Risk ManagementErnst & Young has created a holistic, systematic and integrated way to handle business risks and opportunities. The purpose is to make the compa-nies better prepared and more effective in handling the uncertainties which are related to execution of the company’s business strategies.

Ernst & Young has found that QualiWare Lifecycle Manager is the best tool to integrate risk assess-ment and risk handling into a company’s key pro-cesses in such a way that a new platform for im-provement of the processes and added value is created.

Risk HeatMap with Inherent and Residual information

To-day there is more focus than ever on corpo-rate governance, risk management and ethics.

The rapid globalization and the increased com-plexity in the business environment also means that the demand for risk management effects a much bigger number of businesses than is was the case just a few years ago.

The demand for risk management can also have personal implications – the chairman of the board, the president, or the auditors of a com-pany can in certain situations be held personally responsible according to the Sarbanes-Oxley codex, which applies to US-listed companies.

With Risk Management Ernst & Young has cre-ated a universe which not only encompasses incidents which influence the realization of the company goals in a negative way. The model also looks at the probability of an incident and how the incident can have a positive effect in creating new business.

RM identifies risks as well as new business opportunities

Ernst & Young wanted to create a Risk Management model that allows companies to combine their work with risk assessment and risk management with profit generating activities or competitive advantages such as process im-provements and increased customer service.

Implementation of risk management can create the platform for other activities, such as: • a clear common understanding and aware-

ness within the organization of the compa-ny’s management and evaluation of risks,

• better decision making is achieved through a common understanding of risk levels and ongoing monitoring of risks across business units

• Improved processes for systematic identifi-cation and evaluation of risks as well as ex-ploitation of new business opportunities

• Improved internal controls in all processes • Improvement of corporate governance via

better risk management and reporting pro-cesses

• Prudent documentation of the company’s risk management activities.

How to start with risk management

There are a number of basic questions which are good to answer up front, when the management of a company considers employing a risk man-agement strategy:

Have the management clearly defined what risks the company wants to take on - the risk appetite.

Do we know the major risks and have they been prioritized in relation to their probability and potential impact on the execution of the com-pany’s business goals?

Control Coverage specification Cost of Control Coverage

Do we have sufficient handling of risks – e.g. are ownerships, controls, reporting etc. in place and do we have a suitable risk management strategy?

How efficient is the risk management, do we have overlaps or gaps between the different lines of businesses? How robust is our risk management infrastruc-ture. Do we have sufficient politics, procedures, training, etc. to adapt to and handle a changed risk environment?

QualiWare Lifecycle Manager – the right choice for RM

When a company initiates the work on Risk Management it is not limited to the financial aspects in the Sarbanes-Oxley codex only. It is important to see the major risks as an integrated part of the company’s business processes.

This is the background for the close co-operation between Ernst & Young and QualiWare. QualiWare has since 1991 a leading position in development of IT-tools for use in process development and improvement. Ernst & Young has found that QualiWare Lifecycle Manager has the best fa-cilities to support RM, e.g.:

• A common methodology for graphic visu-alization and description of processes,

• Communication with the company’s employ-ees via intranet and Internet,

• Flexibility to produce versions across busi-ness units and boarders

• All data stored in one common repository, so that changes only need to be made in one place

• Management of history and versions.

Residual risk calculated Risk scoring

Specification of Risk HeatMap

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Founded in 1991, QualiWare is a company whose modeling solutions are used all over the world. Our comprehensive modeling and management products and services provide the marketplace with solutions focusing on enhancing efficiency, effectiveness, productivity, competitive positioning, and organizational profitability. Everyone in an organization can benefit from the use of QualiWare solutions and the business models that are managed within and published by our solutions. QualiWare has offices and distributorships in Australia, Brazil, Canada, Denmark, Great Britain, Netherlands, Norway, South Africa, Spain, Sweden, South Korea, Ukraine, United Arab Emirates and United States.

QualiWare’s clients include large and medium-sized enterprises; both public and private. Among these are: ATP (Denmark’s largest administrator of pensions & labor agreements), Kopenhagen Fur, DONG Energy, the Danish Broadcasting Corporation, Foss, Statoil, Borealis, The Capital Region of Denmark, Hydro Aluminium, INOVYN, IBM Corporation, IFS (Industrial and Financial Systems), LM Glasfiber, Danish Medicines Agency, Danish National Board of Health, Nokia Denmark, ENGIE E&P Norge, Aibel, EDB Business Partner, DNB (Norway’s largest financial services group), PFA Pensions, The Swedish Post, Aker Solutions, Sauer-Danfoss, SOS International, Sund & Bælt Holding, Schenker, Danish National Rail Authority, Nycomed, The Municipalities of Denmark, Hifab, PMC Technology, the Greater Toronto Airports Authority (GTAA), Blue Cross Life Insurance of Canada, and Oceaneering.