Business Risk Management Series and Case studies

Our Opinion:

The Business risk management series started by us in the 1st week of July at slideshare has evoked great response. The first slide presentation in the series
has recieved 927 views and 65 downloads in 3 weeks. This was followed by The case study Ba 31 which proved even more popular with 1200 views in 2 weeks and the 3rd in the series Ba 32 has got 400 plus views in 4 days already, and was the most popular presentation in the finance group of Slideshare in the 4th wk of July.

We are now going to explain why, how and what we want to achieve by presenting this Business Risk management series at Slideshare and also provide a key route map for the series, for convinience of the reader. The Business Risk Management series book is going to be the volume 3 of the Time Cycle Module ( ISBN 1440493332- Vol 1) series.Ofcourse it is going to be a much more expanded work as it will not only cover Project or Operational Risk but also Market based and Credit based Risks.

We started the series on the 1st of July by the 18 slide presentation "Living dangerously : managing risks in business ".

The objective of this slide was to highlight the importance and the new role of day to day risk management in business. The fact that Risk was no longer a uncertainity but a daily occurance. Also the threats and opportunities surrounding the modern day business objectives and inadequacies of the current methods to track risk. After identification of the top business risks today,it transpires that even in the difficult business environment, more opportunities exist than threats.However the most important indicator of Risk is "VARIANCE" which is the key to tracking Risk as per the TCM. All these threats and opportunities will be treated independantly and developed in the Book and a few case studies shall also be done at slideshare.

The Book shall deal with managing risks while meeting the following business objectives.

Production or Service Generation Objective
Sales Objective
Cost Objective
Time Objective
Quality Objective
Survival Objective
Growth Objective
Dominance Objective
Employee Objective
Social Objective
Client Objective

The book will emphasise on the following Risks ( both threats and opportunities) to meet the above business objectives.

Protecting liquidity : Threat
Digitizing Business Process : Opportunity
Controlling operating costs : Threat
Revamping the workforce : Opportunity
Globalizing business operations : Opportunity
Re-working business solution : Opportunity


After explaining the difference in Risk interpretation under the TCM ( Time Cycle Module) the Business Risk Management series slide Ba01 calls for setting up a performance routemap based on adapted historical data ( survey data integrated with effect of linear and complex variables)as per the terms of Reference. The methodology on how this is to be actually done is elaborated in the Case Study Slide Shows Ba 31 to Ba 40 which are being shown in the slide show

The Case Study Slideshow Ba31 begins with identifying the process of tracking VARIANCE used in the TCM as the prinicple Risk identifier. The methodology traditionally used in scientific and engineering applications by CERN, NASA, Exxon or Arcelor Mittal is now upgraded and popularly being used as cloud computing technology by internet biggies Amazon and Google. It is actually an add on to technology and project risk managing principles that relied on application based inputs and not on the classical risk modelling techniques or VaR which are theoritical mathematical models more suitable for academic studies and not real life applications.

The first case study Ba31 on Risk managing the "Product Launch of a Soft Drink Brand" is based on a case study that is dealt with in Page 26 & 27 of the Book "Time Cycle Module: Vol 1". The first part of the Case Study identifies how the framework is to be laid for a case study and the Terms of Reference fixed. Here again we draw the principles from application based technological and project risks treatment which have traditionally been divided into four constraints the Scope Constraint, The Time Constraint, The Quality Constraint and the Cost constraint. We will demonstrate later in our case studies as how these principles are also applicable to financial risks and how markets and the economy at large can be made safe if we adhere to them.

The second case study Ba32 deals with Case studies on Market Based risk, Credit based Risk as well as Operational Risks. Whereas Operaltional Risks had been covered by our book Time Cycle Module while covering project and technology risks, market based and credit based risks required fresh research. What better way then to dig up the current U.S. housing crisis tangle to search for risk indicators which should have normally forewarned the regulators. Fortunately we found it all in a single report submitted by Republican Congressman Jim Saxton to the Congress in May 2008

Excerpts from the report have been used to demonstrate that all necessary risk indicators were available months in advance of the stock market crash of September 2008 and the root cause was in all possibility the large transactions of Credit Derivative Swap mortgages issued during the period between 2002 to 2006 when electronic recording was being set up.... and manual handling of voluminous transactions had become so problematic, that banks went ahead with trading without proper securitization. Largescale swindles or frauds could have taken place during this period as per Kindleberger's framework, highlighted in the Saxton report, a reason why the whole business of unbundling the toxic derivatives is still now being kept under wraps. Unusual trends as observed by the Risk analytics in the presentation points to possibility of largescale fraudulent and bogus multiple transactions by toxic banks that may create another crash if unearthed, with hundreds of influential bankers and brokers being booked under complicity directly or indirectly under U.S. criminal fraud laws.

The operational risk part once again sticks to the case-study " product launch of a soft drink brand" done in Chapter 3 of the Time Cycle Module Vol 1 ISBN 14440493332 as per the laid down guidelines outlined in the slide.

Identify how to protect
Chart route map and dispersion
Do the segmentation
Frame the boundary conditions
Draw the boundary limits
Measure volatility
Record unusual trends, discover previously undetected patterns.
Investigate relationships in data and do anomaly detection to arrive at possible risk

However after outlining the framework in Ba 31, the Case study Ba 32 deals with the successive steps involved in Risk analysing the Case as described below for operational risk and stops at defining the boundary conditions.The reason the entire metric of framework for operational risk was not investigated in this slide unlike the market and credit based risk, is that it would be necessary for a single presentation to have the continuity to demonstrate the importance of time limits on boundary conditions and the frequency, repeatablity and adaptability of checks making it safe as well as dynamic for risk free growth. These issues will be dealt with in our next case-study Ba 33 being taken up next week.