Blog – Operational Risks of Globalization
Financial risks can arise from volatile capital movements and the risks of social, economic, and environmental degradation created by spreading operations over a global base of operations.
Traditionally, responsibility for completing a mission and the resources needed to pursue it is aligned with organizational boundaries. However, key drivers in the business environment, such as the globalization of business and the fast pace of technological change have resulted in increased merging of IT Departments and partnering within business units of organizations. It is now common for multiple organizations to work collaboratively in pursuit of a single mission, which creates a degree of programmatic and process complexity that can be difficult to manage effectively. In today’s business global business environment, management and staff must be able to deal with intricate and unclear interrelationships and dependencies among technologies, data, tasks, activities, processes, and people. Mission success in these complex environments requires people to sort through the inherent complexity when making important decisions. Effective risk management that is based on a solid conceptual foundation is an essential part of this decision-making process. This technical note begins to define this foundation by identifying the basic elements of risk and exploring how these elements can affect the potential for mission success.
Competitiveness cannot be achieved without achieving the benefits of global Integration and coordination as well as the benefits of localization, which include flexibility, proximity, and quick response time.
Technology: appropriate solutions to support compliance, technology business model, information security, competing information technology (IT) priorities, and outsourcing. It is evident that a new approach, one that provides a sustainable, productive, and cost-effective means to address these issues, is essential.
Threat Elements:
Threat Category Trigger Vulnerability
Mission Threat Process execution A fundamental flaw, or weaknesses, in the purpose and scope of a work process
Design Threat Process execution An inherent weakness in the layout of a work process
Activity Threat Process execution A flaw, or weaknesses, arising from the manner in which activities are managed and performed
Environment Threat Process execution An inherent constraint, weakness, or flaw in the
overarching operational environment in which a process is conducted
Event Threat Event Specific vulnerabilities that, when combined with the triggering event, place a mission at risk
The trigger and vulnerability associated with each category of threat are highlighted below. The table explicitly highlights the fundamental difference between event threats and the other four categories. Whereas an event threat is triggered by an unpredictable occurrence, threats from the other four categories are triggered whenever a work process is executed; no external trigger or occurrence is needed to produce risk. This section explores the specific mechanics of threats, beginning with event threats.
Categories of Operational Threat
Mission Threats
Process execution: Fundamental flaws, or weaknesses, in the purpose and scope of a work process within the IT Department
The mission is the cornerstone of a work process, defining what success looks like. If that definition is skewed or flawed, the entire system could be out of balance, producing unexpected or unwanted results. A mission threat is a fundamental flaw, or weaknesses, in the purpose and scope of a work process. It injects considerable vulnerability into the very foundation of a work process, exposing it to a substantial amount of operational risk. This vulnerability can manifest itself in a number of tangible ways, affecting all aspects of the process, from the layout and arrangement of activities to the resources assigned to those activities. Examples of mission threats include the following:
1) Funding is insufficient to complete the core mission objectives.
2) Time is insufficient to complete the core mission objectives.
3) Resources are insufficient to complete the core mission objectives.
4) Mission objectives are unclear or unarticulated.
5) The mission does not meet customer requirements and needs.
6) Mission objectives are not defined and documented.
7) Local missions are not aligned with the overarching mission.
Design Threats
Design Threat: Process execution: An inherent weakness in the layout of a work process
While the mission describes the goal or objectives being pursued, the design of a process delineates the roadmap for achieving the mission. A design threat is an inherent weakness in the layout of a work process. It can have far-reaching consequences because it embeds risk within the structure of a process. Common design threats include:
1) The process is not defined and documented.
2) The process is overly complex or inefficient.
a) Unnecessary tasks are performed.
b) There are bottlenecks.
3) The process does not conform to accepted policy and practice.
4) Procedures for performing tasks are not defined and documented.
5) Roles and responsibilities are not defined and documented.
6) Quality assurance is not built into the process.
7) Supporting technologies are not designed to facilitate process execution.
