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The term Operational Risk Management (ORM) is not new. It has been tossed about in businesses across North America for the last several years. ORM and the oft associated term Enterprise Risk Management (ERM) have generally been used as corporate buzzwords, business culture idioms referenced in board meetings and articulated during presentations. Recent developments, such as the creation of the Sarbanes-Oxley (SOX) Act in 2002 in response to growing financial scandals in the U.S., have brought Operational Risk Management, Enterprise Risk Management and related concepts from the backrooms to the forefront of corporate America.

The inescapable reality is that every single day businesses incur losses and experience operational disruptions due to failures by employees, incorrect implementation of processes and technologies as well as wilful disobedience to internal controls. These losses may be manifest in the form of uncollectible receivables from disappointed clients, lost sales due to call centre failures or unproductive employee downtime when computer systems are unavailable, or a host of other potential problems. While most businesses have developed ad hoc methods of dealing with such losses in the past, legislation (such as SOX and the Basel Accord) has made standardized compliance procedures much more complex. Thankfully, just as these new rules have given rise to increased awareness of ORM/ERM, new tools (including Risk Management software) have been developed to aid compliance efforts.

The new regime of Sarbanes-Oxley, under the direction of the Public Company Accounting Oversight Board (PCAOB) which is in turn accountable to the Security and Exchange Commission (SEC), has undoubtedly benefited the business world by providing a foundation from which to decrease corporate fraud. However, the complexity and associated technical, labour and administrative costs posed to business is also considerable. The realities of both individually large and collectively mundane errors resulting in loss, as well as the newly regulated reporting of those losses, affect virtually all areas of every business each and every day. Therefore, it is in each company’s best interest to simultaneously find ways to cut losses while keeping regulatory compliance costs down. Hence the rebirth of Operational Risk Management/Enterprise Risk Management and the new demand for Risk Management software solutions.

Traditionally, few operational losses were measured in any accounting system, and rarely were the loss incidents tracked and analyzed in any way; the time and paperwork required to do so was simply daunting. Because there was no standard legislation in place, any Risk Management software tools were often proprietary and slightly more than electronic log books at best. New technologies and attitudes have allowed loss incidents to be seen as more predictable and able to be grouped into risk categories. Proper analysis of these incidents can result in attribution to root causes which aids in mitigation. Even this beginning leads to dramatically reduced costs while achieving huge gains and strategic advantages from well crafted Operational Risk Management policies and Enterprise Risk Management procedures.

Changes in legislation, technology and attitudes related to ORM/ERM have produced not just economic gains, they have led directly to re-invigorated business innovation and even created improvements in the quality of life. For example, safety, quality and environmental related loss incidents have proven to be not only manageable and avoidable, but sound management of these issues has conferred greater advantage on those who succeeded while driving many who did not adapt out of business. While large scale corruption may have brought about regulatory changes, these changes have spurred a re-visioning of Enterprise Risk Management. Advanced Risk Management software has allowed business to more directly mitigate losses. This has resulted in a cleaner, more efficient and more competitive business environment.

In the post-SOX environment, the same social and political pressures on organizations are present. Improved attitudes and tools have encouraged the proliferation of sound Operational Risk Management to the economic and strategic benefit of those properly prepared for the journey. To find out how Paisley Consulting can help your company on that journey, whether through the provision of powerful Risk Management software or expert consultation on Enterprise Risk Management, visit www.paisleyconsulting.com

Joe Armstrong writes about Enterprise & Operational Risk Management for http://www.paisleyconsulting.com

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Creativity can be defined as problem identification and idea generation whilst innovation can be defined as idea selection, development and commercialisation.

There are distinct processes that enhance problem identification and idea generation and, similarly, distinct processes that enhance idea selection, development and commercialisation. Whilst there is no sure fire route to commercial success, these processes improve the probability that good ideas will be generated and selected and that investment in developing and commercialising those ideas will not be wasted.

Idea valuation techniques include:

a) Comparing idea types

b) Analysing fit with the firm

c) Analysing practical impediments

d) Deciding when to issue GO or KILL decisions when ideas are within the idea funnel

However, what is often overlooked is in-depth analysis of user benefits. Ultimately, an idea is valued by user take-up. In a commercial world, it is valued even more severely - by profit margin and shareholder / stakeholder benefits.

