Uncertainty Management: Risk and Performance, Two Sides of the Same Coin

This article is from an Oracle thought leadership whitepaper.

The bottom-line role of management is balancing performance and risk to create stakeholder value.

This requires both performance management and risk management. Performance management focuses on achieving the desired goals and targets of the organization, but is often practiced in business silos based on the organizational structure and decision authorities in place.

Risk management is another critical discipline, yet is hardly ever performed across an entire organisation. Performance management and risk management are often pursued as different and separate activities; frequently disconnected from each other. This, simply, should not be.

EPM is a management discipline that embraces and combines all management processes. These management processes include strategic ones, such as gain-to-sustain, investigate-to-invest, and design-to-decide, as well as tactical and operational management processes, such as plan-to-act, analyze-to-adjust and record-to-report.2
EPM creates a competitive advantage for those organizations that adopt it by enabling them to reach a state of, what we call, “management excellence”; anticipating and responding to changing business conditions faster and with more insight than their peers, improving their strategic agility to act on those insights, and improving alignment and collaboration between individual business units and external stakeholders.

Enterprise risk management (ERM) is a management discipline which is performed to deal with possible threats to the organisation and seize opportunities in line with business objectives. By identifying and proactively addressing risks and opportunities, business enterprises protect and create value for their stakeholders including owners, employees, customers, regulators, and society overall.

To succeed, in a sustainable way, performance and risk management must be performed in tandem across the entire organization. These disciplines should not be performed as separate activities as they are two sides of the same coin. What’s the name of that coin? Uncertainty management.

Any management decision inherently carries some uncertainty. It doesn’t matter if the decision is about an investment, a new product introduction, or budget plans for the future, there is always a chance that the expected outcome may not be achieved. Performance and risk, therefore, are two important perspectives from which uncertainty in making business decisions should be studied.

Download the full story from Intellient whitepapers – Uncertainty Management – Risk and Performance, Two Sides of the same Coin

If you’re looking for performance management and risk management solutions for your business contact Intellient