It's all about the information - Definitions

Benefits of Risk Management

Achieving rewards that can be measured as a result of implementing a strong integrated risk management process within the organization.

• Assist clients in:
  • identifying where decreased costs and increased productivity can be realized
  • improving the ability to prevent, quickly detect, correct, and escalate critical risk issues
  • creating the ability to provide a comfort level to the organizations 'board' and other stakeholders that the full range of risks are understood and successfully managed
  • promoting and delivering continuous performance improvement

Data Collection

The process of preparing and collecting data that is both defined and accurate. Provides a baseline from which to measure and target what to improve.

• Assist clients in:
  • developing a data collection process which produces a competent measurement basis and represents a confident baseline of current performance
  • the capability to execute a data collection process that ensures data collected is defined, common, consistent, accurate, efficient, and results in quantifiable steps

Data Migration

The process of transferring data between storage types, formats, or computer systems.

• Assist clients in:
  • the capability to capture and transfer data between storage types, formats, or multiple computer systems as an automated migration process for:
    • data mapping
    • data extraction
    • data loading
    • data verification

Data Mining

The process of sorting through large amounts of data and selecting relevant information.

• Assist clients in:
  • the capability to sort through and extract large amounts of data sets and relevant information that is representative in prediction and pattern recognition for effective risk management

Enterprise Risk Management (ERM)

The method, framework, and processes to managing risks by taking an integrated view and holistic view of the various uncertainties involved across the organization. It is the process whereby an organization optimizes the manner in which it controls risks.

• Assist clients in:
  • developing an enterprise wide risk management process and framework for organizations wishing to improve their current risk management return on investment (ROI) within the organization
  • developing enterprise risk management practices within the organization, where continued improvement to the success of the organizations risk management process is realized

Gap Analysis

An assessment tool that enables a comparison of actual performance with potential performance, i.e., "the space between where we are and where we want to be"

• Assist clients in:
  • conducting an in-depth gap analysis that provides a detailed understanding of the organizations current level of risk management maturity, and identifies realistic targets for improvement through action plans for improving the organizations risk management capability to perform

Human Factors

The study of the way humans relate to the world around them, with the aim of optimizing human performance and reducing human error.

• Assist clients with a Dynamic Model of Human Causal Factor Interaction

Insurance

Is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium.

• Assist clients in:
  • Reviewing insurance as a risk transfer mechanism
  • Analyzing scope of insurance coverage in contracts
  • Determining best use of internal and external insurance resources
  • Developing benchmarks for performance monitoring
  • Meeting compliance, ethics and corporate governance policies and procedures
  • Maximizing company�s ability to control risks
  • Providing insurance law (regulation and legislation) expertise on international basis
  • Providing guidance on legislative and regulatory matters on patient protection, HMO liability, and mandated health benefits
  • Providing guidance on settlements with state insurance regulators on compliance issues

Liability

Anything that is a hindrance, or puts agencies, organizations, or individuals at a disadvantage.

• Assist clients in:
  • improving the ability to prevent, quickly detect, correct, and escalate critical threatening issues

Performance Measurement / Improvement

Measuring the output of a process or procedure, then applying modifications in order to improve the output, efficiency and effectiveness of the process or procedure.

• Assist clients in:
  • realizing improved process efficiency
  • automating the process of collecting, organizing, analyzing, and communicating risks in an efficient, cost-effective manner to the organization
  • producing a greater clarity of strategic imperatives including organizational readiness, strong organizational alignment, and targeted leadership development designed to support evolving risk management roles and responsibilities
• Conduct a performance measurement of clients risk management process by evaluating:
• integration of risk assessments into strategic and operating processes
  • risks being assessed in an explicit, open, and transparent manner
• improved risk identification:
  • risks identified more effectively thru risk mapping, communication, using a common risk language, and facilitating an open dialog
• implementation of more effective analytical and early warning techniques:
  • more systemic, quantitative analytical techniques
  • increased use of risk methodologies for anticipating risk and assessing their impact
• improved risk measures, metrics and monitoring:
  • transitioning from guessing through understanding to confidently knowing a risk
  • evolving from reacting to being prepared
  • monitoring key risks through management reporting
• reduced number, or avoidance of risk incidents:
  • demonstrated number of fewer risk incidents or loss events compared to the industry average
• reduced performance variability:
  • fewer surprises in reported results over time
• increased risk sensitivity and awareness:
  • focus on, and reinforcement of risk management goals, and objectives
• integrated key performance indicators (KPIs)
  • embedded within the risk reporting process
• increased regularity of risk register reviews within the organization

