By Helena La Fleur, Enterprise Risk Manager, Team Lead

Introduction

The landscape of governmental functions is changing. We are being forced to adapt to new technologies, practice diverse thinking beyond our current boundaries, and engage in deeper collaborative efforts that provide a natural stress test for most agencies. As such, it is crucial to manage the effects of uncertainty as we integrate data-driven techniques and technologies to enhance relevant responses to exposures.  

Risk Management Framework

How do we manage this new reality and its risks? The Enterprise Risk Management (ERM) framework is a crucial component in the dynamic nature of business. The ERM strategy supports agency-wide collaboration, as decision-makers are tasked with providing improved outcomes. ERM encourages a holistic approach to strategic planning that includes representation of agency-wide systems and processes such as “big data.” SORM has developed the Texas Enterprise Risk Management (TERM) Guidelines to help state agencies implement ERM in their organizations.

Strategic Planning

With the implementation of new information systems, larger datasets are now available to support agency-wide risk management decisions. This creates a path for creative and strategic thinking to merge. As stakeholders adapt to new ways of thinking, they have a greater opportunity to identify solutions to ongoing risks while anticipating new or emerging risks through collective, data-driven decision-making.

Data Analysis

Data-driven decision-making increases awareness of key aspects that drive your strategic plans. Stakeholders are under increasing pressure to address exposures at a higher level. Exercising ERM strategies will help bring new technologies and collaborative decision-making to the next level. The strongest strategies include collecting internal, external, and compliance data from departments across the agency. Internal data may consist of business processes, metrics, and regulatory analyses. A review of external factors such as vendor performance, social media platforms, and world events may provide insight into potential supply chain interruptions and other business interruptions. These types of data often provide a measure of compliance through key performance indicators, thus providing valuable considerations for strategic planning.

Conclusion

While State of Texas agencies have long been established, how we address public needs is at the forefront of our government. The ERM framework can be a valuable tool for ensuring agencies remain focused and resilient while serving the public through unique missions. Data-driven decisions work best when implemented across organizations and consider all business functions, rather than the siloed approach traditionally used. SORM promotes data-driven decision-making across all State agencies and is available to assist you on your journey.