According to an IBM study of over 1,200 CFOs and senior finance executives, 62 percent of enterprises with over $5 billion in revenue encountered a major risk event in the previous three years, and when a major risk event did occur, 42 percent were not well prepared. Unlike Sarbanes Oxley and other structured, clearly defined compliance initiatives, building an effective operational risk control environment and culture requires proactive identification and frequent review of potentially harmful events.
GRC industry expert and Corporate Integrity president Michael Rasmussen’s favorite operational risk case study is the Titanic in which as he states, “There are a variety of risks the Titanic faced – overconfidence, poorly manufactured rivets, focus on speed while ignoring the external risk environment, inadequate design, and lack of someone diligently watching for icebergs”. While the Titanic was heralded for its superior safety in engineering design, not all risks were considered holistically. In many organizations today, operational risk continues to be managed in silos, where distributed business units and processes maintain their own data, spreadsheets, analytics, modeling, frameworks, and assumptions.
To learn more, check out the “Ultimate ORM Platform” webinar in which Michael Rasmussen and OpenPages director of product management Patrick O’Brien describe the need for a common, enterprise-wide view of risk and what to look for in an “Ultimate ORM Platform”.