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The Decision Factor offers insightful comments and observations on analytics—from views on new technology approaches and market dynamics to the latest industry trends driving demand for faster, smarter information analysis. This blog contains personal views, thoughts, and opinions from SAP employees, mentors, and friends working in the area of analytics. It’s not endorsed by SAP nor does it constitute an official communication of SAP.

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Key Risk Indicators in a Sound Risk Management Process: What Are They Really?

Misunderstanding Risk and Controls

For many people, risk management helps companies make sure that their compliance risks are monitored and that they have controls in place to take care of them.

Personally, I strongly believe that risk management is much more than that – it helps companies really steer their business, avoid roadblocks, seize opportunities, and react appropriately.

Key Risk Indicators (KRIs) are indicators of the possibility of a future adverse impact on the organization. They serve as an early warning system to the stakeholders and enable preventive action to be taken directly on the risks and opportunities flagged.

In that sense, they …

Myths in Risk Management — You Don’t Need to Start with a Risk

Myths in Risk Management -- You Don't Need to Start with a Risk

Recently I was perusing a relatively unknown corner of ISO 31000 Risk Management —Principles and Guidelines— and long dormant memories flooded back.

The ISO section I was reading, Monitoring and Review (s 5.6), deals with the sorts of metrics that should be monitored to ensure the risk management system’s working. For example, it suggests monitoring indicators of control effectiveness, incidents (near misses), issues, key risk indicators, loss events, and other relevant variables important to the risk management process.

Years ago, I was appointed manager of accounting for what was then a mid-sized oil and gas company with operations …