INVESTMENT FUNDS: Step 3 Identify risks by engaging all of your Teams
Fund Elements provides InFORM, an Investment Fund Operational Risk Management solution, that identifies high risk processes and makes them safe. Our objective is to help you eliminate operational errors.
Go to www.fundelements.io to find out more about InFORM's 5 Steps to make High-risk Processes safe and to sign up for a 14 Day Free Trial.
In my last blog, I talked about the four part process definition and Step 2 of InFORM which involves setting up your systems, service providers and people resources.
In this blog, I will focus on Step 3, how to engage your teams to identify risks.
Context is King, precise definition of risk by your team members is enabled by making the detail of their day to day operations accessible.
Ask yourself, is your current approach to Operational Risk wide and deep or narrow and shallow?
Is it a view from the top or are you hearing the concerns of your Operations Team members?
Functional Level
Fund Elements pre-built processes and controls are hierarchical. They provide different levels of detail at which you can engage your Operations Teams.
In my last blog, I introduced Calculate Net Asset Values as one of 12 areas of functional activity.
It is the second level of detail in the hierarchy.
The third level breaks Calculate Net Asset Value into six key processes.
The third level sets the context to allow each process objective to be broken down until all of the tasks that are performed at the operational level have been identified.
Engaging your Operations Teams at a functional level is a good starting point however the risk identification will be more time consuming and lack the precision required by Solution Experts.
Operational Level
To achieve the highest level of precision you need to engage at the Operational Level of detail. These are the tasks that are completed to run your day to day operations.
Context is King, precise definition of risks by your team members is enabled by making the detail of their day to day operations accessible.
It is also the quickest and easiest way for a team member to record a risk as the context helps to make the risk definition easier.
InFORM's approach is about finding the right context first and then adding the risk definition.
The Language of Business Analysis and Problem Solving
The language of problem definition requires clarity as you will need to pass the ball around to build consensus with your colleagues and engage with solution experts.
Let's take an example, where Calculate Settlement Value is resulting in an incorrect amount.
To record the risk, InFORM uses the Operational Risk Assessment data table that is attached to the Calculate Settlement Value process (the paper clip in the top right hand corner of the Calculate Settlement Value process definition above).
The approach is process centric and makes it easy for Operational Team Members and Solution Experts to view all of the risks associated with Calculate Settlement Value.
It creates the link between Operational Risk and Digital Transformation by using an approach that has been proven for more than 20 years.
This enables collaboration when deciding on high risk processes and building the case for automation.
Next Blog
In the next blog, Step 4 Assess and Action Plan, I will talk about how we use Elements.cloud's built in Change Management functionality, to raise change requests to make safe high-risk processes, work successfully with IT on agreeing the problem definition and assigning changes to future releases.
For more information on InFORM's functionality, the 5 Steps to Make High Risk Processes Safe and the 3 Implementation Plans options go to www.fundelements.io/inform.
