Solutions - Risk Management

Risk Management
Senior executives are realizing that in addition to managing external risks, many of the major threats, opportunities and challenges facing them today come from the operational arena. In fact, a new trend is developing that positions operational risk management as a distinct internal function within an organization. Consistent with this trend is the emergence of a common definition of Operational Risk:

Simply stated, operational risks come into play when an organization’s people, processes and technology are not functioning as they should. There are a number of operational risks as well as opportunities that organizations must get their arms around to ensure the successful execution of their business strategy, reduce costs, increase revenues and maximize earnings. These include:

• Business practice and regulatory compliance – proper controls are in place
• Business process excellence – operational effectiveness and risk mitigation
• Mergers, acquisitions and outsourcing services – smooth process integration
• Major project and corporate initiatives – projects delivered on time, on budget, and meet expectations
• Business continuity – protecting corporate assets against major and minor threats

Effective management of these risks requires an inward focus on the organization’s business processes, how well they are understood, how well they work and how well they are documented. The good news is that by partnering with DEA, you will have access to our expertise in applying a proven methodology with an enterprise-wide view to gather process knowledge.

Integral to our approach is the:

1. Gathering and mapping of business processes to gain knowledge using a visual modeling tool
2. Adoption of a common “process” language across the enterprise to ensure consistency
3. Developing and documenting a business process architecture within a centralized repository
4. Collaborating and sharing process knowledge in a web-enabled environment

Once your company makes the decision to work with DEA in developing a plan to manage your operational risks, we take the lead in the effort to build business process knowledge throughout your organization. It is our belief that a process-based modeling approach to operational risk management not only improves the day-to-day management of risk but also provides a foundation from which more strategic initiatives can be launched. For example, one of our clients was able to minimize the effort required to become Sarbanes-Oxley compliant since they had already completed the following steps:

• Understanding, documenting and analyzing business processes
• Analyzing and identifying risks, inappropriate controls as well as business process improvement opportunities
• Designing, modifying and implementing new processes incorporating internal controls and steps to optimize efficiency and mitigate risks
• Establishing metrics to measure on-going process performance

Beyond the analysis of your business processes in terms of identifying risks and opportunities and implementing controls, DEA helps you to focus on the people and the technology or systems that are involved in each business process as illustrated in the annotated process map below.

Using this kind of repeatable approach, companies are able to better leverage their process knowledge, to implement effective business and technology solutions, and to make the best use of their resources. Even better, the approach ensures that this knowledge is available to be shared across the enterprise.