A Brief Overview of Risk Management and Lessons for the Corporate Buyer

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A Brief Overview of Risk Management and Lessons
for the Corporate Buyer
Chris Crowley, Director of Sales, BCD Travel,
ACTE Director at Large
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General Principles
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What is Risk?
The Collins English Dictionary defines Risk as

• The possibility of incurring misfortune or loss
• The chance of a loss in which a claim may be
  filed
• Vulnerable (at risk)
• To proceed in an action without regard to the
  possibility of danger involved
• To expose to danger or loss
• To act in spite of the possibility of injury or
  loss

IN EACH CASE RISK RESULTS FROM ACTION
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Close the Curtains! Stay in Bed!!
Risk is an essential part of any healthy business

• New Products
• New Markets
• New Acquisitions

Risk Management is about finding cost effective
ways of reducing the likelihood of something
going wrong or in the event it does the impact
on your business.
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Typical Drivers of Business Risk
Source The Risk Management Standard, Institute
of Risk Management
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Risk is Constantly Evolving

• Legislation changes
• Employees lose/gain new rights
• New products and new technologies evolve
• External factors evolve beyond our control

DONT PANIC GET PREPARED
Effective control of risks can deliver tangible
bottom line benefits
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Potential Consequences of Unmanaged Risk
Source Risk Management, Institute of Directors
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Effective Risk Management
Effective risk management requires you to
understand your business intimately and to ask

• How do different operations and processes
  interact?
• What if key facilities and people were not
  available?
• When would we be unable to operate?
• What if the unlikely and the unexpected actually
  happened?

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The Objective of Risk Management

• To add maximum sustainable value to all the
  activities of the organisation. It marshals the
  understanding of the potential upside and
  downside of all those factors which can affect
  the organisation. It increases the probability of
  success, and reduces both the probability of
  failure and the uncertainty of achieving the
  organisations overall objectives.

Risk Management is Good Management
Risk Management, Institute of Directors
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Risk Management Business Travellessons for the
corporate buyer
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Key Areas of Concern in Assessing Risk Management
for Corporate Buyers

• Traveller Security
• Health Safety
• Duty of care Minimising Risk

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Key Influences in Risk Management Strategy

• Exterior Influences

TMC Suppliers Government Regulations /
Restrictions Areas of Risk The 9/11 Effect
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Losing Sleep Areas of Risk
Challenges
Risks

• Bombs
• Isolation
• Injury
• Financial Loss
• Human Cost

Travellers stranded Where are our
people? Injury/Loss of life Insurance Getting
people home Crisis Management Disaster
Recovery Communication Bush/Jungle
Telegraph Panic Control

• Loss of Life
• Isolation
• Insurance
• World Economy

• Panic
• Isolation
• Widespread Loss of Life
• World Economy

• Instability
• Currency devaluation
• Suspension of transport networks
• Collapse of infrastructure
• Emigration control

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Key Factors in Risk Management
Traveller Security Keep your Is open!!
Influence
Inform
Identify
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Traveller Security

• Regular Updates to Travellers
• Key Destinations and Flashpoints
• Travel Policy Communicated
• Emergency Policy
• Travel Portal

Inform

• Control and Redirect on Hotspot Destinations
• Limit Number of Travellers on Same Flights
• Communicate Your Travel Policy and Risk
  Management Guidelines to Suppliers
• Control and Redirect on Specific Suppliers

Influence
Identify

• Ensure Up-to-date Destination/Crisis Info
• Technology Tools to Instantly Locate Travellers
• Single or Reduced Booking Avenues
• International Networks
• Supplier Relations Know Who Youre Dealing With

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Traveller Security Tools Currently in the
Marketplace
PeopleTracker
MedAire
iJet
FlightLock
ISOS
ASI
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The Importance of the Travel Policy
P O L I C Y

• Preferred Suppliers
• Defined Booking Sources
• Incorporate Health Safety Guidelines
• 24hrs/Emergency Services
• Specific Destination Protocol
• Duty of Care
• Responsibility of the Employee

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Total Journey / Total Cost of Trip
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Changes to the way we work

• Alternatives to face-to-face meetings
• Video conferencing
• Restricting travel
• Limiting number of travellers
• On the same trip
• On the same transport

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IDENTIFY THREAT
Evaluate against travel profile
Set acceptable limit / level of risk
Implement strategy to reduce threat to acceptable
risk level
Monitor changes threats mitigation strategy
BE PREPARED TO RESPOND
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Working with Suppliers

• Identify minimum requirements
• Clearly communicate your policy
• Stipulate requirements at time of tender/RFP
• Monitor and test supplier commitments

• Clearly communicated policy
• Must demonstrate clear disaster recovery strategy
• Must offer case studies and customer references
• Must have access to appropriate technology

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The Cost

• The benefits of developing a comprehensive risk
  management strategy ALWAYS outweigh the potential
  costs of not having a strategy

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The Benefits

• A solid risk management plan enables
• Enhanced safety
• Fewer lawsuits
• You to meet regulatory compliance requirements
• Enhances asset management

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Actions you can take RIGHT NOW!

• Who is responsible for Risk Management in your
  organisation?
• Ask to see a copy of your Risk Management policy
• Test your travel agent ask them to locate
  instantly all your travellers NOW!
• Ask every supplier you have for a copy of their
  Disaster Recovery Plan
• Create a Risk Management Group in your
  organisation and meet regularly
• Build a Disaster Recovery Strategy

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How to

• Draft a disaster recovery strategy
• Focus of attention
• Map business priorities onto system priorities
• People, safety and welfare
• Continuity of critical business activities
• Internal and external communication
• Dialogue with emergency service providers to
  establish their needs, concerns and requirements
• Tools
• Emergency plan
• Crisis plan
• Specialist support plans
• Business function plans
• Timetables for recovery
• Task lists outlining who should do what
• Key stakeholder lists
• Rehearse roles

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Useful Links

• http//acte.org
• http//www.irmsa.org.za/
• http//www.asata.co.za/pages_public/resources_advi
  ce_00.htm
• http//www.bdeglobal.com/sc_travel-risk.html
• http//www.crg.com/default.aspx?page322
• http//www.ft.com/reports/riskmanapr2006
• http//www.managingrisk101.com/?gguskwrisk20ma
  nagementgclidCJnI9tLO0oYCFSZfEgodMRzJzg
• http//www.travelriskcenter.com/TRC/

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Ignorance is no defence