Tell us what you think

We want to create the best possible experience for our learners. Your feedback helps us to improve the experience for everyone.

Maintaining Risk

Objective

After completing this lesson, you will be able to explain procedure for creating and maintaining Risk.

Master Data Flow: Set up Risk by Choosing Risk Category

Graphic showing the master data flow from start to end. The following steps are highlighted: 5 - Set up risk by choosing risk category, and B - Assign impact and driver to risk.

Risk Types

Let’s understand Risk Types in Risk Management:

A photo of an office building with bright lights and grass outside.

Operational Risk: The impact of operational risks is assessed along impact categories. Impact categories group potential losses and negative outcomes in topic areas that are relevant for the business such as Reputation and Additional Costs (Financial Impact). Impact categories don't change frequently, but remain stable for a longer period of time. In case an operational risk is assessed with multiple impacts (impact categories), the different impacts are summed up to provide an overall risk level.
Corporate Risk: The impact of corporate risks is assessed along forecasting horizons. Forecasting horizons are defined periods in time for which the assessment is given. For example, 2012, mid-term, long-term. Forecasting horizons, and with that the given assessments, are assumed to change on a continuous basis, for example, 2012 to 2013. The assessment for different forecasting horizons is not summed up, but kept separate so each forecasting horizon has its risk level. The settings affect the lists of choices in menus for creating a risk or opportunity. Activating a risk and opportunity type enables the display of the new choice for the risk and opportunity type.

Business Example: Creating a Risk in SAP Risk Management

CRG International, Inc. decided to create the Risk "error in closing & consolidation process."

Sam, as Risk Owner, chooses the Risk Type "Operation Risk" and creates the Risk "Error in closing & consolidation process" in SAP Risk Management.

For more information on how to create Risk, you can find needed information via the link: Creating a Risk | SAP Help Portal

Let’s discover how he does this in the following exercise.

Create Error in Closing & Consolidation Process as Risk

ExerciseStart Exercise

Describing the Following Tabs of Risk Master Data

A screenshot that shows the risk management system and highlighted the tabs at the top of the page.

Roles: Allows the Risk Manager to maintain Risk Expert and Risk owner for Collaborative Risk Assessment and Risk Assessment.

Key Risk Indicators: Maintaining KRI for continuous insights of risk.
Analysis: Browse to view the Risk Assessment result of risk.
Risk Evaluation: Browse to view the Collaborative Risk Assessment result.
Risk Incidents: Browse to view the incidents of risk.
Influenced Risks: Browse to view or add influenced risk to maintain interrelationships.
Underlying Risks: Risk Grouping allows consolidation of child risk to one parent risk to roll up the Risk Information by reducing the number of risks that must be analyzed.

Survey: Browse to view survey answers.

Risk Bow-Tie Model

The Risk Bow-Tie Model is a visual representation of the cause-and-impact relationships in a risk management context.

Risks can be linked to an activity or directly to an organizational unit.

The risk is described in terms of drivers (events that could cause the risk to occur) and impacts (consequences if the risk event were to occur). Multiple drivers and impacts can be assigned to a risk.

In the next lesson, you learn how to set up risk response and be introduced to assigning roles.

Next lesson