Just as astronomers tell us that our universe is expanding, the same can be said of risk profiles for companies in all industries. Take Reed Elsevier, a large global publisher of science and health information, for example. "Our risk profile is wide and varied," says Marion Houghton, risk manager at Reed Elsevier, "but it's also intangible. We don't have much exposure to 'traditional' risks like fire and theft and auto, but we do have exposures to risks around intellectual property, for example, or even risks to our business model for paid subscriptions to our scientific and technical publications."

As part of the group's risk management team, Houghton sought a risk management information system (RMIS) to automate and enhance the depth in risk reporting. The ultimate goal was to better analyze, prioritize and act on the most significant exposures.

Improving risk assessment

Semiannual risk assessments are a cornerstone of risk management, and the company has historically used a sophisticated spreadsheet model.

"We ask managers in our businesses to consider, review and compile a list of their risks, which they derive from what we call a risk universe, or register," Houghton says.

As with any risk assessment, Houghton notes, "We rely on the experience and judgment of our management. At the same time, we saw a need to augment our risk management program with a scientific approach to identifying and tracking risk companywide."

Drudgery out, thinking in

According to Houghton, the selection criteria when choosing a RMIS included simplicity and ease of use. "In most cases, our risk champions are not full-time risk managers, so we have to be realistic about how much time they can devote to the assessment process."

In developing the RMIS, one of Houghton's key goals was to make the risk assessment process more fulfilling. "Releasing time for those facilitating the risk assessments to do the clever work, the critical thinking, and to really apply their skills and knowledge, is very important," she says.

Enter RiskConsole and the new Risk Register module. Among the tool's many efficient capabilities, Risk Register's ability to streamline the recording, consolidation and reporting of tasks was a particular draw to Houghton. "[The tool] eliminates the drudgery of operating a complex database and working directly with data," she says.

Embedding action-oriented risk management

According to Houghton, making risk management more action-oriented was a central goal. By deploying Risk Register, the company can track over time the progress being made in addressing each risk entered in the system. "After all, risk management is about trying to reduce the risks and not just recording them and saying what you're doing about them," Houghton states. "The whole point is to make sure risk management is embedded in the business, and we're now making risk assessment and control a living process."

Flexible, customized development

Houghton has worked closely with her Aon eSolutions account manager, Ross Ellner, as well as Aon eSolutions IT developers to create an RMIS tailored to the company's needs. Risk Register is now poised to roll out to the 10 to 15 global risk champions, as well as to Houghton's risk management colleagues.

"Since the implementation began, I've realized that RiskConsole could do so much more than I first knew. From the beginning, the step-by-step development process allowed me to choose the things we wanted, change our minds when we needed to and see the results quickly," she notes. "The process has been quite flexible, and I like the way we've kept in touch all along."

Keeping pace with ideas

Houghton expresses satisfaction with development of the system thus far. "I would recommend RiskConsole and the Risk Register module," she says. "The product has kept pace with our ideas."

In looking to the future, Houghton says, "I can definitely see RiskConsole and Risk Register developing further, because the more you realize what you can do, the more you tend to challenge what you've got. Although I don't yet know precisely what it is we'd like to do in the future, we have established a good foundation with Aon eSolutions to deploy future functionalities."