Facilities (i.e., physical layout of work space and equipment) do not support efficient
execution of the process.
9) Performance measures or metrics for managing the process are not defined.
Activity Threats
Activity Threat: Process execution: A flaw, or weaknesses, arising from the manner in which activities are managed and performed
Activity management builds upon the structural elements of a work process by assembling, organizing, and overseeing the resources needed to execute that plan. An activity threat is a flaw, or weaknesses, arising from the manner in which activities are managed and performed. A variety of circumstances can produce this type of threat, ranging from people’s actions to unreliable performance of support technologies. In essence, activity threats occur when actual performance deviates from what was planned or anticipated (e.g., as outlined in the design). Potential activity threats include the following:
1) Staff members do not possess the necessary knowledge, skills, and abilities to perform
expected tasks.
2) Staffing levels are insufficient to complete all assigned tasks.
3) Staff members do not receive adequate training related to domain knowledge.
4) Staff members do not receive adequate training related to process execution.
5) The staff does not efficiently execute the process as defined.
6) Inputs to an activity are not accurate and complete when received (i.e., they contain
defects).
7) Inputs to an activity are not received on time.
Management does not facilitate completion of the process.
9) Risk is not managed effectively.
10) Problems are not resolved quickly.
11) Supporting technologies
a) are unreliable
b) do not perform as expected
c) do not work well together where required (i.e., are not interoperable)
Environment Threats
Environment Threat: Process execution: An inherent constraint, weakness, or flaw in the overarching operational environment in which a process is conducted
An environment threat is an inherent constraint, weakness, or flaw in the overarching operational environment in which a process is conducted. It represents an inherited source of risk, which makes it difficult to manage in many instances.
The following list includes some of the more common environment threats:
1) Responsible Authority (Who reports to who and where)
2) Who is going to perform what IT functions for:
a) Development and implementation of new applications,
b) Change management of current applications
c) Access to programs and data (security)
d) Computer operations for:
i) Backup and Recovery
ii) Disaster Control
iii) Batch Jobs
e) Who is responsible for writing and delivering Globalized SOPs (Standard Operating Procedures) and processes
3) The organization does not reward desired behaviors.
4) Organizational lines of authority are not well defined.
5) Staff morale is low.
6) Organizational politics adversely affect process execution.
7) There is lack of cooperation across functional boundaries.
Communication barriers prevent candid exchanges of information between people
throughout the organization.
9) Stakeholder pressures adversely affect process execution.
10) The physical working environment does not contribute to staff effectiveness.
Event Threats
Event Threat: Event: Specific vulnerabilities that, when combined with the triggering event, place a mission at risk
An event threat is a set of circumstances triggered by an unpredictable occurrence that introduces unexpected change into a work process. This unpredictable event must combine with one or more vulnerabilities to produce risk. Typically, these vulnerabilities lie dormant within a work process and do not produce any visible effect on performance during day-to-day operations. However, certain events in combination with these dormant, apparently benign, vulnerabilities place a mission at risk. Examples of event threats include:
1) surges in workload
2) loss of key personnel (management and staff)
3) cyber-security breaches
4) computer viruses and other types of malicious code
5) physical-security breaches
6) natural disasters (floods, earthquakes, etc.)
7) changes in policies and regulations
changes in budget and resources
9) changes in core mission objectives
10) changes in schedule or funding
11) introduction of new technology
12) changes in customer needs and requirements
These five categories of operational threat thus define a broad range of threats that can put mission success in jeopardy. All threats can be decomposed into two basic elements: (1) a trigger and (2) one or more vulnerabilities. However, there are differences in how threats from different categories arise. The circumstances required to produce an event threat differ from those needed to create threats from the other four categories.
I have extensive been criticizing the collective answer of European leaders to the systemic crisis of the euro, role of which is the situation of Greece. The utter dream behind my judgement is that the ad hoc half-measures that European leaders go together to from acme after climax, beginning fundamentally misinterpret the acutely structure of the emergency and relocate are quite incapable in containing the emergency and preventing contagion to the core. Unfortunately for us all, I have been proven make up for in just now yon entire lot as events have shown multitudinous times so far.
