1. Copyright © 2009 PMI RiskSIG

2. Creating Value through Enterprise Risk Management
Val Jonas
CEO, Risk Decisions Group
Oxford, UK
Canberra, Australia
Copyright © 2009 PMI RiskSIG

3. Copyright © 2009 PMI RiskSIG
Agenda for ERM
Carefully crafted risk framework
Process, practice, tools and techniques
Maturity, capability, best practice
Culture, behaviours, continuous improvement
Summary
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4. Carefully crafted Risk Framework
Part 1
Carefully crafted Risk Framework

5. Copyright © 2009 PMI RiskSIG
Perspectives on risk
Everyone has a different perspective
Projects, programmes, supply chain
Operations, functions, business units
Managers, board of directors
Customers, funders, shareholders
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6. Project Risk Perspective
COST
(Budgets)
SCHEDULE
(NPV)
Deliverables
(hard targets)
QUALITY
(Constraints
& Assumptions)
Well defined processes for managing projects
Budgetary authority
Risk “value added”
- Fulfill expectations
- Customer satisfaction
(no unpleasant surprises)

7. Programme/Operational Risk Perspective
COMMUNICATION
(Targets, thresholds,
escalation / delegation,
reporting)
FUNCTIONAL
ENGAGEMENT
(Common themes)
Benefits
(soft targets)
PERFORMANCE
(Objectives, Scope &
Profitability)
Risk “value added”
- Winning new business
- Functional efficiencies
(competitive edge)

8. Corporate Risk Perspective
Shareholder /
 stakeholder
Value
INVESTMENT & FUNDING
(Return on Investment, Value for money)
MARKET PERCEPTION
(Share price,
audit report)
GOVERNANCE & ASSURANCE
(Risk, Controls
& Compliance)
Organisation – leadership (structure), managing stakholder expectations, resourcing & competencies
Performance – Agreeing objectives, setting & measuring targets
Governance – Turnbull, SOX, COSO (Treadway), Basel II, audit & financial reporting.
Risk “value added”
- Enhanced reputation
- Improved ratings
(increased company value)

9. Roles and responsibilities
Framework defines roles and responsibilities (board level sponsor)
Chief Risk Officer responsible for overseeing risk management activity throughout the company
Risk Management is everyone’s responsibility
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10. Copyright © 2009 PMI RiskSIG
Risk Appetite
Amount of risk (and corresponding reward) each project, business unit, division is willing to take
Approved at each level up to the board
Defined thresholds and triggers
Risk Management Reserve (contingency) set and measured against
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11. Process, tools and techniques
Part 2
Process, tools and techniques

12. Risk process Establish context and risk appetite Identify risk events
Plan and implement response actions
Set and use management reserves
Management reporting
Same process for corporate, programme, operational and project risks
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13. ERM Guidance OGC, Management of Risk COSO, ERM integrated framework
AS/NZ:4360, Risk Management
(New ISO Standard)
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14. Recognise individual needs
Multiple processes implemented through configuration:
Terminology (labels & visibility)
Statuses
Response types
Categories
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15. Copyright © 2009 PMI RiskSIG
Enterprise scoring
Automatic recalibration
for review and reporting
at different levels
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16. Risk Reporting Well defined processes for managing projects
Budgetary authority

17. Maturity, capability, best practice
Part 3
Maturity, capability, best practice

18. Overall Maturity Level
Risk Maturity
Managed
Repeatable
Overall Maturity Level
Initial
Ad Hoc
Identify
Analyse
Treat
Culture
Context
Evaluate
Monitor/review
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19. Looking back and ahead
Risk Management looks into the future to identify potential threats and opportunities
Now
Progress
Benefits
Risks ?
Lessons learned
Well defined processes for managing projects
Budgetary authority
Take appropriate action, before it is too late to influence the outcome

20. Culture, behaviours, continuous improvement
Part 4
Culture, behaviours, continuous improvement

21. Integrated Risk Management
Executive Board
Information
Guidance
Programme
Functions
Operations
Projects
Support Groups
Logistics
Prime contractors
Contractors / Supply chain
Sub-contractors / Supply chain
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22. Copyright © 2009 PMI RiskSIG
The Journey
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23. Summary

24. Where’s the value in Enterprise Risk Management?
Project
Improved performance
Customer satisfaction
Program & Operations
Winning successful business
Functional efficiencies
Corporate
Funding & investment, market confidence (share price), performance rating (audit)
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