Cisco Systems Inc. is the world leader in networking for the Internet. Founded in 1984 by a small group of computer scientists, the company now has more than 48,000 employees worldwide, with a tradition of innovation that is evident in its approach to using information to make risk-management decisions.

Leslie Lamb, Cisco Systems global risk manager, has been with the company for six years. She recently spoke with us about Cisco's decision to implement Aon RiskConsole in 2004.

ONE: What drove Cisco's decision to implement a risk management information system (RMIS)?

Leslie Lamb: Our intention was to get a strong understanding of our total cost of insurable risk. We wanted to get a picture of our total claims, insurance premiums and deductibles, as well as broker and claims management fees.

One of the hot discussion topics within Cisco is our "risk appetite." How much of a deductible do we want to take on? In order to make those informed decisions, we need to make sure we have the best available data within easy access. RiskConsole is the mechanism to consolidate and convert that data into useful information that enables us to make critical decisions.

ONE: How extensively is RiskConsole used throughout the company?

LL: RiskConsole is currently being used by more than 20 people around the world, all of whom are based within our risk management, logistics and litigation groups. We'll be expanding the application into our Asia-Pacific region shortly. RiskConsole has been implemented to support 83 currencies.

ONE: What types of losses are you tracking in RiskConsole?

LL: Our logistics group tracks all cargo losses with RiskConsole, whether the loss is below the deductible or not. As a result, we can clearly see how much of a loss we're experiencing.

We track auto claims and our vendors supply loss data that is then captured within RiskConsole. Our largest auto exposures result from auto rentals, so our vendor partners provide us with that data. Workers' compensation claims also are loaded into RiskConsole on a monthly basis.

Finally, our legal group uses RiskConsole to track specific litigated claims. This enables us to measure our attorney's performance and the cost of legal fees.

ONE: How does RiskConsole influence change within Cisco?

LL: Our supply chain encompasses both manufacturing and logistics. There are areas within our supply chain that need to share information—it may appear that they are separate areas within the company, but they are really connected. Part of our goal is to use RiskConsole to help facilitate the connection between the manufacturing and logistics divisions. This connection will help to identify the cause of losses so we can develop plans to reduce them.

ONE: Besides the claims module, how else is Cisco using RiskConsole?

LL: With the help of our RiskConsole client service team and Aon brokers, we've recently implemented the policy module. We have a fairly complicated insurance program, and the challenge was ensuring we represented it correctly within the system so that it made sense when we ran reports. Having our policy, premium and brokerage fee information all in one place was one of our original goals in implementing a RMIS.

We thought capturing policy information was an important area on which to focus. It is not just the claims that get paid out, but also what we are paying out in premiums and fees to protect the corporation. We are now in a position to easily identify both.

ONE: Has Cisco made changes in its risk management approach since implementing RiskConsole?

LL: RiskConsole has allowed us to capture Cisco's total cost of risk and to be able to slice and dice our loss information in many different ways. We will be able to use this information to better understand where our major risks are coming from and where to focus our mitigation and loss-prevention efforts.