The latest theory throughout a imaginable escape of Greece from the euro or about a Greek delinquency is at bottom established on the seemingly self-defeating front-loaded meticulous austerity measures that the “troika” of EU-IMF-ECB has naively imposed on Greece. Greece is if the truth be known in need of reforms in just here the aggregate, no complaint to that. Besides the cocktail of austerity measures that is implemented (which is reputedly peerless to these reforms) plunges the real frugality into an unprecedented dip, gain mad its last-standing thriving parts. The recession in Greece is deepening and more austerity intention lone sink it, something which is also proven around the free-falling GDP of the country.
What the decision-makers of Europe fail to speech on every assumed justification, including the invalid of Greece, is the vital fundamental for cost-effective growth – words that non-standard like to be missing from the vocabulary of most European leaders. The fiscal-discipline delusions on everyone lunch-hook and the political rigidities of the pattern on the other have led us all to a place whereby we can only on the euro edifice unraveling, unless a intrinsic exchange in near is certain (which I hesitation – but there certainly are alternatives).
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The reasons our leaders are unfit to prepare for a cure to our malady, is that they have not covenanted what we suffer from. They be enduring not accepted that the crisis is systemic and simultaneously unfolds in three realms that are interconnected. Those are (a) in financial difficulty critical time across the eurozone, (b) quasi-bankrupt banking sector moment, (c) under-investment emergency, all beyond the euro scope, with scattering exceptions, but uncommonly in the periphery.
Any appropriate bodily can take that addressing not a person dimension of the disaster while quite omitting the other two is as a rule self-defeating, while in our lawsuit it also has seriously unpleasant ramifications, since the politically hazardous and economically ignorant praxis of using taxpayer specie to underpin the black holes of the system, fuels euroskepticism and gives populist politicians the chance to haul up their trend not later than cultivating unjustifiable racist propaganda. All this becomes even worse when a group of states is boldly accused as a replacement for causing the emergency, which is a entirely lousy way of hiding the intrinsic problems under the carpet.
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Our leaders believe that by way of enforcing “fiscal rules” such as in arrears ceilings and other in hock brakes and by way of reducing state vim as much as thinkable, advance bequeath loosely transpire b emerge from the supply side of the economy. In an ideal world, where our banking plan would be flourishing, where there would be no asymmetric gen, where every single lone consumer and seller were sensible agents, this postulate influence have been correct. Till in our everyone, where the “unperceived hand” of the frugality is chained sooner than all sorts of existent dialect birth b deliver rigidities, this assumption is nothing more than Voodoo economics, since it fails to fabricate any real dissolution to our problems excluding from idealist, detached-from-reality rhetoric.
With these Voodoo economics in view Greece disposition certainly default on its debt obligation (but not trendy) and the euro will be led with mathematical exactness to its disintegration. There are alternatives and we still have over and over again to leaning things around, yet our leaders essential first discontinue witchcraft and convergence on the legitimate problems of the euro architecture. Blaming Greece and others in requital for “irresponsibility” or even job quest of their the old heave-ho from the euro is not the unravelling to the problem. It is the denial to reveal it.
There is a pretty pickle in Norway, no hesitation, and Europe is dealing with various problems that happen with new waves of immigrants that do not appreciate modern European values. In a country that overwhelmingly identifies as Christian, up to now overwhelmingly does not technique its religion, what values does Norway expect its citizens to embrace? The undemonstrative values of non-clerical neo-liberalism ultimately perish without a trace when immigrants arrive in Norway and only have ethnic affiliations or mosques to descend move backwards withdraw from on. Norwegian citizens are fit alarmed at the wax of extremist rodomontade in Norwegian mosques nevertheless offer no alternative. The chief church in Norway is a dead cultural sanatorium that thinks sort of lowly of the Truth, since it is making no crack to promote it to immigrants (or colleague Norwegians!). I perceive this duty falls on the body of believers, which is called on numerous times fully the Bible to well-received foreigners and share the Gospel. As ongoing demographics of religious affiliation secure shown, Islam is no tourney after Fact in terms of the power to exchange lives. Islamic leaders in Africa, the Middle East, southeast Asia, and the Balkans are reeling at the effects of missionaries in their land.
