Risk Management

Are we managing the risks of sustaining this performance?

The Risk Management decision area provides a consolidated view of several categories and hierarchies of risk, such as operational, credit, and market risk. In addition to these, organizations must monitor environmental and natural risks that impact disaster recovery and business continuity for better performance management.

Having a single integrated universe of identified risks that cuts across common organizational units, functions, and business processes enables more coordinated and cost-effective risk responses.

With the Risk Management decision area, you can set planning goals and scorecarding metrics for elements such as:

Loss incidents (#) & Value ($)
Risk level index
Claim payments ($)
Claims aging
Credit balance ($)
Loss incidents & Value ($)
Operational risk rating

You can analyze these goals and metrics by a number of dimensions to find the hidden gems in the data, including:

Credit limit range
End customer location
Date
Product line
Department/company organization.

Using the Risk Management decision area

Risk Management helps Executives track risks against a common map of the business. This helps you answer questions such as:

Operational risks : Do the escalating costs of employee benefits and uncertainty in workers’ compensation claims mean different agreements are required from our insurance carriers?
Default rate: What operating area has the highest default rate among its customers? How does it vary by credit limit?
Write-off amount: Is there an end customer location or industry with higher write-off amounts?

Ideally, this decision area combines both qualitative and quantitative information. Qualitative risk ratings and assessments are more reliable and verifiable when they are underpinned by numbers that measure risk incidents, events, and loss amounts. Setting accepted risk thresholds, modeling expected outcomes, and monitoring actual results ensures finer insights and tweaking for managing risk.

For many risks, such as those related to SOX, specific internal controls are in place to mitigate risks. This decision area helps to flag the controls that are most effective and reduce inherent risk to a more acceptable exposure of residual risk for better performance management.

Performance Management for
Executive Management

Page: 1 2 3 4 5 6 7

I'm interested in better performance— my next steps