Operational Risk Management

Operational Risk Management

Importance

Inefficient business processes and supply chains will bleed away your investments. And when the processes break down they can waste catastrophic amounts of money and even your key customers.

Most organisations rely on having good people with a clear understanding of the business to ensure the smooth running of their processes. Problems occur when the processes or systems are new or complex, key members of the team leave the business or the specific competencies of the team are in doubt. In situations like this, the business can find itself lurching from one crisis to the next.

 

Traditional “cures”


Businesses often respond to this situation by instigating some form of “Operational Risk Management” process. These may be simple or sometimes quite complex but they all tend to suffer from the same fundamental problem – they are reactive rather than proactive – i.e. they respond to problems rather than identifying and managing risks. In addition, these “traditional” risk processes also tend to fail due to:

  • Generic risk statements that communicate very little
  • Over-analysis – using unsubstantiated quantified data
  • Under-analysis – using misleading HML type scales
  • Distractions due to Inappropriate prioritisation so you “can’t see the wood from the trees”
  • Inability to get anyone to actually do anything about the risks before they become issues


The De-RISK ABCD risk management process is a “true” risk management process. It works by identifying. analysing and managing the underlying assumptions in any business process. The benefits in doing this are:

  • Assumptions focus people into thinking ahead and therefore potential problems are anticipated rather than
    ignored
  • Assumptions are at the root cause of any risk and are therefore easier to manage than symptoms or the fall-out from an impacted problem
  • Uses meaningful analysis that provides true insight into how the team perceive the business processes
  • Provides clear prioritisation at all levels in the business and clear escalation routes
  • Ensures follow through on actions via simple but effective roles, governance structures and processes

Would you like to know more about risk management?

We are confident that just an initial call will provide enough information to create a new outlook regarding the impact of risk management on your business.