliance. It provides a robust systems foundation for a holistic and comprehensive incorporation of policies, tools and practices for decision support, monitoring of performance, detecting trends and timely detection of mishaps and activation of remedial actions and loss control plans.