Risk

An event that could cause the possibility of suffering harm or loss

• Assist clients in:
  • improving the ability to prevent, quickly detect, correct, and escalate critical risks

Risk Analysis

A method to identify threats, vulnerabilities, and analyze them to determine the exposures, and highlight how the impact can be eliminated or reduced.

• Assist client's by providing expertise in advanced risk analysis techniques such as:
  • root cause analysis
  • trend analysis
  • scenario analysis
  • current, and target risk assessment
  • qualitative assessment
  • quantitative assessment

Risk Approaches

Selecting from a representation of different methods or methodologies in how best to manage risk.

• Assist our client's in:
  • developing the appropriate risk management approach that does not solely consider single events, but takes into account risk scenarios and the interaction of the organizations multiple risks
  • providing effective risk management processes that maximizes value in line with clients requirements
  • exploring client's needs in-depth by addressing inconsistencies and expressing these in a language that all parties, whether technically informed can understand
  • providing a basis for clear briefs which reflect client priorities and expectations
  • ensuring a cost-effective way of delivering the business benefits
  • supporting good design through improved communications, mutual learning and enhanced team working
  • providing a means for optimizing the balance between differing stakeholders' needs

Risk Assessment

Predicting how often hazards or specified events may occur (likelihood) and the magnitude of their consequences (severity).

• Assist our client's in:
  • the capability to execute risk assessments
  • the capability to execute a target risk assessment, i.e., the state achieved as a result of completed control or mitigating action
  • the capability to execute qualitative analysis for risk assessments utilizing subjective impact levels such as: High, Medium, Low, etc
  • the capability to execute quantitative analysis, for risk assessments utilizing specific numerical values, e.g., a cost impact of $10,000, and calculate the adverse impact of each risk's likelihood of occurrence
  • the capability to calculate risk quantification utilizing existing mathematical models and techniques such as Monte Carlo analysis, etc

Risk Attitude

Ones' positive or negative feelings or outlook towards risk and risk management.

• Assist our client's in promoting a positive attitude towards risk and risk management by:
  • defining the organizations risk appetite more clearly
  • embedding risk management processes and people more deeply into the lines of business
  • focusing more on upside risks and opportunities

Risk Benchmarking

A principle by which risk management can be measured and improved

• Assist our client's in:
  • providing a standard for comparison and an indicator of past successes
  • providing the capability to combine data from all participating sources and derive a set of measurable benchmarked values
  • providing a survey that captures where the organization currently is and establishing a starting point
  • providing the capability to compare operational performance from both within and across organizations, departments, divisions, or business units with others of the same entity
  • providing an analysis of client's results compared to others within its industry
  • providing the capability to measure improvement
  • providing the capability to display benchmarked values where users can view and download standard benchmarked information that provides consolidated results without highlighting any one organization
• Providing the capability to produce data benchmarking results from within a Risk Management Information System (RMIS) database infrastructure thru:
  • evaluation, comparison, and measurement of data reference points
  • evaluation, comparison, and measurement of key indicators
  • evaluation, comparison, and measurement of indices

Risk Capability

An organizations ability to perform risk management processes and procedures.

