Why Are ERP Systems Important?

Following are 10 tips for successfully selecting and implementing an ERP system.
1. Choose the right product – the right balance of flexibility, reliability, functionality,
focus (on your specific industry) of pre-designed processes – is essential if the
team is to have any chance of delivering against the business case. This means
having the right selection process and going beyond “tick box” analysis.
2. Choose the right implementation partner. There are many roles to fulfill within the
project requiring different skill levels and understanding. It is often better to have a
mix of skills, experience and rates to match to the level and complexity of each
deliverable. You need to look realistically at the support you need, technical,
application, business, change, process – most companies will need partners in
more than one area. Note that the right partner might be someone other than the
ERP vendor.
3. Be ruthlessly commercial about your selection, negotiation and contracts.
Commercials are far more important here than the finite legal position (which will
almost certainly be that any liability on the vendor will be dependent upon you
proving that you did everything you were expected to do – which believe me is
more difficult than it sounds). The more you can document in terms of risk
mitigation and shared liability for project over-runs the better the working
relationship.
4. Vendor management is key – while vendors are your partner in the project, you
should never forget they have their own drivers, wants and needs. You will both
want a “successful” project but their definition of success will be very different to
yours.

5. Aim for the right goals – make sure you have a vision for where the system will be
after the initial phase, after two years and after five years. Be realistic about how
much you can implement at the outset and how much change your organization
can take before it breaks. Buy for the future state, while bearing in mind you will
never get the same discount on any software modules.
6. Use a third party to help with selection, planning, progress management, change
management and dispute resolution. Most people only do one or two ERP
implementations in their career – spending money with people who have
completed dozens or hundreds is always worthwhile.
7. If you have an ERP project that is off track, get the project reviewed and take
advice as early as possible – the faster you understand where you are and how to
get control, the more likely it is you will turn the situation around.
8. Use a tool to manage information, project milestones, budgets, resource allocation
and time/materials bookings. You need to know exactly where you are in the
project and how much time and money you have spent to date in order to predict
the cost and timeline of the entire project.
9. Review and update the business case regularly – as you move through the project
you will find items that will boost your ROI, and you will find items that will increase
your costs. Being up-to-speed with this situation will help if you need to negotiate
with the CFO regarding re-shaping the budget.
10. Maintain constant senior management involvement. Support goes beyond what
you say. As mentioned earlier, this project will affect every part of your
organization. The risks in getting it wrong are immense and cost of losing control is
hugely punitive.

Lombard Risk Management Launches Compliance Assessor

As a consequence of the financial crisis firms, more than ever, are faced with a plethora of regulations as governments seek to regulate as a means of protecting individual economies.   As a result, a considerable amount of management time is spent in trying to keep up with the pace of regulatory change and addressing regulatory demands, whilst having less and less certainty about the level of enterprise or departmental compliance. Regulatory risk, being the risk of non-compliance and the repercussions that may follow, is now a major challenge and of serious concern for institutions.

In conjunction with the launch of Compliance ASSESSOR TM, Lombard Risk is delighted to announce the appointment of David Wilford as Director of Compliance Products.  David has over 35 years’ experience, primarily in the areas of risk management and regulation, and will head up the dedicated Compliance ASSESSOR TM team as its product director.  Over the last 10 years David has been involved in the interpretation and implementation of the Basel II/III Accord as reflected in the EU CRD and subsequently the FSA Prudential Sourcebooks.  He has also been advising banks on the adequacy of their risk governance frameworks to address these and other regulatory requirements and implementation issues.

John Wisbey, CEO, Lombard Risk commented: “Our clients look to us for solutions to all their regulatory needs and an increasingly important part of that is to ensure that their firm as a whole is meeting, and/or working towards meeting, all aspects of compliance.   Compliance ASSESSOR TM has been designed to show senior management how a firm complies and continues to comply with regulations.  It addresses the new approach to supervision by providing a means of assessing the state of compliance with all applicable regulations at business unit and regulation level – irrespective of jurisdiction – and addressing deficiencies through appropriate action plans.

More importantly, dashboards and reports enable senior management to identify deficiencies in compliance anywhere within their organisation and take appropriate action, a valuable tool given the regulators’ intention to make executives collectively and individually responsible for non-compliance.”

David Wilford adds: “With governments seeking to impose further regulations as a means of stabilising and protecting economies, and the regulators taking a more intrusive approach to supervision, it is clear that many compliance and audit functions will come under enormous pressure, possibly to breaking point, without investment in resources and appropriate applications.”

Risk Management Financial Crisis

Finance and risk go hand in hand, however many finance institutions were unaware of risks and risk management hence the financial crisis…

In part, this is because of the failure of previous risk management projects to deal adequately with the challenges that the financial sector faced. After each crash, the financial sector has attempted to improve its risk management, often spending large sums of money, only to find itself caught unawares yet again in the next crash.

