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Operational risk analysis

Business Benefits of Leveraging Operational Risk Analysis

Today, businesses across all industries encounter various types of risks such as operational and financial risks. These risks, if not managed properly, can impact the organization’s bottom line. To carry out a risk analysis, businesses will need to analyze possible threats that they could face and prioritize them based on their severity for the organization.  Operational risk analysis helps businesses to identify and manage operational threats that could undermine key business initiatives. To help you out, our experts have listed out steps of operational risks analysis and their benefits.

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Steps of Operational Risk Analysis

Risk identification – The initial phase of the operational risk analysis process involves risk identification. In this phase, businesses will need to identify all the risks that might impact the organization’s operations or its outcome. A SWOT analysis process can help businesses in this phase of the operational risk analysis process.

Analyzing the risks – The next step after risk identification involves determining the likelihood and consequence of different risks in the market. Here, businesses must also develop an understanding of the nature of the risk and its potential to impact the operations of the organization.

Risk prioritization – In this phase of the operational risk analysis process, businesses must determine the risk magnitude, by analyzing the likelihood and their consequences. Also, businesses must categorize them based on their severity.

Take operational risk management solutions and approaches – In this step, businesses must assess the highest ranked risks and take proactive approaches to tackle them.

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Benefits of Operational Risk Analysis

#1: Identify security vulnerabilities

Operational risk analysis helps to evaluate external and internal threats within an organization. Also, it will identify current security vulnerabilities, inefficiencies, and non-compliances with standards for security policies. By identifying security vulnerabilities in advance, businesses can stay take proactive measures to prevent them before they impact the organization’s operation. Moreover, it can prevent businesses from making a costly decision that would result in huge losses.

#2: Prevents security breaches

These days, security breaches are common in all industries. In the case of online businesses such as e-commerce, leveraging operational risk analysis can help businesses to take preventive approaches to ensure the safety of customers’ personal details. Alternatively, in the case of a brick and mortar store, operational risk analysis can help businesses to take proactive measures to tackle market challenges.

#3: Plan for future success

With supply chains, financial markets, and trade functions getting linked to each other, identification and mitigation of operational risks becomes inevitable for businesses to plan for future success. Early identification of operational threats can help businesses to improve the effectiveness of the risk management operations, strengthen the decision-making process, and reduce potential damage from future risks. Additionally, leveraging operational risks analysis solutions helps businesses to improve the reliability of business operations and better plan for the future.

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Operational risk analysis

Realizing Savings in Operational Cost by $2.7 Million for an Oil and Gas Company | Operational Risk Analysis Engagement

Operational Risk Analysis for the Oil and Gas Industry

Although the oil and gas industry contributes significantly towards the national GDP, factors such as market volatility and fluctuating oil prices are exposing oil and gas companies to a variety of operational and financial risks. Owing to the rising risks in the oil and gas industry, companies are finding it challenging to sustain a leading edge in today’s competitive marketplace. As such, identifying and mitigating major risks in the industry are becoming vital for oil and gas companies to stay ahead of the curve. This is where the real power of leveraging operational risk analysis comes into play.

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Business Challenge

The client is an oil and gas company based out of Europe. Volatile raw material prices, inability to expand reserves, operational risks, and supply-demand mismatch were hindering the profitability of the company. Also, this impacted the company’s operational efficiency and production capacity. The client, therefore, wanted to identify operational risks impeding their business growth. They approached the experts at Infiniti Research to leverage their expertise in offering operational risk analysis solution.

With Infiniti’s operational risk analysis solution, they also wanted to:

Prevent operational risk from threatening profitability

Inadequate reserve estimates and supply-demand management challenges heavily impacted the production process of the company. This subsequently affected the company’s profitability. With Infiniti’s operational risk analysis solution, the client wanted to identify all the operational risks in advance and undertake operational risk management strategies to tackle them.

Reduce financial risk

Economic downturns posed certain risks for companies in the oil and gas industry. Therefore, with Infiniti’s operational risk analysis solution, the client wanted to take appropriate steps to tackle financial risks before they impact their business operations.

