At present within most organisations, decisions relating to control of risks are often made on the basis of intuition. The reason why organisations fail to adopt a more rigorous approach is mainly down to the way in which risks are perceived. As a result of perception often being subjective, the true level of exposure to the organisation may not be appreciated. In addition, organisations often believe that the effort required for a more rigorous evaluation is not merited by the benefits.

We at IIRSM believe that a more consistent and robust approach needs to be made. To help achieve this, IIRSM in collaboration with Manchester Business School (MBS) and a leading IT development partner, Cardinus, have been involved in a Risk Management project which aims at developing an Enterprise Risk Management (ERM) based online Decision Support Tool (DST) which will allow data on risk-based incidents to be input, stored, and subsequently analysed to provide better decision-making information. The analysis will demonstrate future trends using techniques such as moving average or logarithmic trends and will utilise the techniques employed in quality management to produce control charts which will identify whether a failure of control is a random event or evidence of a systemic issue.

We also believe that the tool will provide organisations with a more objective basis on which they can base their strategies. For instance, using one of the applications within DST (i.e. control charts), it may be possible for organisations to decide whether a particular type of incident is a result of the randomness associated with the event or a failure in the associated risk management system. Similarly, the analysis capabilities offered by the tool should be able to indicate to the decision makers whether the trend will improve or deteriorate and if so allow them to initiate additional measures to control the underlying threat.

IIRSM in partnership with Cardinus is currently in the final stages of designing the Decision Support Tool (DST) which we believe will provide Risk Management solutions and will help risk management practitioners to have a better understanding of risks; this in turn benefits decision-making.

Please stay tuned for more details in future blog posts!

Dr Shahzeb Malik, Technical and Research Manager, IIRSM