• Assist our client's in their capability to perform risk management by:
  • Identifying and implementing communication techniques that improve communicating key risks to senior management
  • identifying and managing new and emerging risks
  • identifying and recommending where regulatory compliance must be met
  • identifying and recommending where risks should be measured and monitored
  • instilling a culture of positive risk awareness throughout our client's organization

Risk Compliance

Demonstrating adherence to compliance standards and regulations through the utilizing of risk management processes.

• Assist our client's in:
  • implementing due diligence and meeting regulatory compliance, i.e., Sarbanes Oxley, Basel II, etc
  • providing guidance on regulatory issues specific to risk management

Risk Controls

Measurable actions that successfully reduce risks.

• Assist our client's in:
  • the capability to create, evaluate, update, track, and manage the effectiveness of control processes against existing control and fallback measures
  • providing intelligent monitoring and detection controls that contribute to client's understanding of its overall risk exposure

Risk Critical Success Factors

Identified factors or elements which are necessary for an organization to achieve its mission and ensuring success.

• Assist our client's in:
  • identifying significant risk factors with associated indicators that may change results
  • defining specific performance metrics which support our client's organizational goals and how they should be measured for performance expectations to be realized
  • identifying what must be managed in order for the predicted results to materialize

Risk Expertise

Demonstrating advanced risk management skills or knowledge derived from training or experience.

• Providing our clients with:
  • risk management subject matter expertise
  • a team of appropriate specialists for specific types of risk management support and consultation
  • other industry partners so that our clients requirements can be fully supported and their benefits maximized

Risk Exposure

The extent of risk faced by an organization that is expressed in terms of either the likelihood and impact of a loss.

• Assist our clients in:
  • the capability to identify and display risk exposure across the entire organization so that the levels of risk can be compared against any point in time and illustrated when risk exposure is minimized

Risk Identification

Identifying risks that can negatively impact the organization.

• Assist our clients in:
  • Risk identification by providing the capability to create, update, track, and manage all risk information associated with each risk

Risk Management

Risk management is the systematic process of managing uncertainty by identifying, assessing, controlling, and communicating risks across the organization.

• Assist our clients in value-added risk management services by:
  • developing a stronger position to deliver its business objectives and meet its corporate governance requirements
  • ensuring that staff is provided with the necessary support and training to meet the risk management needs of the organization
  • improving internal understanding of the purpose, principles and practice of risk management and the internal essential skills needed for all organizational risks to be managed successfully
  • developing a more effective, productive workforce of individuals that result in improving the efficiency of the organizations risk management process, and become a valued asset within the organization

Risk Management Information System

A computerized system that assists in consolidating risk data information and provides the analysis, tracking, management, and reporting capabilities to enable monitoring and controlling of all risks.

• Develop and implement real-time, web-based data collection and analysis systems that:
  • accumulates and captures client's data
  • produces standard measurement reports
  • provides advanced risk analysis capability
  • provides information on key cost drivers
  • incorporates causal human factors
  • Integrates and improves our client's risk profile information and incorporate risk analysis tools to give them a complete view of their exposure
  • provides a client's risk 'score'
  • provides a client's behavioral risk profile
  • provides risk maps and matrixes
  • provides alerts for client's to detect any unusual or suspicious behavior

Risk Maturity

An organizations risk management maturity level as a result of its culture, tolerance, experience, and current application of its risk management process compared against risk management maturity model best practices.

• Assist our client's in improving their level of risk management maturity by:
  • ensuring their risk appetite is clearly defined and drives decision-making cross-functionality
  • implementing risk and control assessments across the organization that share common risk definitions, frameworks, methodologies and risk rating scales
  • monitoring and testing activities which are formally defined, coordinated and leveraged cross-functionally within the organizations business units
  • confirming risk management processes and technologies are effectively and efficiently integrated across the organization
  • implementing an integrated governance, risk and compliance program
  • instilling a risk-aware culture within the organization
  • ensuring that senior management recognizes the most important elements of risk management are the attitudes, competencies and behavior of people within the organization
  • developing an understanding of an appropriate balance between risk and opportunity in the organizations business decision making process

Risk Register

A prioritized list of risks that can impact the organization.