Contact us to know how our operational risk analysis solution can help your company to analyze risks impacting your business operations and save millions of dollars in operational cost.

Solutions Offered

To help the client tackle the above-mentioned challenges, the experts at Infiniti Research conducted a quantitative risk assessment study. The study involved identifying all the operational risks and prioritizing them based on their impact on the organization.

As a part of the operational risk analysis engagement, our experts also carried out a market assessment study to help the client keep tabs on target market segments, forecast demand-supply shifts, and provide insights on the potential impact of changing factors on business segments.

Also, by leveraging Infiniti’s expertise in offering supply and demand analysis solution, the experts helped the client to efficiently manage their supply chain processes.

Results Obtained

With Infiniti’s operational risk analysis solution, the company was able to identify all the risks impacting their business operation and also prioritize them based on their severity. Also, they were able to efficiently implement operational risk management strategy. Furthermore, our operational risk analysis solution helped the client to enhance their operational efficiency and realize savings of over $2.7 million in their operational cost.

Operational Risk Analysis

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How to Increase the Efficiency of Your Risk and Compliance Management Strategy By 50%

The proliferation of new business processes and the changing government rules and regulations around the globe are posing challenges for small and big companies alike. However, many companies still rely on an old-school approach when it comes to risk and compliance management. Business risks today are highly volatile and rapidly changing. Consequently, the compliance and risk management approaches of every company should continuously evolve to survive these dynamic changes. Experts at Infiniti Research believe that shifting focus on the alignment of functional processes and creating a symbiotic relationship between them can play a major role in enhancing the risk and compliance management of companies. Here are some proven strategies that can be adopted to improve the existing risk and compliance of companies.

At Infiniti, we help clients to gain a comprehensive view of the gaps in their risk and compliance management by setting benchmarks and analyzing their existing processes. RFP to get in touch with our experts for more insights.

How to improve risk and compliance management

risk and complianceUse a unique compliance and risk strategy

By adopting a unique risk and compliance management strategy, companies may anticipate future industry trends across business, products, processes, services, and geographies. This will help the organization gain a competitive advantage through well-planned compliance management programs.

Right combination of tools and technology

The risk and compliance process of companies can be made more efficient by identifying and adopting the right combination of technology and best practices. With the amount of advanced tools and technology today, this would be a rather easy task. Using a tool that can extract data from the system and then provide comprehensive insights on deviations from the desired risk and compliance policy will prove to be useful.

Collaboration and functional integration

Risk and compliance should be integrated into an enterprise-wide risk management process. This helps ensure that any issues faced by the organization relating to risk and compliance are not considered in isolation. It must include all activities related to risk and compliance management, and it should provide a framework that can be leveraged to assess an organization’s exposure to risk. This gives organizations a better opportunity to make timely and well-informed decisions.

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Enhance corporate governance

Compliance and risk management is closely linked to corporate governance. Effective corporate governance sets the tone for understanding risks and risk management capabilities and aligns the risk appetite with the organization’s opportunity-seeking behavior. Furthermore, elevating risk management to a strategic level strengthens board oversight, clarifies risk management roles and responsibilities, sets risk management authorities and boundaries, and ensure effective communication of risk responses in support of key business objectives.

Training initiatives

Not just the employees, even managers in some of the top companies around the globe still are completely unprepared to address risk and compliance related issues. Considering the fact that compliance is one of the greatest risks your organization faces, appropriate training should be at the top of any company’s risk management plan. Moreover, having well-defined processes as well as documented policies, procedure and guidelines help ensure better risk and compliance management throughout an organization.

