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GRC 10.0 - Risk Managementfor Mining and MetalPaul Petraschk, SAPSeptember 2012

The Risk Management process starts always with knowingyour businessYour business? 2012 SAP AG. All rights reserved.2

Do You Really Know Your Business?What risks currently impactyour ability to perform?What is the actual status ofyour planned responses?Do some of your activitiesor projects deliver anyindications for higher risks?What will be the overallimpact if multiple risksoccur and how will theyinfluence each other? 2012 SAP AG. All rights reserved.3

Top 5 Requirements12345Holistic overview about the overall risk situation into alloperationsProactively identify and control risks to reduce likelihood andimpactFast and easy way to involve the operational business asknowledge key persons into risk assessmentsEasily maintained risk structure to fulfill the requirements ofcorporate reporting and operational risk managementClear defined accountabilities and responsibilities for risks andresponses 2012 SAP AG. All rights reserved.4

Risk Management OverviewDescription:Reporting and analytic capabilities are essential for management in order to obtain a real time overview of businesscritical risk information.The overview introduces these important features along the Risk Management process which are implemented withSAP GRC Risk ManagementRisk Management ProcessRisk PlanningRisk IdentificationRisk Analysis Strategic Objective Setting Identify risks and Analyse risk usingopportunitiesquantitative or qualitative Align strategic objectivesmethodsto organizational entities Identify risk drivers andimpacts (condition and Document risk Define risk classificationconsequences)relationships(types) Assign Key Risk Indicators Built risk scenarios and Define risk relevant(KRIs – out of scope forand determine riskbusiness activitiespilot)exposure Perform Monte Carlosimulations Prioritize risks based onrisk levelDefine the risk structurefor corporate reportingand operational riskmanagement 2012 SAP AG. All rights reserved.Proactively identificationof risksInvolve operationalbusiness as knowledgekey personsRisk ResponseRisk Monitoring Document preventiveresponses for risks Analyze company’s risksituation Assign responseownership and actions Monitor Key RiskIndicators (KRIs) Perform controlassessments and tests Monitor responseeffectiveness andcompleteness Plan re-assessments andapproval cycles Update risk exposure forstrategic objectives andrisksHolistic overview aboutoverall risk and incident Document occurredsituationincidents and lossesClear definedaccountabilities andresponsibilities for takingactionsHolistic overview aboutoverall risk and incidentsituation5

Risk Planning – Define Risk Management FrameworkGroupRisk PlanningRiskIdentificationRisk Analysis1. Establish Risk Management Goals Define Risk Management ProcessStructure and views Align organizational goals and strategicobjectives Identify risk management process usersEMEAAPJAMERICANorthSouth2. Develop Risk Taxonomy Identify risk activities and businessprocesses Define hierarchal risk classifications Document risk templatesRisk ResponseRiskMonitoring3. Document Risk Criteria Document risk appetite Document risk thresholds Define user roles and authorizations 2012 SAP AG. All rights reserved.6

Risk Identification – Detect operational risksRisk PlanningRiskIdentificationRisk Analysis1. Collect new Risks Propose new risks with only view clicks Report incidents Receive alerts if key risk indicators hitdefined thresholds2. Increase visibility of Risks Use incidents for risk detection Document known risks1Board risks10Documented risks30Known risks100Unknown risks600(Near) incidentsRisk Response3. Improve effective learning process Connect organizations, people, systems and applications Involve all employeesRiskMonitoring 2012 SAP AG. All rights reserved.7

Risk Analysis – Single and collaborative AnalysisRisk PlanningRiskIdentificationRisk Analysis1. Analyze Risks Assess risks with quantitative, qualitative orscore based Methods Perform single or collaborative risk analysis Collect data for risk analysis in the SAP GRCapplication or offline via Adobe InteractiveForms Schedule risk assessments via workflow Receive alerts if key risk indicators hitdefined thresholdsCollaborative Risk AssessmentRisk ResponseDetermine risksin scopeRiskMonitoringTriggerworkflow torecipientMonitorCollaborativeRisk AssessmentSteps performed by Risk Management 2012 SAP AG. All rights reserved.CollaborativeAssessmentRecipient 1CollaborativeAssessmentRecipient laborativeAssessmentRecipient Steps performed by workflow Recipient8

Risk Response – clear defined status and responsibilitiesRisk PlanningRiskIdentificationRisk AnalysisRisk ResponseRiskMonitoring1. Aggregate Risks View aggregated risks by risk classification, activities and business processes Identify risk dependencies2. Scenario (what-if and Monte Carlo) Analysis Create business scenarios and run simulations to visualize impacts and totalloss for different probabilities3. Assign Responses andControls Document responses andownership Assign Controls fromInternal Control System Define Effectiveness andCompleteness Monitor response planprogress 2012 SAP AG. All rights reserved.9

Risk Monitoring – Report on overall risk statusRisk PlanningRiskIdentification1. Flexible Reporting Interactive Dashboards like Risk Heatmap which easily allows to filter and drilldown into risks details as required Add customized static Reports in Crystal Reports and provide Reports forCorporate Level, Management Level and Operational Level Integrate Risk Management data into BI Reports Analyze companies risk situation and monitor mitigation statusRisk AnalysisRisk ResponseRiskMonitoring 2012 SAP AG. All rights reserved.10

Risk Management CycleThe Risk Management Process is not ending with Monitoring. It is more like a continuous RiskManagement Cycle. Enhanced requirements for Monitoring and Reporting as well as organizationalchanges lead to changes in Risk Structure, Organizational and Activity Hierarchy. These are addresses inrisk planning phase where the Risk Management Cycle starts from the beginning.RiskRisk PlanningPlanningRisk IdentificationRisk Monitoring Risk MonitoringRisk IdentificationRisk AnalysisRisk ResponseRisk Response 2012 SAP AG. All rights reserved.Risk Analysis11

DemonstrationOperational Risk Management Overview

Proactively Balance Risk and OpportunitySAP GRC Risk ManagementMANAGE BETTER 2012 SAP AG. All rights reserved.PROTECT BETTERPERFORM BETTER13

Proactively Balance Risk and OpportunitySAP GRC Risk ManagementMANAGE BETTERPROTECT BETTERPERFORM BETTERAutomate manual tasksAutomate monitoringAlign with strategy and planningEmploy best practicesReal-time analysisEmbed analyticsReduce effort and costIndustry-specific solutionsScenario modeling 2012 SAP AG. All rights reserved.14

SAP GRC Risk ManagementAlign enterprise risks with business valueProtect the fundamentalbusiness value driversInsight into themanagement of riskVisibility into catastrophicvalue destroying risks 2012 SAP AG. All rights reserved.15

Thank youPaul PetraschkGRC Senior ConsultantKM Champion - GRC Process ControlSAP Deutschland AG & Co. KGPhone 49/ 6227/ 7-56751Mobil 49/ 160/ 470 33 [email protected]://www.sap.com/grc

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