Risk Management Services
In the realms of Risk Management; Enterprise Risk Management (ERM), Operational Risk Management (ORM), Project Risk Management (PRM) and Supply Chain Risk Management (SCRM) are four distinct but interconnected disciplines that organizations commonly employ to address risk, with an additional specialized discipline of Security Risk Management (SRM).
"Interconnected Disciplines Safeguarding Organizational Resilience."
Operational Risk Management (ORM) emerges as a cornerstone in bolstering organizational resilience, addressing risks inherent in day-to-day operational activities. In the realm of Supply Chain Risk Management (SCRM), ORM assumes a pivotal role by intricately navigating the complex landscape of operational intricacies.
While Enterprise Risk Management (ERM) embraces a holistic, organization-wide perspective, and Project Risk Management (PRM) focuses on project-specific risks, ORM in SCRM hones in on the risks embedded within the operational heartbeat of the supply chain.
This strategic integration of ORM into the broader risk management framework acts as a safety net, intricately woven to safeguard against potential pitfalls during routine functions.
By embracing ORM within the SCRM paradigm, organizations create a robust foundation for identifying, assessing, and mitigating risks within their operational core. The interplay of ORM and SCRM not only fortifies the supply chain against disruptions but also instills a proactive risk-aware culture, ensuring sustained operational resilience in the face of dynamic challenges.
Enterprise Risk Management (ERM)
ERM involves the implementation of strategies and processes designed to identify, assess, mitigate, and monitor risks within and throughout an entire organization, fostering a comprehensive risk management framework that aligns with organizational objectives.
Operational Risk Management (ORM)
ORM is defined as a continual recurring process that includes risk assessment, risk decision making, and the implementation of risk controls, resulting in the acceptance, mitigation, or avoidance of risk within the operational processes of an organization.
Project Risk Management (PRM)
PRM is a dynamic discipline that goes beyond risk identification—it involves the practical implementation of strategies and measures tailored to address risks specific to a particular project, using a proactive and systematic approach to ensure project success.
Supply Chain Risk Management (SCRM)
Supply Chain Risk Management (SCRM) is a comprehensive approach that involves the systematic identification, assessment, and mitigation of potential disruptions to the seamless flow of goods and services within a supply chain.
Key Differences
ERM
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Scope & DurationItem Link List Item 1
ERM: Encompasses risks across the entire organization, addressing long-term strategic risks and operational uncertainties that affect the overall enterprise.
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ObjectivesItem Link List Item 2
ERM: Aims to enhance the organization's ability to achieve its strategic goals and objectives by identifying, assessing, and mitigating risks at the enterprise level.
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Time HorizonItem Link List Item 3
ERM: Considers risks with a long-term perspective, acknowledging that some risks may unfold over an extended period.
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IntergrationItem Link List Item 4
ERM: Integrates risk management into the organization's overall governance, strategy, and daily operations, fostering a holistic risk-aware culture.
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ComplexityItem Link
ERM: Considers the organization's overall risk appetite and tolerance, guiding risk-taking decisions at the enterprise level.
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Risk ToleranceItem Link
ERM: Considers the organization's overall risk appetite and tolerance, guiding risk-taking decisions at the enterprise level.
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Stakeholder InvolvementItem Link
ERM: Involves a broad range of stakeholders, including top management, employees, shareholders, and external partners.
ORM
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Scope & DurationItem Link List Item 1
ORM: involves the systematic identification, assessment, and mitigation of risks related to day-to-day operations, generally of a business unit or units.
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ObjectivesItem Link List Item 2
ORM: The primary objective is to ensure the smooth functioning of operational processes and systems by proactively managing potential threats.
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Time HorizonItem Link List Item 3
ORM: Operates within the project's defined timeline, addressing risks that may impact the project during its lifecycle for both short-term and long-term implications.
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IntergrationItem Link List Item 4
ORM: Integrated into the broader risk management framework, aligning with organizational objectives.
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ComplexityItem Link
ORM: Involves risks associated with personnel, technology, processes, and external factors, requiring a nuanced understanding.
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Risk ToleranceItem Link
ORM: Requires tailored risk tolerance considering the criticality of operational processes.
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Stakeholder InvolvementItem Link
ORM: Engages operational teams, leadership, and other stakeholders involved in daily activities.
PRM
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Scope & DurationItem Link List Item 1
PRM: Focused on risks within a specific project, with a defined start and end, aiming to manage uncertainties that could impact the project's objectives.
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ObjectivesItem Link List Item 2
PRM: Primarily concerned with ensuring the successful delivery of a specific project, focusing on risks that could hinder project completion, timelines, or outcomes.
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Time HorizonItem Link List Item 3
PRM: Operates within the project's defined timeline, addressing risks that may impact the project during its lifecycle.
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IntergrationItem Link List Item 4
PRM: Typically operates as a standalone function within the project management framework, concentrating on risks specific to the project.
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ComplexityItem Link
PRM: Focuses on risks that are directly related to the project's scope, resources, and stakeholders, often with a more straightforward organizational structure.
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Risk ToleranceItem Link
PRM: Primarily engages project stakeholders, including project managers, team members, and clients or end-users.
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Stakeholder InvolvementItem Link
PRM: Primarily engages project stakeholders, including project managers, team members, and clients or end-users.
SCRM
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Scope & DurationItem Link List Item 1
SCRM: Concentrates on identifying, assessing, and mitigating risks within the supply chain, considering factors such as logistics, suppliers, and external disruptions.
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ObjectivesItem Link List Item 2
SCRM: Aims to enhance the resilience of the supply chain, ensuring the uninterrupted flow of goods and services despite disruptions.
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Time HorizonItem Link List Item 3
SCRM: Deals with risks that may impact the supply chain over a specified period, considering factors like lead times and external events.
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IntegrationItem Link List Item 4
SCRM: Involves the seamless integration of risk management practices across all stages of the supply chain.
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ComplexityItem Link
SCRM: Engages external stakeholders such as suppliers, logistics partners, and customers in the risk management process.
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Risk ToleranceItem Link
SCRM: Tailors risk tolerance to the specific supply chain's goals and constraints, focusing on ensuring uninterrupted flow.
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Stakeholder InvolvementItem Link
SCRM: Engages external stakeholders such as suppliers, logistics partners, and customers in the risk management process.
Process Driven
No matter what the Risk Management Approach, The International Organization for Standardization defines the risk management process in a four-step model:
- Establish context, criteria and scope
- Risk assessment
- Risk identification
- Risk analysis
- Risk evaluation
3. Risk treatment
4. Monitor and review
This process is cyclic as any changes to the situation (such as operating environment or needs of the BU) requires re-evaluation.
Fortifying Operational Resilience
Our approach involves the foresight, identification, and meticulous assessing events that may impact your organization's safety, financial well-being, and security.
In essence, ORM acts as the vigilant guardian of operational processes, identifying vulnerabilities and implementing robust strategies to ensure uninterrupted business operations.
This nuanced approach adds a layer of protection that goes beyond strategic and project-specific considerations, contributing significantly to an organization's overall risk resilience.
By seamlessly integrating ORM with ERM and PRM, organizations can craft a comprehensive risk management strategy that fortifies the core of their operations while simultaneously addressing risks at the enterprise and project levels.
This synergy creates a well-rounded risk management framework, enhancing the organization's ability to navigate uncertainties and thrive in a dynamic business environment.