Executive summary
In a rapidly evolving business landscape, the detection and management of invisible risks – those not immediately visible, often escape notice, or may be entirely unprecedented due to unknown factors – have become more critical than ever. Enterprise Risk Management (ERM) has evolved beyond addressing obvious threats to uncovering hidden vulnerabilities that can undermine an organisation’s stability.
This paper examines the role of technology in ERM, the future of risk management, and the importance of leadership in fostering a risk-aware culture. Through PwC Middle East’s collaboration with Giza Systems, we showcase how a proactive risk management approach enhances resilience and operational effectiveness.
The following key insights from the article highlight the benefits of integrating technology and leadership buy-in into ERM practices:
- Proactive risk management boosts resilience and efficiency.
- Strong leadership fosters a risk-aware culture.
- AI and data analytics enhance risk detection.
- Aligning ERM with strategy drives long-term growth.
Defining ERM: Embedding risk awareness for strategic resilience
Enterprise Risk Management (ERM) is a strategic framework that enables organisations to proactively identify, assess, prioritise, and respond to risks. Unlike traditional risk management, which typically addresses specific risk areas in silos, ERM integrates risk considerations into the strategic decision-making process at the highest levels of the organisation. This approach embeds risk awareness into the core of strategic planning and execution.
When applied effectively, ERM empowers businesses to meet critical objectives while managing daily operations with a clear understanding of their risk profile. A robust ERM framework provides a holistic view of potential threats, ensuring timely and appropriate responses. This not only enhances organisational resilience and operational effectiveness but also addresses stakeholder concerns, fostering trust and confidence in the organisation's risk management capabilities.
Understanding invisible risks
Expanding on the concept of invisible risks, these unseen dangers can cause significant disruptions if not proactively managed. An example is Giza Systems' experience with foreign currency shortages in Egypt, which led to operational disruptions. By recognising this risk, they diversified into the GCC region for more stable access to US dollars, highlighting the importance of planning for such hidden risks.
ERM: Its purpose, future and relation to leadership
A key goal of ERM is to enhance risk awareness by identifying both visible and invisible risks through tools like risk registers, workshops, and scenario analysis. Data analytics enables continuous monitoring, scenario simulation, and forecasting, strengthening proactive risk management.
Preparing for evolving challenges
Despite strong ERM systems, some risks remain unpredictable. Building resilience through robust processes and adaptability is crucial. The diagram illustrates an organisation's expanding risk radar—from recognising "known knowns" to identifying "known unknowns" and minimising "unknown unknowns" through proactive risk management. A dynamic risk framework helps reduce blind spots and strengthen resilience.
The role of technology
AI, machine learning, and data analytics enhance risk management by enabling real-time monitoring and deeper insights. These technologies improve risk identification, assessment, and mitigation in a rapidly evolving landscape.
The future of ERM
ERM is increasingly integrated with business strategy, ensuring risk assessments inform decision-making. AI and automation enhance risk identification, while human expertise remains essential. Strategic financial planning helps balance risk exposure with financial goals. ERM must also address emerging risks—geopolitical, economic, and environmental—with ESG integration becoming vital for resilience.
Strong leadership: The foundation of a risk-aware culture
Committed leadership fosters a risk-aware culture through training, transparency, and open communication. Strengthening ERM functions enhances operational support, ensuring organisations can navigate uncertainties and maintain long-term stability.
Case in focus: Giza Systems’ ERM evolution
Based in Egypt, Giza Systems is a leading digital transformation enabler in the Middle East and Africa. Following its acquisition by Saudi Arabia-based solutions by stc, the company faced new strategic and operational risks, requiring internal adjustments to align with diverse regional markets. Key acquisition-related risks included the need to recalibrate objectives to fit the new strategic direction.
To ensure sustainable growth, PwC’s Risk Services team collaborated with Giza Systems over four months to establish a comprehensive ERM framework. Led by Waleed Saleh, Chief Audit Executive, this initiative redefined roles, integrated risk management into operations, and strengthened internal audit functions. The engagement went beyond compliance, fostering a proactive risk-aware culture.
PwC Middle East engaged with Giza Systems' C-suite and key stakeholders, uncovering both expected and unforeseen risks—such as currency devaluations. This structured approach enhanced visibility, aligned risk management with post-acquisition goals, and positioned the company for long-term resilience and growth.
“While invisible risks may seem simple at first glance, they are significant in our evolving business world, presenting new challenges and opportunities. The collaboration with PwC Middle East has provided a structured approach to risk management, laying the foundation for a comprehensive ERM framework. By aligning ERM with strategic objectives, Giza Systems is now in a stronger position to navigate changes in its operating model and meet the evolving demands of regional markets.”
“Our team collaborated closely with Giza Systems’ leadership as we helped the organisation prepare to tackle both visible and hidden challenges. Our strategic partnership ensured Giza Systems was better prepared to navigate invisible risks following its acquisition.”
Looking ahead – Proactive risk management to navigate challenges
Enhancing the ability to identify invisible risks is key to a strong ERM framework. Organisations must expand their risk radar beyond visible threats to prepare for unforeseen challenges. Aligning risk detection with risk appetite enables a proactive approach to managing uncertainty.
Giza Systems’ success demonstrates the value of tackling hidden risks. With a clear ERM strategy and strong leadership commitment, the company improved its resilience, safeguarded operations, and positioned itself for future opportunities.
A proactive risk culture supports long-term sustainability, helping organisations navigate uncertainty while building stakeholder trust in a volatile business landscape.
