Risk Architecture

Building and managing fully risk vetted Enterprises

The need for building and managing fully risk vetted Enterprises has never been greater. Yet that goal has never been more elusive, despite the advent of ever more sophisticated surveillance, recording and analytical technology, ever in the service of those who demonstrate the most need for it.

Each extreme risk event of the last 50 years has never been predicted. The worst ones have devastated the financial core, at least, of the ultimate stakeholders, the people. In each, the root causes have never been systematically or analytically or accessibly deconstructed.

There are constant new demands for risk transparency, which is not readily available. There is lack of confidence in risk measures generated which do not objectively vet corporate profitability. Consistently we find there is lack of a truly enterprise wide, end-to-end stakeholder view of vulnerability to events.

In our view, the basic issue is this: everything in the Enterprise has been able to be managed as commoditized entities with the exception of risk. What Risk Architecture allows is the transparent commoditization of risk, to any stakeholder, and especially to the ultimate stakeholder, the average citizen.

We are able to show where resources used to measure wrong risks may be wasted resources, and the missing risks not measured are the ones that stress the Enterprise.

We define the Enterprise as any legal entity with a measurable stake in the outcome of the business of Enterprise. Our definition of 'legal entity' is any recognized unit of participation of the Enterprise in its smallest context, subject to the influences and rules of the environment of the Enterprise in its largest context.

Interoperable Architectures for Enterprise Risk Management

The ultimate goal of Risk Architecture is enabling the Enterprise achieve "end-to-end" risk transparency by accurately commoditizing risk. Commoditization is the process of making a product into a commodity; a commodity is a product that is indistinguishable from others like it, causing decisions to purchase to be based mostly on the price. Improper commoditization of risk is the major cause of Enterprise failure.

The discipline provides the methodology to accomplish that, by identifying basic risk elements, risk metrics, controls, assessments, analytical techniques and methods, by near real time disclosure and reporting, addressing policy, surveillance, backtesting and other feedback aspects required for various levels of transparency.

Each Enterprise is different, and each aspect of the Enterprise presents risk. Risk can never be eliminated it can only be shifted and offset. The resources required to analyze and track the best strategies become prohibitive, especially in environments where the business is the system, and the system and business are changing at accelerated rates. Systemic and operational drivers, and hence risk are often mistaken for the business, and vice versa.

By approaching this with with Reference Models we are able to include management of other key enterprise initiatives within our Risk Architecture, such as productivity, performance measurement, process re-engineering, change management, IT infrastructure, security and assurance and IT asset management.

Architectures driven by integrated Reference Models

The foundations of Risk Architecture are based on underlying principles collectivized into three components: and Enterprise Reference Model, a Risk Reference Model and an Architecture Framework. The conceptual key to the integration is our breakthrough approach, a topology of meta-metrics proprietary to our practice.

Technically we accomplish this by using model driven architectures which generate blueprints and specific metrics for all enterprise infrastructure. The sub-collection of models include enterprise risk context, unified risk and financial models (including asset-liability management and capital allocation). These are described in further detail at our sister web presence at RiskBlueprint.com.

Our Risk Architecture practice utilizes architecture and risk tools, acquisition and measurement techniques based on applications within knowledge management, risk analytics, hybrid evolutionary computing and others.

Our approach, using model driven architectures and frameworks, is business and platform independent, and may be used across various Enterprises and Sectors, with scaling. This dramatically reduces implementation time, regardless of the maturity level of existing risk and IT programs.

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