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Competitor analysis

5 Steps to Sustainable Digital Risk Management

Digital risk management is the next step in enterprise risk and security for organizations that increasingly rely on digital processes to run their businesses. Digital risk has a long-term effect on the initiatives, decisions, and actions of an organization. Therefore, organizations that mostly rely on digital processes to run their business should have a clear vision of security and digital risk management. If you fail to manage digital security, it is likely to sabotage your revenue. Digital risk management is a critical process as it impacts the performance of your business. It begins with identifying the potential risks, analyzing them, and finally controlling them. However, this critical task has been made easy by the modern-day technology that allows every business to create a structured and sustainable risk management program. Today, it is easy, but it requires a bit of vigilance since “what means apples today may turn to be oranges tomorrow. To make it simple for you, here are a few simple steps to help you create a sustainable digital risk management program:

Steps to Sustainable Digital Risk ManagGet More Infoement

Step#1: Follow a structured program that can assist dynamism

Today, security has become a wider-level issue. Online merchants are facing huge losses with the rapidly growing risks and frauds that need to be evaluated constantly. So, for businesses that need to deal with big data, threats mainly arise due to the improper and unstructured way of handling sensitive and personal data of customers. Ensuring data protection and encryption is the key here. This is the very first and basic step to follow in sustainable digital risk management.

Step#2: Discover loopholes with machine learning and AI

Adoption of new technologies has been benefiting all businesses today. Machine learning and artificial intelligence are smart innovations of the modern age that will become a crucial part of security solutions in the days to come. Businesses need to take complete advantage of both the technologies to manage fraud detection, security, and other regulatory compliance functions. Therefore, employing these technologies to discover loopholes forms a very important step for sustainable digital risk management.

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Step#3: Identify and analyze major challenges

Any digital risk management program begins with the identification of key vulnerabilities and risks across all business functions. Risk identification helps you mitigate such risks. Business leaders along with the members of the organization should make informed decisions and choices through a structured risk assessment and identification program that supports flexibility, resilience, and accountability across different business functions.

Step#4: Recognize new possibilities with blockchain

The latest and the most trustable crypto technology of blockchain has the potential to obstruct both internal and external threats. Today, several sectors like banks and other financial organizations have adopted this technology. This technology promises to deliver incredible digital risk management possibilities in the supply chain, healthcare, banks, insurance, and other areas that deal with huge data and currency transactions.

Are you looking for ways to mitigate risks? Do you think beyond traditional risk and security issues? Get in touch with us now to know how our digital risk management solutions can help you protect your sensitive data

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market segmentation

4 Reasons Why You Should Improve Operational Risk Management in Manufacturing

Basically, risks are of different types and many of them are braided together like reputational risks, financial risks, operational risks, third-party or supply chain risks, legal or compliance risks, and several others. Operational risks, generally, are viewed through the lens of safety management in an organization but for manufacturers, it is important to see the link between safety and operational risk management. The rationale for improving the operational risk management process is not only limited to safety but goes beyond it. There are many compelling tested and verified reasons to improve operational risk management in the manufacturing sector.

In this article, we have discussed a few of those reasons that establish the fact that it is highly essential to improve operational risk managemContact USent process to improve productivity and growth of an organization.

Reasons to improve operational risk management process

Reason 1: Attain financial goals

There are many manufacturers who see the relationship between enhancing productivity and mitigating operational risks. But for better operational risk management, it is essential to move one step further and also see the relation in terms of financial performance. It is important to minimize the impact of operational risks on financial goals. Additionally, manufacturing companies must align operational data with financial data to analyze the financial impact of adverse events.

Reason 2: Improve and increase collaboration

If the financial goals are achieved, it has hard and quantifiable benefits. But implementing an operational risk management process also fetches soft benefits like improved cooperation and collaboration. This can furthermore help in the joint management of risks. The implementation of an operational risk management framework provides the catalyst as well as an incentive for organizations to also boost cross-functional collaboration.Request Proposal

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Reason 3:  Standardize risk assessment

Manufacturing organizations, globally, understand that if they successfully mitigate operational risks, it improves the likelihood that corporate goals will be met. To mitigate operational risks successfully, the same procedures, policies, and risk management process must be applied across all the verticals of the company. Best-in-class manufacturers have standardized risk quantification processes across the enterprise.

Reason 4:  Build a risk awareness culture

To manage operational risks, it is very important to build a culture of risk awareness. This culture helps manufacturers to establish better visibility into control measures of operational risks. This can further help them to integrate a risk mindset, which further minimizes operational risks and their impact on financial and corporate objectives.

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