Management of Risk
Management of Risk is a management methodology that provides for managing uncertainty, integrating concepts of strategic planning, operations management, and internal control.
| Workflows and automating business processes are used as an effictive way to reduce business risks: 1. Workflows reduce human errors. 2. Workflows provides consistency and transparency of all risk assessments across the business. 3. Workflows improve risk responses with real time information. 4. Workflows reduce the cost of fines by using accurate business process information. 5. Workflows increase the effectiveness of management decision-making. |
A risk is defined as a possible event or circumstance that can have negative influences on an organisation.
Its
impact can be on the very existence, the resources (human and capital),
the products and services, or the customers of the organisation.
Risk Types
Hazard risk - Liability torts, Property damage, Natural catastrophe
Financial risk - Pricing risk, Asset risk, Currency risk, Liquidity risk
Operational risk - Customer satisfaction, Product failure, Integrity, Reputational risk
Strategic risks - Competition, Social trend, Capital availability
Managerment of Risk - Strategies:
Transferring the risk to another party.
Avoiding the risk
Reducing the negative effect of the risk
Accepting some or all of the consequences of a particular risk
Every probable risk should have a pre-formulated plan to deal with its possible consequences.
The Management of Risk process involves:
Establishing Context: This includes an understanding of the current conditions in which the organization operates on an internal, external and risk management context.
Identifying Risks: This includes the documentation of the material threats to the organization’s achievement of its objectives and the representation of areas to the organization may exploit for competitive advantage.
Analyzing/Quantifying Risks: This includes the calibration and, if possible, creation of probability distributions of outcomes for each material risk.
Integrating Risks: This includes the aggregation of all risk distributions, reflecting correlations and portfolio effects, and the formulation of the results in terms of impact on the organization’s key performance metrics.
Assessing/Prioritizing Risks: This includes the determination of the contribution of each risk to the aggregate risk profile, and appropriate prioritization.
Treating/Exploiting Risks: This includes the development of strategies for controlling and exploiting the various risks.
Monitoring and Reviewing: This includes the continual measurement and monitoring of the risk environment and the performance of the risk management strategies.
Sarbanes-Oxley Act requirements:
Section 404 of the Sarbanes-Oxley Act of 2002 required U.S. publicly-traded corporations to utilize a control framework in their internal control assessments. Many opted for the COSO Internal Control Framework, which includes a risk assessment element. In addition, new guidance issued by the Securities and Exchange Commission (SEC) and PCAOB in 2007 placed increasing scrutiny on top-down risk assessment and included a specific requirement to perform a fraud risk assessment. Fraud risk assessments typically involve identifying scenarios of potential (or experienced) fraud, related exposure to the organization, related controls, and any action taken as a result
About PNMsoft
PNMsoft was founded in 1996 by experts in human workflow processes and specializes in Business Process Management (BPM) and Workflow Automation solutions for business users. The company is a multi-national enterprise with its headquarters in the UK, the R&D centre in Israel and a global network of business partners and associated offices.
PNMsoft is noted for looking beyond pure software issues, towards concerns such as customization and fast ROI.
The
company has forged close and long-standing partner relationships,
particularly with Microsoft, which has appointed it a Microsoft Gold
Certified Partner. PNMsoft is also a member of the Microsoft Business
Process Alliance.
About SEQUENCE
SEQUENCE is an intuitive BPM software suite based on a graphical flowchart-based platform. It contains powerful options to give users great flexibility in taking an existing business process and converting it from a manual flow to an automated flow.
SEQUENCE provides a full end-to-end BPM solution that includes exploring, modeling, simulation, execution, integration, monitoring and optimization functions. The software interacts with people via Outlook, Windows SharePoint and in other ways. It also interfaces with best-of-breed 3rd party software.