Analysis of the buyer experience cycle and the utility layers is a start point.

Along the buyer experience cycle, it is possible to measure benefit along at least six stages. These include:

a) Purchase

b) Delivery

c) Use

d) Supplements

e) Maintenance

f) Disposal

Along the utility level, it is possible to measure user benefit along several more levels, including:

a) (Collective) productivity

b) Simplicity

c) Convenience

d) Risk

e) Fun and Image

f) Environmental

g) Friendliness

These topics are covered in depth in the MBA dissertation on Managing Creativity & Innovation, which can be purchased (along with a Creativity and Innovation DIY Audit, Good Idea Generator Software and Power Point Presentation) from http://www.managing-creativity.com.

You can also receive a regular, free newsletter by entering your email address at this site.

Kal Bishop, MBA

**********************************

You are free to reproduce this article as long as no changes are made and the author’s name and site URL are retained.

Kal Bishop is a management consultant based in London, UK. He has consulted in the visual media and software industries and for clients such as Toshiba and Transport for London. He has led Improv, creativity and innovation workshops, exhibited artwork in San Francisco, Los Angeles and London and written a number of screenplays. He is a passionate traveller. He can be reached on http://www.managing-creativity.com.

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Answering the question “what is management consulting?” is as
difficult as attempting to answer the question “how high is the sky?”
There are two causes for the confusion about exactly what management consultants do. First, management consulting is an umbrella term that encompasses many different careers. Second, management consultants cannot give specific examples of their work because it almost always is confidential and highly sensitive.

The essence of consulting is to help a client create value by providing
information and advice which leads to lasting organizational change in a variety
of ways including development of new strategies, accounting systems, information
systems integration, quality management, process redesign, marketing,
distribution channel development, logistics, leadership training, cost control,
productivity enhancement, leveraging technology, activity based costing,
competitive analysis, human resource strategy and value management.

Experts of all kinds frequently refer to themselves as “consultants to
management,” but only those who advise on the management process itself can
legitimately be called management consultants (though even this generalization
is being challenged today). One definition that has gained widespread acceptance
came not from consultants themselves but from academia.

Management consulting is an advisory service contracted for and provided to
organizations by specially trained and qualified persons who assist, in an
objective and independent manner, the client organization to identify management
problems, analyze such problems, recommend solutions to these problems, and
help, when requested, in the implementation of solutions.

Management consulting in the United States has undergone a very dramatic
change over the past fifteen to twenty years. The reason for this change is to
cater to an evolving market and to stay competitive. About fifteen years ago,
the emphasis was purely on technology. Clients wanted their systems to be better
and faster. The general thinking was that every problem could be solved by
technology. Organizations implemented large, complex systems for accounting,
customer service, sales force automation etc., without giving real consideration
to the people who would have to use them. This also led to different divisions
in an organization using incompatible systems, duplication of work and repeated
storage of information resulting in what is commonly referred to as
“technology stovepipes”. Several years of complex implementations were
followed by a flurry of activity in training staff and building interfaces
between systems used by different divisions within the organization.

About a decade ago, the consulting industry began its most recent
metamorphosis to ultimately reach the state that it has achieved today. This
process began when several top consulting organizations expounded the concept of
total consulting. Moving away from the traditional technology solutions, clients
were now advised to solve problems by considering a combination of strategy,
process, technology and people. Consultants began addressing problems at a macro
level across the entire organization and by viewing the organization as a whole
entity. The consultant evolved from a person who recommended and implemented
technology systems to a person who collaborated with the client and helped
resolve business problems affecting the organization as a whole. The consultant
had morphed; he/she was no longer a technologist but more a trusted advisor.

About the Author

Dr. Atul Uchil is an entrepreneur, business-owner and
author. In addition to several research papers, Dr. Uchil has published the
following books that are available at Amazon, Barnes & Noble, Ingram, Baker
& Taylor, Borders, BooksAMillion, Bertram Books UK, Gardners UK, Alibris and
many other respected and recognized national and international book retailers.

- The Corporate America Survival Handbook: ISBN - 1598000942

- Consulting: A Job or A Lifestyle: ISBN - 1598000640

- I Opted Out: ISBN - 1598000713

For more information about Dr. Uchil and his books visit =>http://www.uchil-llc.com/books.html

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