“Key” word implies that there cannot be hundreds of KRIs; so if you have 100+ KRIs, then most likely these are just risk metrics. Key Performance Indicators The 2019 EY GISS (Global Information Security Survey) speaks of three fronts that organizations need to progress on. Both management and boards regularly review summary data that include selected KPIs designed to provide a high-level overview of the performance of the organization and its major operating units. JEL Classification: C53, M10. Doesn’t it look like a KRI now? In this way you will implement risk control into the company’s DNA. Key performance indicators (KPIs) are widely used in the insurance industry to measure the health of important business processes. It clarifies some confusing ideas about KRIs and offers insight on their role in a risk management framework. A Risk Indicator can be qualitative (for example: a site monitor’s assessment of site quality) or quantitative information that is used to monitor identified risk exposures over time, and are in… Introduction: Enterprise Risk Management (ERM) represent the authority that is dealing with uncertainty for the enterprise. What is risk and how can one measure and control it? Sign up for our email newsletter to be notified when we produce new content. There should be a buy in from the team, etc. “Net profit is a KPI because it doesn’t tell us anything about the risk level or risk control!” – often suggest authors. Number of Servers Experiencing Hardware-related Performance Issues Within the Last 90 Days – The number of servers that have experienced hardware-related performance issues during the last 90 calendar days as a percentage of total servers operated by the company. Most of the principles that we discussed for KPIs (Key Performance Indicators) apply to KRI: Percentage of System/Application Downtime Caused by Inadequate Server Capacity – The amount of system downtime, or service interruption time, that was caused specifically by insufficient capacity (i.e., requests/transaction load directly caused failure) as a percentage of total unplanned downtime within the measurement period. Key risk indicators are metrics used by organizations to provide an early signal of increasing risk exposures in various areas of the enterprise. 73. Number of Network Outages Attributed to Internet Service Provider – The number of network outages that can be attributed to the company’s Internet Service Provider (ISP), rather than an internal source, during the measurement period. The key to an effective records management system rests in unlocking the strengths of each area as well as integration to serve the needs of the organization and meet regulatory requirements. Process modeling and diagnostic tools to identify improvements and automate processes. Importance of Key Risk Indicators (KRIs) ... Director, Enterprise Risk Management at ConEdison, Inc. based in New York, about Key Risk Indicators(KRIs). Percentage of IT Projects Reworked Due to Misaligned Requirements Within the Last 90 Days – The number of IT projects that, within the last 90 days, required re-scoping or re-prioritization due to business requirements that were not clearly defined, or were not sufficiently reviewed by key stakeholders prior to project launch as a percentage of total IT projects running. There have to be a person responsible for KRI. Number of IT Projects Canceled After Kick-off Within Last 6 Months – The number of IT projects that were cancelled at some point following the initial project startup due to lack of alignment with corporate strategy or planning over the last 6 months. Below, we discuss how the users of BSC Designer can track their KRIs. Records Management Risk Key Performance Indicators (KPIs) From creation to disposition, records in electronic recordkeeping systems may now utilize a variety of media. Percentage of Applications Running without a Current Service Level Agreement – The number of applications currently running on company workstations or devices that are NOT governed by an explicit, documented service level agreement (SLA), which states the parameters and standards of service to be delivered by the application, as a percentage of all applications currently running. Insurance companies regularly use their KPI measurements to benchmark themselves against competitors and identify best practices in other segments of the financial services industry. Overdue project tasks / crossed deadlines. Percentage of IT Assets (Devices) Impacted by End-of-Life or Support – The number of devices managed by the IT Department that are slated to be impacted by upcoming end-of-life (EoL) or end-of-support (EoS) dates. Network Availability – The amount of time (measured in minutes) that the company’s network is available for use by all authorized users divided by the total amount of time the network is scheduled to be available for use over the same period of time, as a percentage. IT Budget Variance (Actual vs. Total Number of Critical System Backup Failures – The total number of critical system backup processes that failed (i.e., did not run, were not captured in-full, were captured with errors, etc.) Percentage of Network Devices Not Meeting Configuration Standards – The total number of network devices (modems, routers, switches, etc.) Schedule variance (SV) 69. Whatever the purpose, KPIs are powerful tools for measuring the progress and direction of an organization. Percentage of Workstations that have Not Received a Full Malware Scan Within Last 24 Hours – The number of workstations that have not undergone a full, successful virus scan with that last 24 hours as a percentage of total active workstations managed by the organization. Cost variance (CV) (planned budget vs. actual budget) 68. Number of Firewall Reviews Conducted – The total number of formal firewall configuration reviews conducted by IT team members during the measurement period. Area definitions, KPI examples and common job titles for a variety of industries. An emergency change is a previously unplanned change to systems or applications that must be implemented immediately, or as soon as possible, to avoid a serious security risk, productivity loss, and/or service interruption. to complete or run properly during the measurement period. That person (or persons) is usually the expert in the records lifecycle and in how to maintain and protect privacy and data. I’d say that the pair of “probability” and “impact” indicators form the KRI. KRIs are not that different from KPI; Risk Management