1Risk Reasoning LtdRisk Management Made Easy

Mark Swabey & Stuart Gruszka

“If I were you, I wouldn’t start from here”

Getting Enterprise Risk Management into your organisation

2Risk Reasoning LtdRisk Management Made Easy

Limerick

Dublin

3Risk Reasoning LtdRisk Management Made Easy

The Typical Scenario

UK Combined CodeSarbanes-Oxley,

Turnbull,Basel 2

More Programme, Bid and project risk

assessments? How do I manage them all?

Next product NOW please.

Window of Opportunity…

Earlier completion date? Less testing, less

reliable, more comebacks later

If only they were in tune! Where are the priorities?

what is the best ROI?

4Risk Reasoning LtdRisk Management Made Easy

Enterprise Risk Management

Too much emphasis on financial institutions and jargon

ERM is relevant to our whole business

as long as we are all included

and we define it in our own terms

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The foundation stones

Management commitment

Involvement of key personnel

Empowerment

Training

Communication

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The foundation stones

Common framework

“We all agree to do this and do it this way”

Clear objective

Inclusiveness

A simple common process

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The foundation stones

Process

Quantify

Identify

Respond

Manage

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The foundation stones

Shared Vocabulary

Chance (Probability)

Impact

Money

Time

Other criteria

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RiskAid – Other Criteria

What is important to your organisation

Reputation

Quality

Environmental Impact

?

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Reporting up the ladder

Hierarchical risk assessments

Strategy

ProgrammeProject

Project

Operation

ProgrammeProject

Project

Operation

Operation

Operation

Operation

Operation

Operation

Strategy

ProgrammeProject

Project

ProgrammeProject

Project

Operation

Operation

Operation

Operation

Operation

Operation

Operation

Programme

Strategy

Project

Programme

Operation

Risk Management levels and relationships

Strategy

ProgrammeProject

Project

Operation

ProgrammeProject

Project

Operation

Operation

Operation

Operation

Operation

Operation

StrategyStrategy

ProgrammeProgrammeProjectProject

ProjectProject

OperationOperation

ProgrammeProgrammeProjectProject

ProjectProject

OperationOperation

OperationOperation

OperationOperation

OperationOperation

OperationOperation

OperationOperation

StrategyStrategy

ProgrammeProgrammeProjectProject

ProjectProject

ProgrammeProgrammeProjectProject

ProjectProject

OperationOperation

OperationOperation

OperationOperation

OperationOperation

OperationOperation

OperationOperation

OperationOperation

ProgrammeProgramme

StrategyStrategy

ProjectProject

ProgrammeProgramme

OperationOperation

Risk Management levels and relationships

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Reporting up the ladder

Including subsidiary assessments

Budgets and Plans

Consequential impact

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Budgets and Consequential Impact

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Uncertainty

Hierarchy of Risk (from Risk: Improving government’s capability to handle risk and uncertainty, ref 254205/1102/D16 UK Govt. Strategy Unit, Nov 2002)

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Managing the assessments

Where do we keep the assessments?secure web or intranet server

How do we access them?via a browser

Who can see what?up to each assessment manager

Who did what, when and why?history and audit trail

What-if?scenarios

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Uncertainty in RiskAid

Uncertainty in estimates

Uncertainty in chance of risk occurring

Uncertainty of cost of action

Uncertainty in an action solving the risk

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See the effects of the action by switching it on and off

Is each action cost-effective?

Before proposed action

After proposed action

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Integrating assessments & plans

Integrate the risk management action plan with the business or project plan.

Allocate resources to the risk management action plan.

Deal with risk management tasks as part of the business or project.

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Instant Reports and Interactive DisplaysDisplays to help identify risks

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Instant Reports and Interactive DisplaysDisplays to show the priority risks

20Risk Reasoning LtdRisk Management Made Easy

Instant Reports and Interactive DisplaysDisplays to show the effects of actions

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Instant Reports and Interactive Displays

Displays to show the risk register, action progress, responsibilities

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The benefits of sharing

Devolving responsibility

Involvement by all

Encourages problem sharing and solving at each level

Clear responsibilities for each person

Better corporate understanding

Supported by common, integrated, collaborative tools

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Benefits of web/intranet based support

Controlled access

Controlled remote access

Collaborative environment

High availability

Safe storage

Minimal IT maintenance effort needed

Easy to use

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Conclusions

Common framework

Common vocabulary

Common process

Common, collaborative support environment

and we keep it simple and easy for all.

Enterprise Risk Management can be beneficial and show a positive return on investment if we have