Top Risk Areas for Internal Audit: TMT

Technology, media, and telecommunications (TMT) industries encounter a complex array of risks that require the acute attention of internal audit teams. Operationally, maintaining platform reliability and managing internally developed software are crucial to service continuity and security. Strategically, using disruptive technologies such as AI and 5G while managing associated risks is essential, as is aligning product road maps with market demands. Financially, organizations must adapt to competitor strategies and maintain business model resilience. Internal audit efforts should include risk assessments, governance and compliance evaluations, and reviews of data analytics, supply chain resilience, and innovation investments.

Internal auditors help their organizations navigate these challenges by providing insights that bolster operational efficacy, strategic alignment, and financial fitness amid relentless technological advancement and competitive pressures.

Operational

Platform reliability is a critical focus for TMT companies that want to maintain customer trust and operational continuity. In 2025, the pursuit of robust, uninterrupted service presents significant challenges. Companies must manage complex technological integrations and anticipate and address potential disruptions that could affect their platforms.

Platform reliability

Platform reliability is paramount for maintaining customer trust and smooth operations. However, achieving and sustaining high levels of reliability comes with its own set of risks that organizations must navigate carefully.

One of the most significant risks is the potential for system downtime. Even brief periods of unavailability can lead to substantial financial losses, damage to brand reputation, and erosion of customer trust. The complexity of modern platforms, which often integrate multiple services and technologies, further exacerbates this risk. A single point of failure can cascade through interconnected systems and amplify the impact of any disruption.

Another critical risk is performance degradation. As user demands and data volumes grow, platforms must scale efficiently to maintain optimal performance. Failure to scale can result in slow response times, poor user experiences, and, ultimately, customer attrition. Additionally, security vulnerabilities pose a significant threat to platform reliability. Cyberattacks, data breaches, and other security incidents can compromise system integrity and lead to downtime and loss of sensitive information.

Organizations also must contend with the challenge of keeping their platforms current with the latest technological advancements and regulatory requirements, which can strain resources and introduce new risks if not managed effectively. By taking the following proactive steps, organizations can effectively mitigate the risks associated with platform reliability and help systems remain robust, secure, and capable of meeting the demands of a dynamic digital landscape.

Potential internal audit efforts for 2025:

• Conduct risk-based audit planning. Identify key areas of risk related to platform reliability, such as system architecture, data management, and security protocols. Prioritize these areas in the internal audit plan based on their potential impact on business operations.
• Evaluate redundancy and failover mechanisms. Assess the effectiveness of redundancy and failover mechanisms in place to ensure continual platform availability, including review of backup systems and disaster recovery plans.
• Review scalability and performance management. Examine the platform’s infrastructure to make sure it can scale efficiently to meet growing user demands. Evaluate performance monitoring tools and processes to identify potential bottlenecks and areas for improvement.
• Assess security controls. Conduct a thorough review of security measures, including threat detection and response capabilities, access controls, and data protection protocols. Confirm that security audits are performed regularly and that vulnerabilities are promptly addressed.
• Implement continuous monitoring and proactive maintenance. Evaluate the use of real-time monitoring tools and assess whether they are appropriately configured and integrated into the IT infrastructure. Review processes for proactive maintenance, including regular updates and patches, to verify that they are comprehensive and consistently executed. Monitoring activities should align with factors such as revenue loss, customer churn, and brand damage.
• Provide recommendations for improvement. Provide actionable recommendations to enhance platform reliability, including strengthening controls, updating policies, or investing in new technologies.

Internally developed software

While internally developed software offers significant advantages in terms of customization and alignment with business needs, it also carries risks. One of the primary risks is the potential for resource constraints. Developing software in-house requires a substantial investment in skilled personnel, time, and financial resources.  

Without proper planning and management, projects can easily overrun budgets and timelines and result in delays and increased costs. Additionally, reliance on internal teams means that any turnover or loss of personnel can disrupt development efforts and affect the continuity and quality of the software. The original developers might have long-term knowledge of code and system functionality that cannot be easily replaced. To avoid the risk of internal teams missing critical flaws because they are too close to the work, an external security audit is often needed to provide an unbiased check on software vulnerabilities.

Another critical risk is the potential for security vulnerabilities. Internally developed software might not always undergo the same rigorous testing and validation processes as commercial solutions, which can increase the likelihood of undetected flaws and weaknesses. These vulnerabilities can be exploited by malicious actors and lead to data breaches, system outages, and reputational damage.