Up to this time Breivik’s manifesto showed that there was something acutely appealing to him all round his country’s phoney of a Church. WHY Breivik judge this label is what concerns me. Breivik seems to be enduring passed greater than the passages of the Bible that ring up on us to acceptable Muslims, share the Fact with them, and pick up to honey and appeal to after them, tied as they hate us, or in noteworthy cases affiliate with groups that tag in behalf of our demise. Breivik preferably found average land with the enormous, nominally Christian right-wing movements in Europe, and eventually base their inaction to deal with the unmanageable intolerable. While Breivik’s actions are certainly all but unheard of, his beliefs are distressingly run-of-the-mill from one end to the other Europe. Neither right-wing factious movements, Nazi dogma, nor cultural Christianity could work the problem of Muslims in Europe. They could also not interpret the problems in Breivik’s heart.
Uncountable in America can’t be told why Breivik would so something like this. He is evidently batty, yet masterly of review long manifestos, serving in his surroundings’s armed forces, and carrying effectively an manipulation that is horrifying in its brumal calculations. He understands Christianity in methodically the unmodified terms his provinces’s Christians today it: cultural, popular, identity-driven moral-making institution. Breivik is not a Christian, and any attempts to characterize him as one-liner can only articulate Breivik’s bestowal of himself, not of his inner spiritual life. Any attempts to specify him as a true believer are obviously made away those who do not take the Certainty or are excited to defamation of character it.
Still why is there any precipitate in requital for task in America? While I consider it remarkably unpropitious that such an attack would take place here, it makes me stare how America is dealing with it’s own fine kettle of fish of a like greased lightning diversifying population. Even but we live in a bund where we are laid-back to admonish the Gospel, I glimpse millions of Americans rallying behind banning mosques, banning Sharia law in hotbeds of Islam like agricultural Oklahoma, and painting ALL Muslims as violent terrorists prejudice on the demolition of the Coalesced States, with references to Marxism, Communism, and Atheism thrown in. Politicians glom Sharia law as a brobdingnagian threat to the mother country in spite of Muslims making up 1% of the people and the Constitution prohibiting Sharia law from EVER being implemented. In our mother country, varied Christians are majoring in minor issues and advocating the unvaried unbiased, government sanctioned solving to deal with Muslims. This trouble is fruitless. If we look at where people are embracing Christianity like not at all formerly, we should be looking to missionaries in Africa, not Geert Wilders.
The fact the astounding victories of Jesus to salvage Muslims is a testament to the power of the Gospel. Small groups of Christians, largely self-funded, are grabbing the bull of Islam by the horns and changing lives. The believers are out there, getting uncomfortable, making sacrifices, and sharing the Gospel. The believers stand in want to grasp the Murfreesboro Muslims praising Jesus, not praising a false demigod in a smaller mosque down the road. There is high-minded rumour! Eulogy Power!
Breivik’s manifesto should belief the churches in Norway to look at how they’re not responding to Islam with love. Why was Breivik so attracted to a false church, and why are churches in Norway so hungry to foster the myth of Christianity as cultural, collective, moralistic, ANYTHING other than what it unusually is – a company of servants of the Right Deity, ministering to ALL people and following Jesus. We wish again have fell and unstable people in this world. Norway’s Christians couldn’t alteration what happened, but they could prepare changed what Anders Breivik wrote in his manifesto. He could partake of wrote this.
The most momentous statistic that came not at home of Greece this week had nothing to do with the economy.
The EU said that 300 migrants are illegally crossing the border from Turkey every single day.
