May 26 & 27
Risk Anticipation –
A must for Financial Performance &
Improvement in Contract Delivery
Colette Casimir
Atos Origin Group Senior Vice President
Risk Management, Process & IT
Marsh Technology Conference 2005
Zurich, Switzerland.
Content

Mission

Anticipation of Risk is essential to our Business

Risk Management approach

Key Prerequisites supporting Risk Management
Protecting ourselves in a competitive environment - learn and capitalise positively from our mistakes
2
Mission
To help the business
WIN and DELIVER
Timely, on Target PROFITS
through the
ANTICIPATION & Management
of RISK
Protecting ourselves in a competitive environment - learn and capitalise positively from our mistakes
3
Philosophy
The damage in most contracts is done
before contract signature
or in the first few weeks of the contract

What risks do we take KNOWINGLY?

Risk Management is everybody’s responsibility

Early identification is best: Prevention is better than cure

Avoid Bad Surprises. Bad News are allowed

Hidden risks are dangerous risks: Do not be risk averse

People’s attitude and not process alone will make it work

Output is more important than the process

Reduce the Cost of Non-Quality

Apply a Pragmatic approach
Protecting ourselves in a competitive environment - learn and capitalise positively from our mistakes
4
Risk Taking is required in our Business

Increasingly competitive business context (conditions, price reduction,
penalties, deadlines, quality)

Multiple business partnerships

High stakes (keeping & winning market share)

Complex solutions difficult to estimate in tight schedules

Immature or unrecognized technologies

Strong commitment where functional & technical scope moves

Highly demanding clients requiring flexibility
MOST OF THE TIME increasingly high levels
of risk taking is required
Protecting ourselves in a competitive environment - learn and capitalise positively from our mistakes
5
Risk Management is Essential for our Business

By law, we are obliged to reinforce our internal control in order to
provide report to the shareholder

Effective risk management can lead to:
– Contract success and profitability
– Achievement of margins (or even increase)
– Acceptance of system or service by customer
– Increased chance of customer satisfaction
– Reduced maintenance
– Reduce the Cost of Non-Quality
– Reduced exposure to penalties and liquidated damages
– Effective partner relationships
Protecting ourselves in a competitive environment - learn and capitalise positively from our mistakes
6
Risk Management aims: Deal with in-depth issues
ON WHAT SHOULD WE CONCENTRATE ?
Pre-sales
Contract
Development
& Delivery
Managed Operations
•What risks do we take knowingly?
•For what stakes?
•Have we carefully identified and analyzed them (impacts)?
•In what areas should we be particularly vigilant?
•What leverage do we have to reduce major risks?
•What are the supplementary risks or constraints that we have to face?
•What kind of project or service management can we adopt?
•Are we clearly addressing and dealing with the major risks and
stakes?
•Do we anticipate enough and prepare ourselves as a consequence?
•Are our action plans pertinent?
•Are our actions efficient?
•Do the team have sufficient internal support to be successful (Top
Management, Network of experts, Legal, Finance …)
•Are we working together (Client & us) to circumvent our shared risks?
Permanent Updated Risk Mgt Road Map required
to allow efficient Anticipation & Mitigation of Risks
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7
Risk Management Approach
(1/3)
Risk Management and Quality
Understanding of Risk Profile
- are independent
- consider both bid
and delivery risks
Bids
- have a network for sharing knowledge
- take the long view
- ensure the right level of risk is taken
- listen and inform the business
- drive prevention and correction
Systems
Integration
Managed
Operations
Immediate High impact
Impact felt over a longer time
- Anticipation
- Transition and due diligence
- Proactive
- Customer and partner
- Issue management
- client perception
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Risk Management Approach
(2/3)
1. Deployment of Risk Management best practices and processes
throughout the company
-
promoting a risk anticipation culture
installing a natural and proactive attitude at all levels
training Project & Delivery Managers in the basics and fundamentals
coaching by Subject Matter Experts (SME) as leverage in risk analysis
and mitigation for Bids, Systems Integration & Managed Operations
develop a realistic set of best practices
2. Identification of key risk SI projects & MO deliveries from the portfolio and
monitor them through SMEs and Risk Committees
Protecting ourselves in a competitive environment - learn and capitalise positively from our mistakes
9
Risk Management Approach
(3/3)

More care taken to include all the risk factors: technical,
project & delivery management, customer relationship management,
legal, financial

Reinforcement of risk analysis in pre-sales phases, so as to have a non
ambiguous global roadmap

More care taken at contract launch and operational start-up

Visibility on the evolution of risks as contract moves forward, and
measurement of trends

Unified risk reporting
Protecting ourselves in a competitive environment - learn and capitalise positively from our mistakes
10
Key Prerequisites supporting Risk Management
Strong support and commitment required from the TOP Managers
including the Board to ensure efficient results in:
• Promoting the mandatory contribution of all Managers in
supporting RM approach
• Establishing the network of SMEs and to obtain in a timely manner, these
experts in order to create dedicated task force to support Bids & Contracts
to guarantee a high level of Risk Management expertise to SI & MO
to ensure confidence in action plans as a result of support and coaching
to improve the Risk Management maturity level of our managers
-
• Establishing the network of RM teams in Corporate/Region/Country
-
to develop a positive Risk Management mindset in daily project activities
to support / mentor project and delivery managers
to manage a proactive escalation process
Protecting ourselves in a competitive environment - learn and capitalise positively from our mistakes
11
RM: Risk Management
SME:Subject Matter Expert
Support
Bid
Managers
Project/Delivery
Managers
Account
Managers
support
&
Crisis Mgt
Corporate RM
The Risk Management: Support,
Coordination, Crisis Mgt
coordination
Region / Country
RM Team
Network of
SMEs
-
commitment
arbitration
due diligence
Crisis Mgt
TOP Management
including the BOARD
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12
Actors in Risk management: SMEs
Technical
Directors
Project
Directors
Finance
Customers
RM&Q Managers
Personnel
Partners
Delivery Managers
BID
Systems Integration
Managed Operations
Technical Experts
Legal
Solution Architects
Technical Architects
Sales
Purchase
SME: Subject Matter Expert
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13
Key Outputs
1. Bids: « Risk Profile » Report

major risk status per area

key recommendations & actions
2. Contracts: « Risk Status » Report

major risks & impacts

risk trends per area

mitigating actions
3. Monthly Project Reviews
4. Top Risk Project Reports: RAG Report (Red Amber Green)
5. Regular Top Risk Contract Committee
6. Risk Audits
Clear and Shared Vision to Decide and
to Monitor efficient Action Plans
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14
RM Output: The Global Picture
Project & Delivery
Managers
monthly project
» A » report
monthly project
« B » report
monthly project
« C » report
monthly project
« D » report
Project & Delivery
Managers
Local RM Managers
Corporate
RM Managers
Risk
Reviews
Risk
Committee
risk
register
extract
FINAL
RAG Report
risk
register
risk
register
risk
register
Board
Full Risk
Reports
extract
High Risk
RAG Report
Project / Delivery
review
Involvement of SMEs
Protecting ourselves in a competitive environment - learn and capitalise positively from our mistakes
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