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A Brief Overview of Risk Management and Lessons for the Corporate Buyer

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Terror. Natural Disaster. Contagion. Political Upheaval. Bombs. Isolation. Injury. Financial Loss ... Implement strategy to reduce threat to acceptable risk level ... – PowerPoint PPT presentation

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Title: A Brief Overview of Risk Management and Lessons for the Corporate Buyer


1
A Brief Overview of Risk Management and Lessons
for the Corporate Buyer
Chris Crowley, Director of Sales, BCD Travel,
ACTE Director at Large
2
General Principles
3
What is Risk?
The Collins English Dictionary defines Risk as
  • The possibility of incurring misfortune or loss
  • The chance of a loss in which a claim may be
    filed
  • Vulnerable (at risk)
  • To proceed in an action without regard to the
    possibility of danger involved
  • To expose to danger or loss
  • To act in spite of the possibility of injury or
    loss

IN EACH CASE RISK RESULTS FROM ACTION
4
Close the Curtains! Stay in Bed!!
Risk is an essential part of any healthy business
  • New Products
  • New Markets
  • New Acquisitions

Risk Management is about finding cost effective
ways of reducing the likelihood of something
going wrong or in the event it does the impact
on your business.
5
Typical Drivers of Business Risk
Source The Risk Management Standard, Institute
of Risk Management
6
Risk is Constantly Evolving
  • Legislation changes
  • Employees lose/gain new rights
  • New products and new technologies evolve
  • External factors evolve beyond our control

DONT PANIC GET PREPARED
Effective control of risks can deliver tangible
bottom line benefits
7
Potential Consequences of Unmanaged Risk
Source Risk Management, Institute of Directors
8
Effective Risk Management
Effective risk management requires you to
understand your business intimately and to ask
  • How do different operations and processes
    interact?
  • What if key facilities and people were not
    available?
  • When would we be unable to operate?
  • What if the unlikely and the unexpected actually
    happened?

9
The Objective of Risk Management
  • To add maximum sustainable value to all the
    activities of the organisation. It marshals the
    understanding of the potential upside and
    downside of all those factors which can affect
    the organisation. It increases the probability of
    success, and reduces both the probability of
    failure and the uncertainty of achieving the
    organisations overall objectives.

Risk Management is Good Management
Risk Management, Institute of Directors
10
Risk Management Business Travellessons for the
corporate buyer
11
Key Areas of Concern in Assessing Risk Management
for Corporate Buyers
  • Traveller Security
  • Health Safety
  • Duty of care Minimising Risk

12
Key Influences in Risk Management Strategy
  • Exterior Influences

TMC Suppliers Government Regulations /
Restrictions Areas of Risk The 9/11 Effect
13
Losing Sleep Areas of Risk
Challenges
Risks
  • Bombs
  • Isolation
  • Injury
  • Financial Loss
  • Human Cost

Travellers stranded Where are our
people? Injury/Loss of life Insurance Getting
people home Crisis Management Disaster
Recovery Communication Bush/Jungle
Telegraph Panic Control
  • Loss of Life
  • Isolation
  • Insurance
  • World Economy
  • Panic
  • Isolation
  • Widespread Loss of Life
  • World Economy
  • Instability
  • Currency devaluation
  • Suspension of transport networks
  • Collapse of infrastructure
  • Emigration control

14
Key Factors in Risk Management
Traveller Security Keep your Is open!!
Influence
Inform
Identify
15
Traveller Security
  • Regular Updates to Travellers
  • Key Destinations and Flashpoints
  • Travel Policy Communicated
  • Emergency Policy
  • Travel Portal

Inform
  • Control and Redirect on Hotspot Destinations
  • Limit Number of Travellers on Same Flights
  • Communicate Your Travel Policy and Risk
    Management Guidelines to Suppliers
  • Control and Redirect on Specific Suppliers

Influence
Identify
  • Ensure Up-to-date Destination/Crisis Info
  • Technology Tools to Instantly Locate Travellers
  • Single or Reduced Booking Avenues
  • International Networks
  • Supplier Relations Know Who Youre Dealing With

16
Traveller Security Tools Currently in the
Marketplace
PeopleTracker
MedAire
iJet
FlightLock
ISOS
ASI
17
The Importance of the Travel Policy
P O L I C Y
  • Preferred Suppliers
  • Defined Booking Sources
  • Incorporate Health Safety Guidelines
  • 24hrs/Emergency Services
  • Specific Destination Protocol
  • Duty of Care
  • Responsibility of the Employee

18
Total Journey / Total Cost of Trip
19
Changes to the way we work
  • Alternatives to face-to-face meetings
  • Video conferencing
  • Restricting travel
  • Limiting number of travellers
  • On the same trip
  • On the same transport

20
IDENTIFY THREAT
Evaluate against travel profile
Set acceptable limit / level of risk
Implement strategy to reduce threat to acceptable
risk level
Monitor changes threats mitigation strategy
BE PREPARED TO RESPOND
21
Working with Suppliers
  • Identify minimum requirements
  • Clearly communicate your policy
  • Stipulate requirements at time of tender/RFP
  • Monitor and test supplier commitments
  • Clearly communicated policy
  • Must demonstrate clear disaster recovery strategy
  • Must offer case studies and customer references
  • Must have access to appropriate technology

22
The Cost
  • The benefits of developing a comprehensive risk
    management strategy ALWAYS outweigh the potential
    costs of not having a strategy

23
The Benefits
  • A solid risk management plan enables
  • Enhanced safety
  • Fewer lawsuits
  • You to meet regulatory compliance requirements
  • Enhances asset management

24
Actions you can take RIGHT NOW!
  • Who is responsible for Risk Management in your
    organisation?
  • Ask to see a copy of your Risk Management policy
  • Test your travel agent ask them to locate
    instantly all your travellers NOW!
  • Ask every supplier you have for a copy of their
    Disaster Recovery Plan
  • Create a Risk Management Group in your
    organisation and meet regularly
  • Build a Disaster Recovery Strategy

25
How to
  • Draft a disaster recovery strategy
  • Focus of attention
  • Map business priorities onto system priorities
  • People, safety and welfare
  • Continuity of critical business activities
  • Internal and external communication
  • Dialogue with emergency service providers to
    establish their needs, concerns and requirements
  • Tools
  • Emergency plan
  • Crisis plan
  • Specialist support plans
  • Business function plans
  • Timetables for recovery
  • Task lists outlining who should do what
  • Key stakeholder lists
  • Rehearse roles

26
Useful Links
  • http//acte.org
  • http//www.irmsa.org.za/
  • http//www.asata.co.za/pages_public/resources_advi
    ce_00.htm
  • http//www.bdeglobal.com/sc_travel-risk.html
  • http//www.crg.com/default.aspx?page322
  • http//www.ft.com/reports/riskmanapr2006
  • http//www.managingrisk101.com/?gguskwrisk20ma
    nagementgclidCJnI9tLO0oYCFSZfEgodMRzJzg
  • http//www.travelriskcenter.com/TRC/

27
Ignorance is no defence
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