Risk Assessment
Link Risk, Opportunity and Readiness to Performance Management
Risk managers are charged with ensuring transparency, alignment, and forward looking views throughout the organization. The way this is achieved is through risk assessments.
Successful enterprise risk assessments can be a powerful tool for board and management level strategic decision making by connecting business activities to goals and identifying the risks that threaten to derail these strategic objectives. An unsuccessful risk assessment is little more than a form over substance activity that lacks context and actionable results.
The key to a successful risk assessment is being able to compare information across functions and levels while keeping one comprehensive risk picture.
Risk Identification
LogicManager’s risk identification tools include a pre–built, centralized root–cause risk library, which is entirely customizable and flexible for organizations to document and manage risks unique to their organization. LogicManager’s complete root–cause library also includes best practice compliance and performance balanced scorecard indicators. You can add to your library over time, as well as receive updates on emerging risks or new standards.
Risk Assessments
LogicManager’s risk assessment software tools standardize all assessments throughout the organization. When assessments are carried out on the same standards and assumptions, they can be compared and utilized cross-functionally for more accurate and actionable risk management. LogicManager is populated with industry best–practice assessment criteria, which is also customizable for your organization.
Alignment of Activities, Goals and Risk
LogicManager enables risk managers to tie root cause risks to Board and executive level strategic goals and trace these same risks through the process areas that they affect in order to determine which activities will roll–up to impact organizational objectives. In LogicManager, risk managers are able to prioritize the effectiveness of controls, so that resources and focus are allocated to the issues that will yield the greatest benefit to the organization.
Group Information for Multiple Stakeholders
Because assessments are conducted on the same standards and assumptions, and risks are identified at a root cause level from a common library, process owners can do one risk assessment, and the information can be sliced, diced, and aggregated to serve multiple purposes. It will provide a functional insight for the process owner, tie into governance areas like vendor management, and serve a strategic purpose by rolling-up into board level objectives.
LogicManager’s taxonomy manages the inter–connectivity of these assessments enabling you to group and re-group information to serve any stakeholder, while the value of each assessment is preserved and extended beyond its original intention as the organization evolves.
Top down and bottom up: Get to the front-line activity level over time
Every day front–line managers are making operational decisions about risk, far from organization’s risk appetite policies. The front–line is where income is generated, where employees interact with customers, and where emerging liabilities are first visible. LogicManager’s intuitive system, workflow abilities, and individualized task-oriented home portal, makes it easy for both centralized and decentralized ERM and GRC programs to evolve over time and get others more involved across the organization.
LogicManager’s heat maps take all of an organization’s risks based on highly accurate front-line observations, and can aggregate risks to a level that executives need, with drill-down to detail when needed. This information easily stays current as any changes in assessments are immediately reflected.
Risk Evaluation and Analysis
After completing risk assessments, LogicManager enables you to examine and analyze your risk assessments holistically to prioritize which risks and areas of the business are in the most need for mitigation activities, increased monitoring, and resources.
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LogicManager’s robust analysis tools allowing for better decision making under uncertainty include:
- Voting – vote on risks as individuals and subject-matter experts and discuss collectively as a team to make conclusions
- Weighting – give different risk factors greater a greater contribution to the overall total risk score.
- Tolerances – set tolerance ranges globally and then compare discrete risks with respect to global tolerances for escalation as appropriate.
- What–if scenarios – Capture and analysis of key drivers for different potential outcomes to aid Monte Carlo simulations and other modeling.
- Heat maps, dashboards and reports – Aggregating information across business silos and filtering on strategies and other topics of interest.
Risk assessments must be conducted on a regular basis and when approaching business changes, new initiatives, or high risk issues. LogicManager enables organizations to view the trend over time, giving organizations’ static risk profile context and a reference point so that necessary actions can be taken when small changes in the risk profile are identified before things get out of tolerance.