Magazine article Information Management

No Excuses Approach to Managing Operational Risk

Magazine article Information Management

No Excuses Approach to Managing Operational Risk

Article excerpt

No Excuses Approach to Managing Operational Risk No Excuses: A Business Process Approach to Managing Operational Risk Authors: Dennis I. Dickstein and Robert H. Rast Publisher. John Wiley & Sons Publication Date: 2008 Length: 308 pages Price: $68.50 ISBN-13: 97&O470-22753-4

Source: www.iv/tey.com

Organizations are becoming increasingly aware of the need for both risk process management and business process analysis and management to effectively manage the bottom line, shareholder value, business reputation, and survival - and most organizations look at each separately.

Too often, upper management is not aware of the specific operational risks, denned by the Basel Committee as "the risk of loss resulting from inadequate or failed internal processes, people, and systems or from external events," until a costly disruptive event occurs. Even in those organizations that support mitigation of risk, it is considered the norm to look at it from the viewpoint of its return on investment or cost containment.

No Excuses: A Business Approach to Managing Operational Risk proposes that operational risk should be examined through the business processes of an organization. The authors recognize that integrating business process management with operational risk management can dramatically increase an organization's optimal business performance.

Their book provides a practical approach to help identify and mitigate operational risks and shows how those risks can be directly linked to the business process flows for all industries. It takes readers through four steps to identify:

1. Where their organization is now

2. Where it wants to be

3. How their organization can get there

4. What the next steps are

No Excuses includes case studies and corporate examples to clarify both the need for the approach the authors discuss and the results of implementing their proposed processes. The book demonstrates and discusses a framework for operational risk and a framework for business process management - and then overlaps them into one integrated framework that allows them to work in tandem to effectively manage and mitigate operational risk and improve business processes.

According to the authors, for the integrated framework to work most effectively, "the organization must, beginning at the top and through all of the business functions, truly and fully embrace the concept and the hard work of managing risk. …

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