| This article will focus on two where your operations | | | | strategic version which includes all the other versions |
| and strategic people can collaborate to actually make | | | | applied across the entire company, hence the |
| or save money for the company. That is correct. We | | | | enterprise name. |
| are going to talk about the difference between the | | | | This is one more version of the idea that business |
| enterprise and operational versions. | | | | often compartmentalizes their people, departments |
| At the simplest level, think of operational risk | | | | or functions and some initiative is needed to break |
| management as part of an enterprise risk | | | | down walls and let people and the system work |
| management system. Some people view the | | | | better. In the risk world, the enterprise flavor breaks |
| comparison as like the discussions you can read | | | | down silos between the other risk areas. It is even |
| about the difference between strategy and tactics. | | | | better when you ensure that some common sense is |
| Both strategy and tactics are needed to execute | | | | applied to the results, rather than the process being |
| corporate vision for your company to move forward | | | | taken over by super quantitative models which are |
| as it executes annual plans and long term goals. Why | | | | so complicated that almost no one can understand |
| should the relationship between these two versions | | | | what is happening enough to ask if the results make |
| of risk mitigation not have the same type interaction? | | | | sense. |
| Wikipedia, the free encyclopedia defines the term | | | | Bottom line? Risks are what really go wrong when |
| operational risk management (ORM) as a continual | | | | you are not looking: stupid things like bounced |
| cyclic process which includes risk assessment, risk | | | | checks, losing your best customers or best people |
| decision making, and implementation of risk controls, | | | | when you are blindsided. |
| which results in acceptance, mitigation, or avoidance | | | | You need a perspective of business under the |
| of risk. ORM is the oversight of operational risk, | | | | microscope and to have lived to tell the tale. After |
| including the risk of loss resulting from inadequate or | | | | analyzing and helping over 200 companies, I have |
| failed internal processes and systems, human factors, | | | | learned one key point:"What You Don't Know About |
| or from external events. | | | | Your Business Can Cost You Your Business. |
| Enterprise risk management (ERM) is the overall | | | | |