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Linking ERM to Business Performance
Business Performance objectives fall into four broad categories as follows:
Each category has its revenue/value creation and preservation dimension.
An easy way to approach the topic of revenue/value creation and preservation is to think in terms of a defined business objective and to ask:
Those things which are well understood are best assessed in SoluxR ERM.
Those things about which there is limited information and which are therefore not well understood (but which are nevertheless on the horizon as possible causes for concern) are best assessed in SoluxR Emerging Risks.
The purpose of SoluxR ERM is to provide guidance indicators of likely business performance on the road ahead. For example, where can the business safely speed up to exceed achievement of objectives, or where should it perhaps slow down, and double-check in case it hits a bump on the road ahead. In the case of ERM, consistently reliable good quality information is, assuming competent systems, always available.
An Uncertain World Summarised:
The combined effect of these and other global threats and emerging risk sources is:
1. Reducing the amount of time available to understand, let alone first identify risks, before they occur,
2. Increasing the interconnected and interdependent nature of systems and processes, particularly across supply chains and partner ecosystems, creating contagion effects where risk events in one area can connect with others or cause new risks to appear,
3. Making it harder to quantify risk impacts across financial and reputational ‘integrated capitals’; and others for example environmental, manufacturing and human capitals
Each threat and risk scenario needs to be understood and monitored. COVID-19 lessons have so far taught us that weaknesses include:
Using Agile Risk Management (ARM) practices SoluxR delivers results at scale, in less time, at less cost, more effectively and more reliably than other methods.
Immediate results begin to emerge when practical issues are addressed against internationally proven and accepted guidance assessing organisational risk, for example:
5. SWOT analysis: Organisational Strengths, Weaknesses, Opportunities and Threats,
6. Impacts across financial, human, reputational, manufacturing, natural and IP capitals
Powerful insights from such automated assessments conducted across large numbers of front-line decision makers have a hugely positive impact on the quality of thinking and decision making.
Dynamic links are distributed across the organisation, and its associated ecosystem of partners and suppliers to:
7. Initially map and scope the risk landscape. The more links that are shared across the front line decision-makers the more automated assessments are undertaken. And, the more complete the enterprise-wide picture of risks associated with the achievement of business objectives.
8. Thereafter decision-makers undertake more cadenced assessments which over time produce automated trend analysis leading to deeper insights and enhanced scenario development and stress testing,9.Consistently reliable enterprise-wide cadenced (front-line) assessments conducted over even 2-3 quarter’s results in a pooling of information on trends and insights leading to an organisational ability to anticipate and respond to changing conditions ahead of less adaptive competitors.