It is targeted at managing any factor that represents a threat to a company attaining its strategic objectives. The ultimate desired outcome is to reduce the variability in the organization’s process execution and thus produce more predictable financial and operational results.
An ERM initiative enabled by improved management system execution will increase risk mitigation effectiveness, reduce process variability, and help ensure that a company’s strategic objectives can be accomplished.
Companies that have deployed a mature list of management system elements will yield greater returns and accomplish more of their objectives by integrating those management systems with a common set of risk mitigation processes and tools.
The key to successful execution of an ERM continuous improvement initiative is to establish a common platform for mitigating the risk exposures that are discovered from both reactive (incident-based) and proactive (assessment-based) work processes. By integrating information from these typically disparate processes, leaders have greater awareness of and improved responsiveness to resolving the management system weaknesses that expose their enterprise to risk of operational failure, compliance issues and the other costly consequences of un-mitigated risks.
Typically, operational management systems cross multiple disciplines. In most cases, these management systems have been established and implemented as stand alone programs. Often companies are in a position of maintaining and executing several management systems using redundant operational, administrative and technical resources.