Many financial institutions have been disillusioned by the failure of major projects to achieve their goals or to reduce risk. As a result, firms are wary of projects that promise to transform risk management and may even become convinced that they can do little to improve risk management over the long term. Instead, regulation has taken center stage and plans are based around introducing tactical, compliance-focused risk management solutions.

While these short-term tactical actions are necessary, they need to be taken in the context of a long-term strategy for solving the problems around risk management. Identifying these problems is easier said than done. Financial institutions face myriad challenges in today’s environment, making it more difficult to understand what solutions and technologies should be employed to solve these problems.

To understand the problems that firms are facing and to track developments in the risk technology market, Misys commissioned Chartis Research to carry out a survey of risk professionals on the subject of their aims for enterprise risk management and the obstacles that they face. The survey and analysis was carried out independently by Chartis Research.

The key findings of the survey show:
• Almost half of firms surveyed did not have a well-formulated enterprise risk management program, one that gives them a clear view of all risks across their organization and allows them to manage
these risks in a flexible, collaborative way
• Regulation, especially Basel 3, is a major driver for change, but firms also believe there is currently too much emphasis on regulatory compliance and not enough on improving risk management.
Regulations are forcing firms to deal with the symptoms of crashes, rather than the root causes, which can only be solved by better risk management
• Firms want to do more to embed risk throughout the firm to enable collaborative risk management – respondents want more accountability in the front office for risk, more use of risk information in the
front office, and increased use of risk-adjusted performance measures.

The results show that firms are moving from centrally controlled, top-down risk management towards collaborative risk management based on encouraging all areas of the bank to take responsibility for risk management. This report examines these results and explores how firms can implement collaborative risk management.

Risk Management Courses

Risk management is a broad category that covers ground on risk analysis and dealing with it. This is the process of identifying and narrowing down potential risk. These are the coherent uncertainties that an organization may face. These risks are classified into categories through risk analysis and then there are mechanisms put in place to counter the implications. The mechanisms can either be to transfer the potential risk, minimize or reduce it and generally avoid the risk if it has negative consequences. Alternatively risk management may focus on maximizing the risk or retaining the risks if the outcome is positive. Therefore risk management courses delve into the whole process of identifying, analyzing and applying the aforementioned risk treatment techniques to effectively deal with it. The method used can be a single approach or a combination of methods. These courses do not focus on a single sector but are wide spread as risk is common in all sectors.

What the courses related to managing risk entails follows a particular procedure. First is to understand the principles and practices of risk management. Then follows the key aspect of risk identification. This involves the elaborate procedure of finding out factors that can affect the organization. There are a number of methods to use, each unique to a particular industry. The basic one is establishing the source of risk through source analysis which systematically leads to the problem analysis. Then there are other approaches based on the object of risk and the futurists approach to identification of risk. The techniques can be applied on a set of past data, intelligent expert advice and opinions that have a basis. This method usually involves identifying the risk and finding the cause of the risk.

After the first step of risk identification comes the process of risk assessment. This is a critical analysis of what the particular risk entails in terms of consequences. In this sections calculations are done to determine the rate at which the risk will affect the firm. The level of occurrence and probability of if it happening is also calculated. Then based on these calculations and statistical inference the level of risk can be determined. This aids in prioritizing of different risks inherently affecting a firm. These can be categorized as low, high or extremely high risk. Then learners at this point on can effectively create a risk profile based on all the data collected and findings.

Once the risk profile has been established comes the process of risk evaluation. The parameters put in place to classify the risks are used to evaluate the level of risk. Then using these levels certain treatments are put in place to deal with the risk. The index created avails a set of options to treat the risk. These treatments basically cover avoiding the risk, retaining the risk, reducing and minimizing the risk, the risk can be maximized, factors affecting the rate can be altered and alternatively the risk can be shared. All these factors are adequately addressed in risk management courses. After this is done comes the implementation process. This is where the policy decided upon takes effect.

The last process of risk management is the process of monitoring and review. This entails following up on the guidelines and treatments that have been put in place. These policies are targeted at effectively managing the risk and protecting the interests of the firm. The measures taken are monitored on whether they are working properly. Then the review process analyzes the measures put in place and alterations may be made to make the measures more reliable.

The international organization of standardization has put in place guidelines on risk management. This is to ensure a uniform approach in dealing with risk one ISO that deals with this matter is ISO 31000. it effectively deals with any type of risk covered in any field. Risk management can be used by an individual, group, entity, business, organizations, health providers, the education sector basically every spectrum of the modern day world.

The most reputable institutions in risk management courses in no apparent order include : Illinois state university, university of Georgia, university of Texas, university of Pennsylvania, Ohio state university and London business school. These institutions are accredited and are renowned for producing top notch risk managers.