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CURRENT OVERALL ERM DEVELOPMENT

After the city auditor's report in 2005, Edmonton adopted a 30-year vision and six 10-year goals, forming the City of Edmonton Strategic Plan, The Way Ahead. From it were derived six "Ways" plans (directional goals, objectives, performance measures, and targets) in support of The Way Ahead:

Transform Edmonton's Urban Form The Way We Grow

Shift Edmonton's Transportation Mode The Way We Move

Improve Edmonton's Livability The Way We Live

Preserve and Sustain Edmonton's Environment The Way We Green

Ensure Edmonton's Financial Sustainability The Way We Finance

Diversify Edmonton's Economy The Way We Prosper

At the time of writing, all the directional plans have been approved by City Council, except for The Way We Finance.

A summary of The Way Ahead and the six "Ways" plans derived from it can be found in the Appendix at the end of this chapter.

LINKS TO STRATEGIC PLAN AND TO OTHER STRATEGIC TOOLS

When developing ERM strategy, the following five questions are asked:

1. What are our long-term vision and goals?

2. What strategy will help achieve the vision?

3. What objectives will achieve the strategy?

4. What performance measures will show whether the objectives are achieved?

5. What risks will interfere with achievement of the objectives?

Both performance measurement (PM) and ERM need to be considered when advancing the strategic objectives. Recognizing this, the Office of the Chief Financial Officer realigned its Corporate Strategy and Performance section so that the ERM Program Manager, strategy, and PM staff work together in the same section. This provides possible opportunities to combine the processes of ERM, strategy, and PM to gather information for each more efficiently.

Results-Based Budgeting

ERM assists in resource allocation decisions (as shown in Exhibit 15.1) and so was seen to possibly conflict with budgeting models, including a results-based

Relationship between ERM, Performance Measurement, and Results-Based Budgeting

Exhibit 15.1 Relationship between ERM, Performance Measurement, and Results-Based Budgeting

budgeting (RBB) model concurrently piloted by the Administration. The two models can be reconciled, however. For instance, one of the criteria in the RBB model for evaluating city programs was the amount and likelihood of risk relative to the amount of benefit the program was deemed to provide. Conversely, a program's quartile rating in RBB could be used as an indicator in the ERM model to determine a program's effectiveness in achieving its desired outcome. In this way, both models could inform each other.

Capital Budgeting Models

Edmonton's infrastructure branches use sophisticated risk management models for maintaining and replacing current capital assets, and are introducing risk assessment into business cases for new capital projects. The strategic ERM model needs to incorporate these projects at the strategic level.

A graphic showing the linkages between ERM, Performance Measurement, and Results-Based Budgeting is shown in Exhibit 15.1.

 
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