Furthermore, internally developed software can quickly become obsolete if not continually maintained and updated, which could result in compatibility issues, reduced performance, and an inability to take full advantage of new technologies and innovations.

Lastly, customizing internally developed software too specifically runs the risk of increasing complexity, reducing flexibility, and making it more difficult to scale. By proactively addressing these risks, organizations can maximize the benefits of internally developed software while minimizing potential pitfalls.

Potential internal audit efforts for 2025:

• Conduct a comprehensive risk assessment. Begin by evaluating the organization’s internally developed software projects to identify potential challenges and vulnerabilities. This assessment should prioritize risks based on their potential impact on the organization and guide subsequent audit activities.
• Review resource allocation practices. Assess the adequacy of resource allocation, including personnel, time, and budget, for software development and maintenance. Make sure that projects are sufficiently supported to prevent overruns and delays.
• Evaluate testing and validation processes. Examine testing and validation processes to confirm they effectively identify and address security vulnerabilities and performance issues. Verify that these processes are consistently applied across all internally developed software.
• Assess continuity and knowledge retention plans. Review continuity plans to address potential disruptions caused by personnel turnover or other unforeseen events. Confirm that critical processes are documented and that cross-training is in place to maintain software continuity.
• Analyze update and maintenance procedures. Evaluate the procedures for regular updates and maintenance to verify that software is current, secure, and compatible with evolving technologies and business needs.
• Evaluate technical debt tracking and management. Assess efforts to confirm that technical debt (the suboptimal decisions made in the coding process to expedite the delivery) is monitored and resolved to prevent roadblocks to innovation.

Strategic

TMT industries stand at the forefront of transformative innovation. Advancements in AI, blockchain, 5G connectivity, and cloud computing are revolutionizing how businesses operate and redefining market landscapes.

While these technologies support growth and enable new opportunities, they also pose significant strategic challenges and risks. Effective management of these innovations is essential for maintaining a competitive edge and safeguarding against potential disruptions.

Disruptive technologies

The following advancements offer opportunities and risks by disrupting markets, making existing products or services obsolete, and creating new market leaders.

• AI enhances decision-making, customer experiences, and operational efficiencies.
• Blockchain provides transparent and secure transaction mechanisms, particularly in finance and media rights management.
• 5G connectivity enables faster data transmission, supports the growth of internet of things devices, and affects telecommunications and media delivery.
• Cloud computing transforms how data is stored and accessed and facilitates scalable solutions for businesses.

While these technologies support growth and innovation, they also introduce complexities and risks, including cybersecurity threats, regulatory compliance issues, and operational disruptions. In this changing environment, the internal audit function is essential for recognizing and reducing risks linked to disruptive technologies.

Potential internal audit efforts for 2025:

• Conduct a risk assessment. Perform a thorough evaluation of the risks associated with emerging technologies. Assess their potential impact on business objectives and identify and prioritize areas of vulnerability based on risk exposure.
• Enhance framework development. Develop comprehensive frameworks and controls to address identified risks. Establish policies for data security, compliance, and technology governance.
• Set up continuous monitoring. Implement real-time monitoring systems. Make sure these systems can detect anomalies and maintain compliance with regulatory requirements.
• Collaborate with IT and business units. Work closely with IT and operational teams to integrate risk management practices into technology initiatives from the outset. Ensure alignment and cooperation between departments.
• Audit new technologies. As the organization integrates new technologies, conduct routine audits to evaluate the success of these implementations. Confirm they align with business goals and adhere to regulatory standards. Furthermore, be mindful of the risk of obsolescence. When the organization invests in new tools, internal audit should collaborate closely with management to regularly reassess the ongoing relevance of the technology in use. Management should develop a strategy for phasing out or upgrading technologies before they become liabilities. Internal audit can play a critical role by providing an independent assessment of these processes.

Product road map

In today’s fast-paced market, the ability to effectively manage a product road map is crucial for maintaining a competitive edge. A well-defined product road map serves as a strategic guide, outlines the vision and direction, and sets priorities for product development. Not timely and accurately prioritizing, budgeting, planning, and integrating product development can have significant repercussions.

When a road map is not aligned with market demands or is not regularly updated, customers’ expectations might not be met, and they might become dissatisfied. Moreover, the misallocation of resources and pressure to meet unrealistic timelines can result in employee burnout. When competitors are constantly innovating, failing to execute a road map quickly can allow rivals to catch up or even surpass the organization and ultimately threaten its market position.

