Enterprise Risk Management for Large Scale Operations

By having an enterprise risk management (ERM) plan means a company understands this critical area of business and has taken the appropriate steps to deal with it. A properly devised ERM plan will have the methods and process documented so that the risks can be managed in the most opportune way.

A company’s enterprise risk management plan should have certain components in its framework for it to be useful. This framework is a path to properly identifying all associated risks that could have any impact on the business. There should also be a way for the analysis to occur so all that is possible to be known about the risk is revealed.

Two other important parts of the enterprise risk management framework are how a company will respond to the identified risks and monitor them. The right response can be the difference in a risk being just an annoyance or a disastrous situation. Monitoring the risks is more than just being aware of them.

A company’s response to their enterprise risk management plan and its results is an important piece of the puzzle to solving the impact of each risk that is associated with their business. Since most of the identification and analysis of the risks that pose a problem are academic, the variable lies in the action that is taken with each risk.

How and to what degree the variables are handled is the meat of any enterprise risk management plan. The key to reducing the impact of negative influences of the risks associates with a business is the specific action taken in dealing with the risks. There are 4 basic ways to handle them.

The four ways of handling risks in any enterprise risk management plan are avoidance, reduction, sharing the impact or just plain accepting them.

The most common and beneficial is the reduction of the risk. This should be a large section in an enterprise risk management plan. Avoidance cannot always be achieved along with sharing the impact on other parts of the business might cause more harm than good. Acceptance is the second largest category when the costs of reducing the impact are greater than the benefits it will achieve.

Comments

Post a Comment

Popular posts from this blog

Lean Methodology

The use of lean methodology has grown in the manufacturing sector since it was first implemented after World War II. As time has progressed, this methodology has been refined with the end result of creating more, faster and with less. The type of companies that can best utilize the lean methodology approach is manufacturing, because of the principles involved with it. This is to create a product with as little invested as possible in the deliverable. For a company wishing to use the lean methodology , they must first analyze their process in depth. Once the analysis has been completed in every process, the process of eliminating waste can begin on the process as a whole. Each part of the process has to contribute to the end product. The cutting of waste from each and every step in the production of a deliverable is the core essence of the lean methodology approach. This can be in the material that is added or the number of workers necessary to complete the task. The overall reductio...
Read more

Communications Register

Under what situations should I create a Communications Register for my project ? For small, medium and large projects you should always implement a Communications Register. This register will identify all of the communications events that have taken place for the project and also the communications events that are due to take place in the future. The reason for listing the communications events that are due to take place is that it provides a single place where the project manager can use and control communications to stake holders. For example the register will enable the project manager to view the status of all of the communications to date and determine whether or not the stake holders to the project are being kept in the loop and informed.
Read more

Management Methodologies

The modifying and developing of new management methodologies to fit the needs of industry is an ongoing process. With the use of a computer, this has become a much easier process than before. This has made it very easy to create, customize and import existing methodologies along with managing several of them at once. You can use management methodologies to define new process you have developed or group any set of existing process into a new methodology. There are project management methodology programs that can assist in the documentation of your new methodology so it can be used and shared by those you have approved. You can even customize a methodology for a particular size project with this type of program. The most often use of this type of software program is to use several different management methodologies and modify them to you specific needs. This way you’re working environment and available resources can be made the most of in running your project. Most programs that allow ...
Read more