How to use operational risk
management tools to enhance your business performance?
Operational Risk Management ( ORM ) is the process of
identifying, evaluating, monitoring and controlling the risks posed by the
implementation of business activities. These risks may include human errors,
system failures, fraud, natural disasters, cybersecurity and more. Operational
risks can have a negative impact on the quality, performance and profit of your
business, as well as your reputation and customer satisfaction.
Evaluate the possibilities and effects of each risk and
prioritize them according to your risk appetite and tolerance
Implement appropriate measures to prevent, reduce or
transfer hazards that are unacceptable or exceed your risk capability
Monitor and measure the performance and effectiveness of your risk controls and report on your risk exposure and status
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Review and improve your risk management process and outcomes
on a regular basis
What can you use in some of the
operational risk management tools?
There are many operational risk management tools available
in the market that can help you in various aspects of your ORM process. The
most common thing is:
Risk Register is a document that lists all identified
operational hazards, their causes, outcomes, owners, controls, ratings and
measures. It acts as a central repository of information and communication tool
for all stakeholders involved in ORM. A risk register can help you track and
manage your operational risks throughout your life.
Root Cause Analysis:
Root Cause Analysis
is a technique that helps you identify the underlying factors or causes that
cause an operational risk event or problem. This includes asking a series of
questions “ why ” until you reach the main risk problem or source. Root Case
Analysis can help you prevent recurrence of similar events and improve your
process and control.
SWOT Analysis:
SWOT Analysis is a tool that helps you assess the strengths,
weaknesses, opportunities and risks related to your business work. This includes
a list of internal and external factors that can affect your performance
positively or negatively. SWOT analysis can help you identify your competitive
advantages and disadvantages, as well as potential areas of improvement or
growth.
Risk Assessment Template:
The Risk Assessment Template is a standard format or
structure that helps you make a permanent and comprehensive risk assessment for
your business tasks. This usually includes elements such as risk categories,
standards, scales, methods, sources, etc. The Risk Assessment Template can help
you save time and resources as well as ensure the quality and comparison of
your risk assessment.
Probability and effect matrix:
A possibility and impact matrix is a device that helps you
prioritize your operational risks based on their occurrence and impact
intensity Is. This includes planning your risks on the grid with two axes:
probability ( Minimum ) and effect ( Minimum ). Matrix can help you focus on
the most important threats that require immediate attention or action.
Risk Data Quality Assessment:
Risk Data Quality Assessment is a tool that gives you the
accuracy, complete, timely, timely, accuracy of your operational risk data ،
Helps to estimate compatibility and consistency. This includes the application
of various different standards and metrics to measure the quality of your data
sources, collection methods, analysis techniques, etc. Risk data quality
assessment can help you improve the reliability and authenticity of your risk
information and decisions.
Brainstorm:
Brainstorm is a technique that helps you create ideas or
solutions for your operational risk issues or challenges. This includes
bringing together a group of people with diverse perspectives and skills and
encouraging them to share their ideas freely and creatively. Brainstorms can
help you find different possibilities and alternatives for your ORM process.
How to choose the right operational
risk management tools for your business?
There is no solution that fits the same size for ORM tools.
The best tools in your business will depend on different factors such as:
Your operational risk profile, hunger and tolerance
Your regulatory requirements
Your available resources, budgets and times
Your preferences, expectations and feedback
To choose the right ORM tools for your business, you should:
Identify your key stakeholders and their roles and
responsibilities
Analyze space to determine ORM's own current and desired
condition
Research and compare different ORM tools and their features,
advantages and disadvantages
Choose appropriate ORM tools based on your standards and
preferences
Check and implement selected ORM tools and monitor their
performance and results
Review and update the ORM tools needed to adapt to changes
in your business environment
To conclude
Operational risk management tools are essential for any
business that wants to improve its operational performance and flexibility.
They can help you identify, evaluate, monitor and control your operational
risks in a systematic and efficient manner. By using the correct ORM tools for
your business, you can:
Increase your operational performance and productivity by
reducing errors, waste and re-work
Protect the value of your shareholders and the brand's
reputation by avoiding fines, litigation and loss of credibility
Promote a culture of risk awareness and accountability by
empowering your employees to identify and report risks
Innovate and develop by activating new products, services
and business models
If you need to help you select or implement the best ORM
tools for your business, you can contact us for free consultation. We are a
team of experienced ORM professionals who can help you with your ORM needs. We
can provide you with customized solutions that are in line with your business
goals, strategies and culture. Contact us today for more information.