• Provide our clients with:
  • the capability to create and display a detailed list of risks including:
    • inherent risk(s), residual risk(s)
  • the capability to display list of risks in a summary view
  • the capability to customize view of risk register by user, i.e., risks listed by priority, organizational business structure, etc
  • the capability to clearly identify where change in the organizations risk profile has occurred

Risk Return On Investment (ROI)

ROI is a performance measure used by organizations to determine and evaluate the effectiveness of an investment. To calculate ROI, the benefit of an investment is divided by the cost of the investment, and the results are expressed as a percentage or a ratio. The higher the ROI, the higher the confidence that the investment is worthwhile, successful and a benefit to the organization.

• Assist our clients in:
  • an illustrated ratio of savings compared to the cost of doing business that indicates the value of performing risk management to the organization
  • identifying improvements in revenue or development of new revenue opportunities
  • the capability to calculate roi on risk exposure before and after implementing mitigating actions and / or controls
  • the capability to calculate the roi on the expected cost of impact vs. the cost of mitigating actions and / or controls
  • the capability to display the roi in a single, clear, understandable view so that decisions can be based on the result(s)
  • the capability to calculate and compare:
    • the monetary amount of gain or loss
    • the ratio of monetary gain or loss
    • tthe amount of interest, profit / loss, gain / loss, or net income / loss
    • the estimated return on a future investment
  • identifying where more capital can be freed up for investment in the business
  • improving returns relative to the organizations risks taken
  • improving reputation with shareholders, employees, regulators, etc
  • improving reputation among customers

Risk Strategy

A long term plan of action designed to achieve a particular goal. Extensively premeditated, and often practically rehearsed, it�s also about implementing choices that can affect outcomes.

• Assist client's in developing the appropriate risk management strategies that address the full spectrum of risks, including industry-specific, compliance, competitive, environmental, security, privacy, business continuity, strategic, reporting, and operational that are the most beneficial for their organization

Risk Success Measures

Both financial and non-financial metrics used to help an organization define and measure progress towards organizational goals.

• Assist our client's in validating that their risk management processes are resulting in a return on investment thru some of the following success measurements indicators:
  • Significant reduction in fraud and waste
  • incremental insurance savings realized
  • reduced claims costs
  • projects delivered on time and on budget
  • significant reduced complaints
  • minimal staff turnover
  • risk register kept up to date and effectively communicated
  • increased percent of objectives achieved
  • increased funding approved
  • reduction in contingency costs

Root Cause Analysis

An effective problem solving method that identifies all known causal relationships between the root cause(s) and the defined problem.

• Assist our clients in:
  • the capability to determine and calculate root cause of critical risks including formulating an understanding of what drives each critical risk
  • the capability to identify any commonalities between multiple risks
  • the capability to compare data across an organizations business structure to easily identify similar, and / or recurring root cause trends, probabilities, and frequency

Scenario Analysis

A top-down, 'what if' analysis that measures the impact that a certain event (or combination of events) will have on the organization.

• Assist our client's in:
  • the capability to model "What If" scenarios, i.e., sensitivity analysis by identifying the critical factors in the model, recording the changing values and analyzing how those changes affect outcomes of real issues, combined with comparing alternative solutions

Scenario Planning

A strategic planning method that some organizations use to make flexible long-term plans.

• Assist our client's in:
  • providing the identification of potential scenarios, and a range of triggers are established, which alert our client's to situations requiring further assessment and response
  • answering questions such as: "What could disrupt our plans? And how vulnerable are we to it?"

Types of Risk

Description and representative of categories of risk.

• Assist our client's in understanding and how to manage the types of risk that exist such as:
  • physical property
  • loss of income
  • contingent expense
  • human resources
  • legal liability
  • commercial and legal relationships
  • economic circumstances
  • natural events
  • political circumstances
  • technology and technical issues
  • management activities and controls
  • individual activities