Visualizing & Mitigating Operational Risks

Jul 25, 2019

Every organization deals with risk. Some risks come from the nature of the market in which your organization operates. There is also risk that comes from the day-to-day actions of your organization’s personnel and resources. This second type of risk is known as operational risk and it is usually defined as the risk of loss resulting from inadequate or failed internal processes, people, and systems, or from external events. Some examples of this type of risk include degraded customer or supplier relationships, internal and external fraud, hacking of IT systems, loss of intellectual property, damage or delay in operations due to catastrophic/geopolitical events, failed alignment with mission/strategy, and the lack of adherence to internal company policies. Because it is related to personnel and resources, operational risk becomes harder to manage as interactions amongst members of an organization become more complex and decentralized. How important is it to mitigate this type of risk? Well, it has been estimated that from 2011 to 2016 nearly $210 billion was lost solely by major banks resulting from operational risk.

More and more organizations are turning to their vast amounts of internal and external data to prevent operational risks from occurring. Advanced analytics techniques, combined with intuitive visualizations, can turn information like emails, call center records, websites, social media channels, documents, images, and audio into operational insights that have significant operational impact.

Company communications are a rich data source for understanding the unofficial structure of your organization. Data about communication patterns is frequently used to discover insights about how your teams work together and whether they need to be micromanaged or given more freedom. Professional services firm Genpact used its company data to discover the communication patterns most associated with its “Rockstar” employees. Organizational network and behavioral analysis performed on communication data can provide visualizations of the networks through which your employees communicate. These can, in turn, be analyzed to identify key contributors and causal factors affecting team performance.

Your organization’s internal data can take the mystery out of the human behavior on which your operations rely. For example, IBM has used its internal data to predict which employees are likely to leave the company in the next 6 months with a 95% accuracy rate. The Stanford Cancer Center uses predictive analytics, combined with intuitive visualizations, to optimize employee scheduling, which has resulted in significant decreases in patient wait times and overtime pay-- while significantly increasing nursing satisfaction. Amazon uses its historical sales data to predict where to ship items before they have even been ordered.

As an organization’s operations become more complex, it becomes more exposed to uncertainty. Luckily, your organization is producing the very information it needs to mitigate operational risk every day. By combining advanced analytics with data visualizations, you can turn unstructured data into meaningful insights about how your company runs – avoiding the pitfalls faced by operational risk. ASR has experience in machine learning, artificial intelligence, network analysis, natural language processing, topic modeling and text analytics that will help you develop, monitor, and visualize key risk indicators. You cannot mitigate risks you cannot see. If you take action to analyze and visualize your company’s data, you will be well positioned to eliminate operational risks before they develop into substantial losses.

Contact us here to learn more about what ASR can do to help visualize and mitigate your organizations operational risks.