Risk management in businesses and strategy execution

The author, Hoque, F. in his article Strategy execution for risk management explains about different types of business risks and how these risks effect companies. Houque, F starts off explaining strategy execution of risk management followed by the faces of risk and finally explains about risks in context. The author explains that no investment can be effective without consideration of risk and can prove potentially disastrous with inadequate business continuity planning. The outcome of inadequate business planning may result in loss of customer goodwill which effects survival of firm. Business risks may be internal to organization or environmental. Internal risks are more recurring and can be handled with a well planned business strategy. The author explains three steps involved in risk management as identifying the nature of risks, assessing the likelihood of the risks, and taking preventive action to reduce exposure of firm to risks. The author explains that from the past three decades, the focus is on controlling and managing projects and there is a need for a broader enterprise perspective than a micro project view.

The article explains how risks are classified into different categories such as systems, sourcing and strategy based on their origin. These categories may be overlapping but provide a framework populated through interactions and conversations among technology and business executives. The author explains how risk management can be handled by effectively implementing a formal risk management plan by defining roles and responsibilities at program level and project level. He further explains the role of Enterprise Program Management Office (EPMO) in managing risks at program level and how collaboration with Enterprise Risk Management (ERM) group helps better understand impact of enterprise risks on overall project.

Further in the article, the author explains about an Interview with the BTM Institute, Toby Redshaw, the CIO of insurance giant, Aviva Group where he explains how he reduces risk at project level by considering strategic needs of enterprise. He explains how these risks effect profit and loss statement and earnings per share when a poor business technology plan is implemented by not considering key business stakeholders and without consideration of strategic goals, sourcing decisions and priorities. He also explains how technology investment plays an important role in business strategy. The author concludes by saying “In today’s economy, the days of reward outweighing risk are a thing of the past”.

References:

Hoque, F. (2009, May). Strategy execution for risk management. Baseline. Retrieved from http://www.baselinemag.com/c/a/IT-Management/Strategy-Execution-for-Risk-Management-264383/