Project management was one of the pilot exercises for ERM within MECO. Risk management was introduced as a requirement for projects within the team, and Activity Risk Holder (ARH) was purchased as a result. ARH is a risk management software tool that allows risks and actions to be captured across an organization and projects.
Risks have been identified and assessed across a large number of projects over the past couple of years, and extensive documentation has been developed to support the process. This has mainly been built, developed, and managed by one project risk manager. This manager has worked hard to build a substantial database of risks that the organization can use as lessons learned for future projects, as well as a decision making support function for project and investment decisions. Unfortunately, due to key elements not being in place, the risk management drive has been lost and the process has essentially been reduced to nothing.
The failures have come as a result of:
• Lack of active management support
• Lack of resourcing
• Lack of corporate Risk Framework that allows key project risks to be escalated
• Lack of key performance indicators (KPIs), risk appetite, or tolerances set at corporate levels
Finance risk management involves risk financing. Currently, the department identifies risks and assets of an insurable nature and makes sure that all insurances are in place. They have a captive insurance company and manage limits and exposures. There is a desire to be more aligned to an overarching ERM process in which to identify further insurable risks as well as provide support for risk financing needs of the company. The key challenge to making the risk management function more effectively is that there is no risk appetite or tolerance set at a corporate level.