Strategic Thought

What is Enterprise Risk Management (ERM)?

ERM is the framework by which a business can organize all its risk management needs for the purpose of measuring, aggregating, and assessing this information on an enterprise basis. 

From Strategic Thought's perspective, the value obtained from approaching each risk vertical separately is limited. Once deployed in a silo, the information is difficult to extract and assess alongside other risk information. The real value is being able to assimilate and integrate the information from each risk vertical with the organization as a whole, assessing all risk information in a common and consistent way. This allows the business to identify inefficiencies through duplication, benefit from existing knowledge and controls, and assess the real aggregated risk exposure of the business to key events.

Enterprise Risk Management enables a company to answer questions such as:
“Am I over-controlled and what controls are delivering the greatest value?”
"If I wanted to reduce my insurance premiums how would I do this?”
“Why do most of our projects fail to deliver on time?”
“How do I find out if we are compliant with all European and Industry regulations and if not, what are we doing about it?”

Effective ERM requires a risk vision, framework, and taxonomy so that as each new risk vertical is added, the information and structures already in place can be re-used.

This reduces administration and increases the aggregated value of the information to the rest of the business.

For example, the identification of project based risks in one organization can:

• provide value to the Health & Safety managers in identifying specific H&S risks relating to these projects
• lead corporate risk managers to secure warehouses 24*7 to mitigate terrorism risks
• benefit asset managers in addressing the risk of plant or machinery theft
• enable key account managers to realize that the security firm being used is also a major customer with the opportunity for increased business.

Having a comprehensive risk management framework and solution in place, able to deal with any of these specialist needs when they do occur, offers significant advantages in reducing costs, increasing opportunities and delivering value. Active Risk Manager is designed to deliver such a solution, ready out of the box for companies to deploy from their first vertical risk need and beyond.