Technology for better risk management
Applications architect at Dataflo, PIERO DE MARCO, takes a look at how well-configured software solutions can enhance risk management within companies.
Enterprise risk management (ERM) activities need to be focussed on by mid-sized and large enterprises. The integration of a risk management software solution into their daily tasks will enable managers and executives to see and assess the company’s complete risk profile in real time, with accurate data.
Enterprise resource planning solutions, like SAP, enable this. By automating risk identification, monitoring, and notifications, as well as the establishment of a central risk repository for all risk-related data and best practices, visibility of risk and mitigation is available in real time.
If a business has various critical SHEQ-related monitoring or measuring points feeding into a centralised location, reports designed to display trends can rapidly depict positive or negative movements. The result: management can quickly react to the reported information and make the necessary decisions to rectify the situation.
Low risk doesn’t exist
If you are looking at your business and think its risk level is low, consider how even the smallest hiccup can have a snowball effect. Using the supply chain function as an example, risk within this one area can present itself in labour disruption, natural disasters and supplier performance deficiency.
A well-configured software solution can link activity performance to risk actions. Supply chain reporting can provide the right information to the business to mitigate the risk and enable management to make correct sustainable decisions.
Labour disruptions at a supplier and erratic supplies of products can have disastrous consequences if early evasive action is not taken; for example, sourcing from an alternative vendor. By monitoring the performance across the supply chain, management is immediately in a far better position to make proactive decisions using the available reporting tools.
Using SAP software as an example, its Business Objects Risk Management module has a number of elements that allow visual management of key ERM risk categories and actions, with integration to existing applications running in an organisation. Centralised reporting – providing the correct level of detail for all levels of management – will enable the business to closely monitor performance and pre-empt out-of-the-norm situations. Organisations can provide the threshold values in the reports that, when reached, will trigger alerts and kick off processes to begin corrective actions.
Avoiding environmental risk
Risk also covers the environmental obligations of companies in terms of maintaining industry standards and being a good corporate citizen.
Dataflo has been involved in designing and implementing environmental reporting for its global customers for many years. Carbon footprints, and the measurement thereof, are becoming more and more important to businesses. It is the responsibility of any organisation to ensure that it, and its entire supply chain, move in the same direction with regard to saving our environment.
One tool provided by SAP is Carbon Impact OnDemand. The module helps companies to profitably reduce their energy and carbon footprint across operations and supply chains. Designed for the global economy, the tool allows companies to report, analyse and reduce energy and greenhouse gas emissions in a credible and cost-effective way.
The software enables companies to adapt their carbon reduction strategies in an ever-changing global market, characterised by volatile energy prices and tightening regulations.
For some years now SAP has been able to provide real-time reporting of data obtained from a number of disparate systems. This is very useful to business operations as it ensures all processes are within tolerance and provides a reporting tool to quickly correct the process. However, regular data readings over a period of time can show a very different picture and provide management with trends indicating that part of a process requires urgent attention.
Technology is forever evolving, which is exciting for SAP specialists and application developers like Dataflo, and even better for their clients as they can constantly improve business processes and access to business information at the click of a button, or tap of a touch screen.
ERM, in the grand scheme of business, is relatively young, but as awareness of ERM and the solutions available within business and technology grows, and regulatory and input cost pressures increase, the demand for these types of solutions will ramp up dramatically.