Enterprise Risk Management is one of the most crucial responsibilities that involves Value at Risk for top management of the organizations. It is imperative to manage the strategic risks and operational risks for the organization and to make sure that they are aligned to the strategy execution framework used in the particular organization. Implementation of a Balanced Scorecard approach that holds out beyond traditional financial concerns helps the organizations better manage the risks. While most of the risk management software offer a partial solution, fruiStrategy® Balanced Scorecard is a complete solution that inherently manages the risk of strategy and is operational in nature. With an emphasis on continuous improvement, fruiStrategy® Balanced Scorecard is a strategy-based performance management system that links an organization’s mission, strategic objectives, measures, initiatives, and links all relevant risks as part of strategy execution methodology. Owing to its enterprise-wide approach, it provides an excellent platform to focus on risk management as a part of performance measurement evaluations.
A core element of enterprise risk management in fruiStrategy is that risks and strategy are aligned. As management examines various strategic alternatives, it also evaluates them to determine the impact on the enterprise’s risk profile. Once strategy choices are made, management can identify risk responses, assign accountability, and monitor implementations in a coordinated and integrated approach to ensure the objectives are met. As ERM is leveraged into fruiStrategy® Balanced Scorecard, the scope of management’s focus on broader sets of risks is strengthened by explicitly linking risk management to strategic performance measurement. It captures more information about risk management objectives and performance measures and people become more aware of risks resulting in the enhancement of learning and growth.
Let us begin with a few common risks affecting business strategy and operations such as unforeseen adverse events that enforce a shift in strategy, competitive risks, environmental & safety risks connected with business decisions, financial risks, supply chain risks, and capacity risks. fruiStrategy prevents a biased focus on just finance performance and promotes a wider view of other strategic dimensions of the organization and activities. The other contribution to risk management is the strategy map that provides a visual representation of the customer and stakeholder value creation process of the organization. The cause and effect between strategic objectives create a flow of value creation from performance driving objectives to results objectives. This provides a clear line of sight to the risks associated with each strategic objective and establishes a comprehensive risk management system.
Risk monitoring on a continual basis through heat maps and risk dashboards is essential with constant communication for any deviation to the plan is an important requirement for managers to avoid any oversight. The risk budget can be allocated and any expenditure towards risk can be registered and cumulative expenditure can be reviewed against the risk management strategy. Risk management could be part of strategy review meetings as an Agenda item that ensures risk owners to discuss along with the strategy agenda items and put up action points.
Another key component of fruiStrategy is Strategic initiatives that include initiatives designed to close performance gaps in the current level of risk and the desired level. For instance, an initiative around the safety training of a worker would improve safety operations in the field. Furthermore, performance measures can be specifically tailored to measure the risk performance of many other elements that affect business success. To suffice it all, fruiStrategy® Balanced Scorecard identifies key risk indicators against each objective alongside existing KPIs and emerges as an optimal business solution for risk management.
fruiStrategy empowers to use Risk management along with strategy execution methodology (Execution Premium), Enterprise PMO, personal performance, BSC, and communications management. Please connect with our expert to discuss more about the features of fruiStrategy® BSC solution to embrace robust strategy execution in your organization.
Please contact Shaik Abdul Khadar, Strategy Management Expert at [email protected] or +917799798333 for a quick demo or more information.