Adopting the enterprise risk management approach

July 2001 Security Services & Risk Management

In business, growth is a good thing because it holds the promise of increased profit margins. However, growth also means risk - and the faster the growth, the bigger the risk. Why?

In an article that appeared in Industry Week, Contributing Editor, Juan Hovey, points out that growth is not an unalloyed good. Growth forces change throughout the organisation, affecting every aspect of the business operation from production to marketing to distribution. In fact, rapid growth can force change so pervasive that it spins out of control, threatening the bottom line.

Clearly growth, in short, is a problem. One effective tool created to address this issue may be enterprise risk management, a process that uses advanced risk-management techniques that affect enterprise value. This process encompasses the major categories that are normally associated with corporate risks, including hazard risk, product reliability, financial and strategic risk.

In essence, enterprise risk management is as much a process as a result. It seeks to identify, assess, and control - sometimes through insurance, more often through other means, including the use of technology. Enterprise risk management involves five steps: identifying risk, measuring it, formulating strategies to limit it, carrying out specific tactics to implement those strategies, and continuously monitoring the effort. Simply put, this process seeks to anticipate trouble, not react to it. Already the enterprise risk management approach has found favour with top companies.

"Enterprise risk management means looking at the entire organisation as subject to risk and putting continuous procedures in place to identify, measure, and manage the risk," says Paul Van Zuiden, who heads the Great Lakes risk management practice for the consulting firm Deloitte & Touche, Chicago.

In the local context, there is certainly scope for companies to adopt the enterprise risk management approach, in particular in the retail industry sector. Currently, the picture does not look rosy with the industry's major players all reporting substantial losses in recent times. Insurance companies too are calling for some kind of creative risk-sharing approach from companies and are urging associations to move towards a more effective supply-chain management system. The pressure is mounting on the retail industry for a quick turnaround in income. As a result, risk managers are looking for new methods of identifying the critical risks that affect business.

Hi-Tech Security Solutions has always envisaged risk management to be an integral part of the complete security solution and is of the firm belief that technology has a role to play in helping risk managers maximise profits by optimising the balance between risk and return.

Till next month

Gerard Peter, Associate Editor

Share this article:
Share via emailShare via LinkedInPrint this page

Further reading:

Social media and intelligence-led surveillance
July 2019, Leaderware , Editor's Choice, Integrated Solutions, Security Services & Risk Management
Social media has become a major feature of most people’s lives in the last few years and they can be invaluable as a source of information for companies and security organisations.

The 4th Industrial Revolution
July 2019, Wolfpack Information Risk , Editor's Choice, Cyber Security, Security Services & Risk Management, Industrial (Industry)
Most major industries have turned to and are reliant on technology to run their operations. This is a time of great promise, but also one of frightening peril.

Fake videos not threat to courtroom evidence
July 2019 , Security Services & Risk Management
The Washington Post recently reported top AI researchers are “racing to defuse an extraordinary political weapon: computer-generated fake videos that could undermine candidates and mislead voters".

Fear of the unknown
July 2019, Kaspersky Lab , Cyber Security, Security Services & Risk Management
Fear of the unknown: while there’s still interest in cryptocurrencies, just 19% locally understand how they work.

Leveraging on Africa
July 2019, Managed Integrity Evaluation , Security Services & Risk Management
The purpose of cross-border expansion is to not only ensure sustainable growth and business viability, but also the ability to mitigate growing market risk and uncertainties across the globe.

Assess business resilience in terms of value
July 2019, ContinuitySA , Security Services & Risk Management
Looking at the total value of the investment (VOI) is a far better way of assessing the worth of an in-vestment with many intangible benefits.

Social media and background checks
July 2019, Managed Integrity Evaluation , Security Services & Risk Management
Social media screening and online checks can provide many benefits to a hiring employer; however, such screening should not be carried out in isolation.

Johnson Controls launches Technology Contracting in Africa
July 2019, Johnson Controls , Editor's Choice, News, Security Services & Risk Management
To address the growing challenge of planning, integrating and maintaining a multitude of different, highly connected systems, Johnson Controls is launching Technology Contracting in Africa.

A new method for data destruction
July 2019 , News, Security Services & Risk Management
Xperien is now able to professionally erase data on retired IT assets in compliance with the Protection of Personal Information Act (PoPIA).

Automated contraband detection
July 2019 , Security Services & Risk Management, Transport (Industry)
Today’s X-ray screening solutions have been updated with auto-detection capabilities that will raise an alert if a weapon or even small quantities of explosives and toxic materials are detected.