The 5 Game Changers in Risk Management
Opportunity and risk management is a very complex topic in every company. For example, early warning indicators may indicate the imminent scenario of a pandemic or a massive disruption of the value chain. But this will only work if all possibilities of risk management in the company are recognized and fully exhausted. The fact is that the traditional business management of risks often only uses a "rear view". On the one hand, risk management should draw clear conclusions from the past, on the other hand, the focus should be clearly directed towards the future. Our whitepaper contains the most important do's and don'ts from the world of risk management for you.
Excerpt
- Risks of Rearview Mirror Vision
Management boards do not like to deal with things that are already in the past and have caused business goals not to be met as planned. The problem with this: many common risk management methods are predominantly just that, namely past-oriented. This circumstance makes it difficult from the outset to...
- Overlooking the Big Picture
Over the past few years, rather rigid "risk accounting" approaches have been in practice for the most part. These traditionally include long and confusing Excel spreadsheets used to document risk scenarios and internal controls. However: It is difficult to systematically record threatening or even critical scenarios with such an overly bureaucratic form of documentation. Not only does the large number of different and ineffective approaches open the door to errors, but...
- Misunderstandings Caused by Incomprehensible Language
The common technical language in risk management is sometimes quite complicated and confusing: Value at Risk, Expected Shortfall, Probabilities, RORAC, RAROC, Risk Adjusted Capital, SCR, MCR, PSD2, RDP etc. At times, listening to it may even be perceived as tormenting. The frequent use of such abstract terms can quickly overwhelm the recipient and lead to a defensive attitude. If you express yourself in an overly complex manner, it will be challenging for you to...
- Organizational Silos Due to Inconsistent Methods & Reports
In a company, there are many organizational units that deal with risks. These include Controlling, Quality Management, IT Risk Management, Internal Auditing, Legal/ Compliance, and Finance. Each employee in these departments is a "little risk manager" in their own right. In practice, it can be observed that many of these little risk managers work exclusively with their own methods (FMEA, FTA, ETA, BIA, etc.) and often also create their own reports for Management. The result: a confusing conglomerate of various qualitative as well as quantitative methods and reports that can no longer be...
- Vulnerability Through Imprecise Solutions
Qualitative risk assessments are easy to carry out. However, due to their inaccuracy and subjective character, qualitative assessments also make the risk management industry more vulnerable to attack. This is because Management generally finds it difficult to make important decisions with a clear conscience based on a colorful risk map or a collection of qualitatively assessed risks. One reason for this is that such assessments are often based on ...
- Your Solution with BIC GRC
To use these five game changers in risk management effectively, it is essential to have a comprehensive GRC strategy and an efficient risk management tool. With BIC GRC, you get an automated, all-in-one GRC tool that lets you easily identify and analyze risks, manage internal tasks and controls, as well as treat and monitor risks in the best possible way. The software enables a future-oriented risk analysis by...
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