Enterprise Risk Management.ppt

1、Enterprise Risk Management,Framework for establishing industry requirements and priorities,Andreas Vogel September 13th, 2006,Framework for Discussion,This is a strawman proposal which summarizes some thinking and brainstorming Next steps Team discussion and refinement Framework for discussion with

2、ISMs and IBUs Framework for discussion with partners, analysts, customersThe goal is to create a product strategy which optimizes between market requirements and SAP development capabilities.,Train of Thought (for non-audio consumption),Risk Management Processes Identifying the key processes and pro

3、cess steps within Classify steps by generic vs. specific to a risk class Modeling and monitoring are risk class specific,Risk Monitoring Identify a list of risk classes, the corresponding key risk identifiers, and the industries where they apply (some are generic),Risk Modeling Understand pre-requis

4、ites for quantitative modeling Identify techniques Identify industries which satisfy pre-requisites Understand approach to solution for qualitative modeling and analysis,Value drivers in key industries ERM value pyramid Used banking as an example to identify key value drivers within the ERM process

5、Provide similar analysis for other key industries,Managing Enterprise Risk Processes View,Setting Risk Appetite,Strategic Planning,Risk Monitoring,Risk Identification and Assessment,Risk Identification Surveys Workshops Review,Risk Assessment Qualitative Quantitative,Risk Registration Risk database

6、Description Owners, etc.,Models/Simulation VaR, Monte Carlo, etc.,Monitoring Risk indicators,Specific,Generic,Train of Thought (for non-audio consumption),Risk Management Processes Identifying the key processes and process steps within Classify steps by generic vs. specific to a risk class Modeling

7、and monitoring are risk class specific,Risk Monitoring Identify a list of risk classes, the corresponding key risk identifiers, and the industries where they apply (some are generic),Risk Modeling Understand pre-requisites for quantitative modeling Identify techniques Identify industries which satis

8、fy pre-requisites Understand approach to solution for qualitative modeling and analysis,Value drivers in key industries ERM value pyramid Used banking as an example to identify key value drivers within the ERM process Provide similar analysis for other key industries,Monitoring of Key Risk Indicator

9、s Industry Specific,Risk Monitoring of Key Risk Indicators - Generic,Train of Thought (for non-audio consumption),Risk Management Processes Identifying the key processes and process steps within Classify steps by generic vs. specific to a risk class Modeling and monitoring are risk class specific,Ri

10、sk Monitoring Identify a list of risk classes, the corresponding key risk identifiers, and the industries where they apply (some are generic),Risk Modeling Understand pre-requisites for quantitative modeling Identify techniques Identify industries which satisfy pre-requisites Understand approach to

11、solution for qualitative modeling and analysis,Value drivers in key industries ERM value pyramid Used banking as an example to identify key value drivers within the ERM process Provide similar analysis for other key industries,Risk Modeling and Simulation,Statistically relevant historical data sampl

12、es, e.g. Stock market data Accident static of thousands of employees over years Historical demand data Applicable modeling and simulation technique, e.g. Value at Risk Monte Carlo Simulation,Prerequisites for Quantitative Modeling,available,Apply quantitative modeling and simulation techniques Banki

13、ng Insurance,not available,Apply qualitative techniques What-if scenario analysis,Are there other industries Where quantitative modeling can be applied?,How would tools for scenario analysis look like?,What could be done outside the financials services industry?,Train of Thought (for non-audio consu

14、mption),Risk Management Processes Identifying the key processes and process steps within Classify steps by generic vs. specific to a risk class Modeling and monitoring are risk class specific,Risk Monitoring Identify a list of risk classes, the corresponding key risk identifiers, and the industries

15、where they apply (some are generic),Risk Modeling Understand pre-requisites for quantitative modeling Identify techniques Identify industries which satisfy pre-requisites Understand approach to solution for qualitative modeling and analysis,Value drivers in key industries ERM value pyramid Used bank

16、ing as an example to identify key value drivers within the ERM process Provide similar analysis for other key industries,Requirements too sophisticated for current SAP offering,Sweet spot for SAP ERM,No $,ERM Value Pyramid,ERM is core business,ERM is key to business,ERM is important to business,ERM

17、is core value driver Companies have sophisticated tools, processes and org structures in place Budget available,Banking Insurance,Have agreement on what the sweet spot is and why? Need to review selected industry in this bucket with IBUs,ERM Value Pyramid based on Deloitte Input,ERM is core business

18、,ERM is key to business,ERM is important to business,ERM is core value driver Companies have sophisticated tools, processes and org structures in place Budget available,Banking Insurance,Value Drivers in Financial Services,Setting Risk Appetite,Strategic Planning,Risk Monitoring,Risk Identification

19、and Assessment,Risk Identification Surveys Workshops Review,Risk Assessment Qualitative Quantitative,Risk Registration Risk database Description Owners, etc.,Response Strategy To hazards,Actions to change Frequency Impact Investment decisions,Models/Simulation VaR, Monte Carlo, etc.,Monitoring Risk

20、indicators,Can we make similar assessment for other industries?,Case Studies and Customer Interviews I,1 Excerpt from Barton et al, “Making Enterprise Risk Management Pay Off”, fei Research Foundation, 2002,Case Studies and Customer Interviews II,1 Excerpt from Barton et al, “Making Enterprise Risk

21、Management Pay Off”, fei Research Foundation, 2002,Case Studies and Customer Interviews III,2 Excerpt from Paul et al, “Enterprise Risk Management: Pulling it all together”, The Institute of Auditors Research Foundation, 2002,Case Studies and Customer Interviews IV,2 Excerpt from Paul et al, “Enterprise Risk Management: Pulling it all together”, The Institute of Auditors Research Foundation, 2002,Southern Company3,3 Phone interview by Andreas in 2005/2006,Bombardier3,3 Phone interview by Andreas in 2005/2006,Hydro One3,3 Phone interview by Andreas in 2005/2006,