To mitigate these risks, TMT companies must adopt a proactive approach to product road map management, which involves establishing a dynamic process for regularly reviewing and updating the road map to reflect changes in market conditions, customer feedback, and technological advancements. Cross-functional collaboration is essential, and it helps make sure that all stakeholders – including product managers, developers, marketers, and sales teams – are aligned and working toward common goals.

Additionally, data analytics can provide valuable insights into customer needs and market trends, which enables more informed decision-making. By fostering a culture of agility and continual improvement, organizations can enhance their ability to deliver products that meet customer expectations and maintain a competitive advantage.

Potential internal audit efforts for 2025:

• Conduct a road map audit. Evaluate the current product road map to identify areas where prioritization, budgeting, and planning might be lacking. This process can help organizations identify gaps and areas for improvement.
• Implement regular review cycles. Establish a schedule for regular road map reviews and updates. Confirm that the road map remains aligned with market demands and organizational goals.
• Enhance cross-functional collaboration. Foster communication and collaboration across departments so that all stakeholders are aligned and contributing to the road map’s success.
• Identify roadblocks. Identify where internal friction is slowing down product delivery and provide suggestions for clearing these roadblocks.
• Use data analytics. Use data analytics tools to gain insights into customer behavior and market trends and to inform more strategic decision-making.
• Promote a culture of agility. Encourage a mindset of flexibility and adaptability within the organization to help teams respond swiftly to changes in the market.
• Monitor competitor activity. Keep a close watch on competitors’ product developments and market strategies to help the organization remain competitive.

Financial

As TMT industries face the challenges of 2025, internal audit teams must address financial and operational risks stemming from the rapidly evolving competitive landscape. Businesses are compelled to adapt their strategies and business models in response to innovative competitor tactics. These pressures necessitate a strategic approach to maintain competitiveness while ensuring operational integrity and efficiency.

Competitor strategies forcing business model change

In today’s dynamic business landscape, organizations must remain abreast of their competitors’ strategies. The risk of competitor strategies forcing a business model change is a significant concern for many companies.

As competitors innovate and adapt to market demands, they might introduce new products, services, or operational efficiencies that challenge the status quo. This innovation can pressure other businesses to reevaluate and potentially alter their own business models to remain competitive. Such changes, while necessary, can be fraught with risks, including misalignment with core competencies, disruption of existing operations, and potential alienation of the current customer base. Moreover, the urgency to adapt can lead to hasty decisions that might not fully align with the organization’s long-term strategic goals.

To navigate these challenges, businesses must adopt a proactive approach to monitoring and responding to competitor strategies by keeping a close watch on industry trends and competitor activities and fostering a culture of innovation and agility.

By being proactive regarding competitors, companies can better anticipate shifts in the competitive landscape and make informed decisions about when and how to adapt their business models. Additionally, engaging in scenario planning and stress testing can help organizations prepare for potential disruptions and respond effectively when change is necessary.

Potential internal audit efforts for 2025:

• Conduct a competitive analysis review. Evaluate processes for monitoring competitor strategies. Identify adjacent industries to verify the organization is not caught off guard. Verify that effective mechanisms are in place for gathering and analyzing competitive intelligence.
• Assess business model resilience. Review the current business model to identify areas of vulnerability that could be affected by competitor strategies. Evaluate the organization’s ability to adapt and respond to changes in the competitive landscape.
• Evaluate strategic alignment. Verify that any potential business model changes align with the organization’s long-term strategic goals. Assess decision-making processes to verify that they are informed and deliberate.
• Review innovation and agility practices. Examine the organization’s culture and practices related to innovation and agility. Identify opportunities to enhance these areas to better respond to competitive pressures.
• Analyze scenario planning and stress testing. Evaluate the effectiveness of scenario planning and stress-testing exercises. Verify that these practices are used to prepare for potential disruptions and inform strategic decision-making.
• Monitor change management processes. Review change management processes to confirm that they are robust and capable of supporting business model changes. Identify any gaps that could hinder successful implementation.

Navigating a complex landscape

As organizations face the challenges of 2025, internal audit teams can play a pivotal role in supporting operational integrity, strategic alignment, and financial resilience. By focusing on maintaining platform reliability and effectively managing internally developed software, companies can safeguard service continuity and security.

Strategically, using disruptive technologies and aligning product road maps with market demands are essential actions for maintaining a competitive edge. Financially, adapting to competitor strategies and maintaining business model resilience are crucial for long-term success.

Through comprehensive risk assessments, governance evaluations, and reviews of data analytics, supply chain resilience, and innovation investments, internal audit efforts can equip organizations to better navigate the complexities of a rapidly evolving landscape and position them for sustained growth and success.