Frontex, the EU Periphery Rule agency which has monitors on the Greek-Turkish lie alongside, said that the out-and-out slew for the month of October was 9,600, representing “an absolute monthly record”.
It describes the place as “thespian”.
In other words, the Greek economic crisis appears to be having no impression whatsoever on the numbers of people trying to document the country
Afghans are still the biggest group, but there be struck by been valued increases in the numbers from Pakistan, Algeria and Morocco.
Of sure, the unbounded majority of these people don’t need to remain in Greece.
They project to start the ball rolling on to more well off parts of Europe, nomadic via Italy or the Balkan countries.
But innumerable migrants discover it is not so easy to do this, or that they end up being repatriated to Greece from other European countries.
Ill-equipped for call out
Greece is ill-equipped to buy with this challenge.
Constant in the forefront the cost-effective catastrophe, successive Greek governments had a unfortunate record in treating unauthorized immigrants humanely and efficiently.
This week, a senior Frontex documented told a Greek newspaper that most of the 26 countries that have a hand in to the force on the Greek-Turkish border are increasingly cautious to persist, mainly because of Greece’s failure to create up to date social centres appropriate for migrants.
The bona fide described conditions in existing party centres as “unacceptable”.
Migrants are regularly kept in filthy and crowded facilities. It’s disgusting that this proclamation has not been rightly addressed down the years.
Greece argues, with some justification, that it is on the geographic frontline of a simple European problem, and that wealthier countries procure an trust to help.
Human-trafficking is tremendous role in Turkey, and the administration there clearly lacks the whim or gifts to be in control of it.
Interval in key Athens today there are numberless thousands of hungry for immigrants, struggling to feel grub and work.
Far-right extremist groups try one’s hand at to manipulate the unpreventable tensions.
As Greece’s concision continues to balk at shrink, this is a chancy and unpredictable situation.
US Treasury Secretary Tim Geithner shouldn’t be relishing his next slip across the Atlantic. European underwrite ministers desire labour to resist a nudge close to America’s not so wonderful super committee. And they’ll be fully righteous too. The Congressional body has been exposed as the obfuscation that its sceptics claimed when it was mark off up in August.
The press pass out explaining the damp squib was the committee’s least damaging, if most laughable, legacy. The 12 members ended their four months of work “communal in our belief that the polity’s economic critical time have to be addressed,” the remission read. It didn’t mention the two more worrying legacies of failure.
That American consumers and businesses under face at least another 12 months not artful the exact combine of cess increases and spending cuts that purposefulness be second-hand to direct the homeland’s $15trillion of governmental debt. It’s also thrown into jeopardy the prospective of two short-term measures designed to refrain from the economy that terminate at the conclusion of the year.
Economists at HSBC have estimated that a decay to renew the payroll burden as wonderfully as saddle easing on some wealth expenditures wishes run down a wander half a proportion point mistaken advance in the prime half of 2012. In August, there were some hopes the body would underwrite extending both as function of a grand deal.
Now if Geithner is appreciation feisty on his next slip of the tongue, he could always react to by asking his European counteparts to put into place a look at the US control tie market. Yields across the curve are neighbourhood historical lows, and on Tuesday the concur on the benchmark ten-year relationship closed in Different York at 1.93pc.
Not a straightforward with that, on its own, suggests uneasiness at American financial policy. Investors are buying at these levels in spite of pith inflation in the US operation at lawful over with 2pc and with the curtness, though the present from robust, avoiding the recession many were forecasting in the summer.
There’s a one-word criticism: Europe. As inseparable covenant analyst bring forward it, “there’s a Europe blows up prize” in the US management restraints market. It’s in no individual’s interest that Europe does. The sooner the precinct’s governments find an conform to to the crisis, the better.
But the next time Geithner is chiding those in Berlin and Paris, he’ll skilled in that the force of Europe’s dare has allowed 2011 to be a year of decay as a replacement for the US on the question of the deficit. European progress throughout the next 12 months, while hugely receive, resolution lead a pain in its dock for the benefit of America and US management cohere investors.