Strategic Thought

RM in your Industry >

 Transport

Active Risk Manager is ideally suited to the requirements of the Transport industry.

Railway, airline and logistic companies need to manage and share risks across large operations (i.e. maintenance of the railway infrastructure or managing risks over set time frames).

In support of a changing culture, where contractors and consortium parties are required to communicate risk, Active Risk Manager allows coordinated management of all risk types (e.g. operational, project, financial, health and safety, reputational and environmental).

Active Risk Manger assists in developing an open and risk-aware culture throughout a company by providing a framework for all individuals to identify, assess, manage and share risks at their own level in a structured manner.

Key benefits that ARM can deliver in the Transport sector include:

Improving Accountability, Traceability, and Escalation Processes:

Need: There is a requirement to increase accountability and traceability on identifying, assessing and managing risks and opportunities to ensure that the decision makers at each level (Project - Program - Asset - Investment Team - Board) obtain greater quality of information.

Value: This results in reduced time and effort spent on supporting a manual process and improved decision making by providing more accurate data proactively and more quickly to the right people.

Capability: ARM delivers the above through its automated roll-up capability using Risk Types and the Alert Mechanism to support the workflow and approval process.

Return: Costs can be reduced through time savings reducing data manipulation to consolidate 5 reporting levels and ensure that decisions are based off data that is hours old rather than days or months old, thereby preventing risk impacts from occurring and objectives not being met.

Increase level of Governance and Risk Maturity and reduce inconsistencies:

Need: Companies like Network Rail use business and operational excellence models e.g. the CMI and OMI models which include a risk maturity assessment questionnaire. The key is to reduce the areas scoring below a target maturity level (1-5) and look to increase to higher levels subject to the value and cost of doing so.

Value:    Achieving these reductions and risk maturity improvements will reduce risk impacts, improve the level of confidence with external bodies, and prove advancement of business excellence and risk maturity by using ARM.

Capability: You can assess whether ARM can help increase maturity levels through the linkage of ARM capability to maturity levels, and automatically monitor them via the ARM audit trail.

Return: Increasing your risk maturity will improve your current to target risk impact reduction both bu cost and time. By showing increased levels of both governance and maturity you will be able secure increased confidence and potentially funding.

To improve allocation of contingency:

Need:    Ensuring that the right level of contingency is used to manage risk is almost as important as ensuring that where risks have impacted, contingency funds are reallocated quicker and more appropriately.

Value: By ensuring that contingency funds are not misspent and misplaced, companies are able to release provision funds quicker and thereby manage risks that need managing more efficiently. You can also gain greater value from more efficient supplies of funds and increase the likelihood of higher levels of contingency allocation by proving its good use in reducing risk impacts and providing ROI.

Capability: Interface contingency values from financial budget systems into ARM. This will enable companies to run the provision/contingency analysis functionality within ARM to determine correct provision.

Return:    Increase available contingency funds year on year.

Better use of Audit Reports:

Need:    The Executive and Management functions of a business require reports that provide metrics on whether a risk has a plan or a control, when it was last updated or reviewed, and what comments were made during that review for instance.

Value: Having a fuller view enables greater focus, support and audit of badly performing areas, reducing risk exposure and increasing risk maturity.

Capability:    ARM Dynamic Reports using Microsoft Reporting Services enables simpler, more efficient reporting.

Return:    Improved reports will reduce the risk of audit failure and improve reporting and audit of asset assessments.