|Operational Risk Management|
Identifying potential adverse events is a difficult exercise. There is always a tendency to do scenario assessments. The limitation of this approach is that it is dependent on the past experience and imagination of those involved. This approach does not ensure that the full scope of potential adverse events have been identified.
Risk Identification and Assessment
All businesses exist in an uncertain world. At any time events may take place that impair or impede business operations or incur unexpected cost. Businesses attempt to reduce uncertainty by forecasting, planning and budgeting. But the unexpected will always intervene in ways trivial or potentially disastrous for the future wellbeing of the enterprise.
INTENT uses a methodology that gives confidence that the spectrum of potential adverse events has been scanned so that those with the highest likelihood of occurrence and the greatest potential impact can be identified for ongoing management review, mitigation action and contingency planning.
Assessment of likelihood and impact allows the differentiation between trivial meaningful risks and facilitates ranking of risks such that the greatest risks get the earliest attention.
Risk Mitigation and Contingency Planning
The mitigation of risk requires short term action to reduce the likelihood of an event and/or reduce the potential impact/cost. Contingency planning answers the question “What is to be done if the risk eventuates?”
Managing risk is not a one off activity. Dealing with uncertainty is a continuing management concern. Ensuring that there is consistent compliance with risk mitigation strategies and that contingency plans are current, complete and appropriate, requires periodic review; a process built into the business performance management.
Operational Due Diligence
Potential purchasers of any business need to satisfy themselves that they understand fully the implications of their purchase. When the vendors are satisfied that the potential purchasers have a genuine interest in the purchase they will generally open the doors and the books to a “Due Diligence” review. All aspects of the target business should normally be available for inspection and investigation.
The range of skills required for this review are broad, and include the specialist expertise of lawyers and accountants who can assess the legal and financial position of the target business. Different skill sets are required to examine the physical operations of the business.
The depth of experience of INTENT’s people, particularly in the manufacturing industries, equips them with the skill and knowledge to assess the capability and deployment of the target business’s managers and employees, as well as the status and utilization of assets and inventory. INTENT is able to provide scope specific Operational Due Diligence reviews.