When the Basel II Accord becomes active operational risk management will become an integral part of compliance (Figure1); Failure to measure operational risk and clearly demonstrate the ORM structure will adversely impact bottom-line profitability and shareholder value. It is therefore critical, when designing any ORM solution, to consider the impact of including this information in the wider Basel II Accord framework. The cost of information management is not only in the original design and build of the solution, but in its future development and maintenance as requirements change.

A major issue for many organisations and one that is at the heart of implementing an effective ORM solution, is the need to have the right approach to information management. The collection, integration and dissemination of information throughout an organisation is critical to success and the cost of failure can greatly exceed the cost of implementation. As is often the case, the opportunity for competitive differentiation in the area of operational risk lies not in systems and IT toolsets, which competitors can easily replicate, but how these systems integrate with the organisation’s information management and business strategy.

The Acuma Approach
Acuma’s approach to ORM considers both the business framework (e.g. the wider implications of the Basel II Accord), and its integration with the information management strategy and approach of the organisation. Considering both the short term and long-term perspectives, effective ORM solutions must scale, be sustainable, and provide ongoing value by balancing the organisation’s appetite for risk with the reporting requirements as set by the local regulatory bodies.

As the UK’s leading specialist information management solution provider, and having delivered over the previous 10 years many hundreds of solutions for FTSE 100 organisations and smaller companies Acuma can provide both leadership and delivery capabilities with our acuma approach.

acuma draws together years of experience in both demand and supply side information management. Through having this complete holistic capability and in the context of delivering ORM this enables us to help in protecting your investment by providing solutions which integrate both the front-end window for the information (demand) and the production of the right data at the right time and of the right quality (supply side) wherever it sits within the organisation. Both components must be delivered in a unified way and must understand the constraints of each other; failure to do this will set the wrong expectations and cause future implementation failure. Excellent reporting look and feel with poor or incorrect data, at the wrong time will fail to meet regulatory, business and shareholder requirements.

The Acuma Solution
Figure 2 shows a sample set of dependencies required for ORM. In this instance the internal data would be distributed throughout many different business units and locations within the organisation, held in a variety of formats using a multitude of databases and operating environments. Once the initial issue of location is resolved the data structure and continuity from the various source systems needs to be mapped to the reporting framework. When completed this information is then available for organisational reporting including the specific ORM analytics relevant to your style of business and risk appetite. This style, i.e: Advanced Measurement Approach (AMA) will obviously introduce a complete new set of data and complexity that needs to be structured and maintained.

Securing this data, as described, is the first step towards achieving ORM. In line with this the ‘information window' needs to be designed with the business profiles and client types in mind so that access and usage becomes the norm. If the system is too complicated it will not be used. Delivering corporate intelligence involves efficient deployment of integrated reporting, modelling and information distribution to ensure that the right information is available to the right people, at the right time and in the right format. Our approach starts small, considers the long-term vision, and delivers value incrementally.

For example a compliance officer may need a greater level of granularity and drill down capability across the group than a business executive, who will require only to search within his area of the business. It is through this interface that the power of the system will be released. Technology by itself is not the answer, underpinning the solution delivery is the need to ensure that the organisations we work with can sustain the momentum and maximise the return from their information investment. Acuma can draw together the complete solution components and deliver to either a business or technical community using scheduled classroom courses or tailor made programs that can be run from our training centres or at the client’s site. Acuma’s experience in delivering key strategic projects, means that using our proven consultancy and services methodology we can work with you to create an ORM environment suited to your business solution environment that will protect your investment, keep the appropriate level of focus and security for future development and reduce your reliance on single source IT vendors.