Managing Risk in the Enterprise
Risk is everywhere. It pervades every level of an organization whether it is a company or a government institution. It impacts normal “business as usual” operational activities as well as projects and programs that bring change. Therefore, risk should to be managed at different levels of the organization, including:
• Strategic / Corporate level
• Project Portfolio Level
• Program Level
• Project Level
• Department / Divisional Level
• Operational Level
Importantly, however, the risks faced by each level of the organization will necessarily be different. Therefore, separate risk registers should be maintained for these different levels, each containing risks that can be controlled at that level. For example, a project risk register should not consider exchange rate risk if it has no control over the corporate hedging policy!
Further organizations should consider the different types of risk to which they are exposed. Different risk types should be set out according to a common “risk language” for the organization and consideration should be given to the following types of risk:
Typical risk types may be:
• Strategic Risk
• Reputational Risk
• Operational Risk
• Legal Risk
• Regulatory Risk
• Credit Risk
• Market Risk
• Project Risk
• Program Risk
• Business Risk
However, organizations should not feel compelled to implement Enterprise Wide Risk Management from the outset as this may be a level of change that is too extensive to be supported by the corporate culture at one time.
Improving risk management processes in a single area (whether a particular project or functional department) can lead to huge pay-offs on its own. Therefore, many of our most successful clients have looked to implement our risk method in one area of the organization at a time. As soon as one project or functional department experiences reduced costs, an improvement in quality of output and an ability to implement business benefits on time, other organizational areas will soon take notice!
Our software and our approach is equally applicable to enterprise wide risk management as well as a small implementation within a single functional department or project, so why not contact us to see how our team can help you
“Employees now have an elevated awareness of risk management. The user base [for IRIS] is growing much faster than originally expected due to the intuitive nature of the software, indicating wide user acceptance. Having a mature, proven method to ensure low risk programs aids executive management in meeting program objectives and delivering products on time and on budget.”
Stein Cass, Ball Aerospace and Technology Corporation