Operational risk management with real-time business intelligence

• Published in: BT technology journal Vol. 25; no. 1; pp. 154 - 167
• Main Authors: Azvine, B., Cui, Z., Majeed, B., Spott, M.
• Format: Journal Article
• Language: English
• Published: Ipswich British Telecommunications PLC 01.01.2007
• Subjects: Business intelligence; Business metrics; Objectives; Performance management; Real time; Risk management; Studies; Success factors; Systems design
• ISSN: 1358-3948; 1573-1995
• DOI: 10.1007/s10550-007-0017-5

Operational risk is a function of the complexity of the business and the environment that the business operates in. Such complexities increase as the business or the environment become more dynamic, i.e. where change is a permanent feature and a factor to build into the management of the business. The key question that arises is how do businesses respond to such changes today and, if the nature of the business and the environment is becoming more and more dynamic, what actions can businesses take to predict and prepare for change. Viewed in this manner, operational risk becomes very closely related to the operational performance of the enterprise because it can be considered as dealing with changes that have a negative impact on the operational objectives. It is essential to have a system for establishing the status of a business at any moment in time in relation to its performance objectives. This is the role of real-time business intelligence, without which operational risk management could be out of date, or in some cases out of synchronisation with the business cycle, with serious consequences. This paper discusses the cornerstones of RTBI and demonstrates how these are also essential elements of an effective operational risk management framework.