frameworks are not that different from the Balanced Scorecard. In this step you look at what you need to measure in order to assess progress toward a given objective. Number of Disputes with IT Vendors – The total number of formal disputes that took place between the company and IT-related vendors over the last 3 months. There has been much debate in recent years regarding the role of key risk indicators (KRIs) in risk management. Operational risk is defined as the risk of loss resulting from inadequate or failed internal processes, people and systems, or external events. Key risk indicators (KRIs) are defined as a quantifiable measurement used by bank management to precisely and accurately evaluate the potential risk exposure of a certain activity or process and how it will impact various areas of a financial institution using models and mathematical formulas. Cost performance index (CPI) 71. The key to the system can be the records manager, the professional responsible for records management within an organization. Develop or hire information management professionals: Without qualified and experienced professionals, information management will be limited in its impact on your organization. As an example of a typical KPI that is not a KRI that is often used is “Net Profit.”. Percentage of Firewall Rules Added or Changed Within Last 90 Days That Were Formally Documented – The number of changes to firewall rules that were applied to the company’s firewall (across all firewall applications/systems in use) that were formally documented according to the company’s policies/procedures as a percentage of total firewall rule changes applied within the last 90 calendar days. When reading, replace “KPI” with “KRI” and you can easily use all the same ideas and recommendations. Planned value (PV) 65. While the action plan indicator relates to the risk control procedures. In an operational risk context a risk indicator (commonly known as a key risk indicator or KRI) is a metric that provides information on the level of exposure to a given operational risk which the organisation has at a particular point in time. Total Number of IT Assets Current Not in Use – The total number of IT assets owned by the organization that are currently (i.e., at the point of measurement) not used in any capacity by the organization. Think of KRIs as an early warning system, like an alarm that goes off when the company’s risk exposure exceeds tolerable levels. Number of Instances Where Systems Exceeded Capacity Requirements – The total number of instances (i.e., a specific point in time) where systems exceeded the pre-defined capacity threshold, measured in transactions or requests per second, within the measurement period. Average Page Load Time – The average amount of time (in seconds) required for the user’s browser to full load a web page within the company’s website, from the time the click occurs until the web browser has loaded the page in full. Percentage of Mobile Devices that have Not Received a Full Malware Scan Within Last 24 Hours – The number of mobile devices that have not undergone a full, successful virus scan with that last 24 hours as a percentage of total active mobile devices managed by the organization. The thing is that “Net profit” by itself doesn’t tell us either anything about performance or the way one wants to increase it! In addition, you will find for sale two items, a handbook for sale with an even larger list of 120 KRIs, and a key risk indicator benchmarking report. It differs from a key performance indicator in that the latter is meant as a measure of how well something is being done while the former is an indicator of the possibility of … Another thought that supports the idea of the similar nature of KRIs and KPIs: Well, I’m exaggerating, but I personally don’t see any fundamental difference. Key risk indicators (KRIs) help with monitoring and controlling risk. They can be automated with the strategy execution software that you are using. Number of Unused Firewall Rules – The total number of firewall rules (across all firewall applications/systems in use) that were found to no longer be in use during formal or informal firewall rule reviews conducted during the measurement period. Percent Difference in MTBF (Monthly) – The difference in Mean Time Between Failure (MTBF) from month-to-month for the group of systems being examined, measured as a percentage. To make a use of “Net profit” we need to put it in a proper business context, add thresholds, baseline, and target marks, and add some relevant action plan: Have a look at this KPI! Let’s start the discussion about Key Risk Indicators best practices. Rich describes KRIs and how they can be used to give management an early warning that there is a developing risk issue that needs to be addressed. Risk indicators are still indicators. Percentage of Critical System Backups that are Not Fully Automated – The number of critical systems without an automated (i.e., no manual work required) backup currently configured and running accurately as a percentage of total critical system backups (automated and manual). In this way, KRIs help you to monitor risks … Percentage of Mobile Devices Not Running Updated Anti-Malware Controls – The number of mobile devices managed by the company that are not currently running fully up-to-date anti-malware protection as a percentage of active mobile devices managed by the organization. A key risk indicator (KRI) is a metric for measuring the likelihood that the combined probability of an event and its consequence will exceed the organization's risk appetite and have a profoundly negative impact on an organization's ability to be successful. This metric may also be known as “Patch Coverage Rate.”. IT Service Provider SLA Adherence – The number of IT vendor service level agreements where the vendor has met or exceeded targets outlined in their corresponding Service Level Agreement (SLA) over the last 3 months as a percentage of total vendor, or service provider, activities and performance levels are governed by a formal SLA. Overview Key Risk Indicators (KRIs) are critical predictors of unfavourable events that can adversely impact organizations. COVID-19: Business Continuity Strategy (Template), BSC Designer – Strategy Execution Software. 16. % of … These measurements inform management of a company’s technology and business risk profile and can be used to help investigate and improve operations where attention is needed. Managing risks is about managing the chain of: Normally, we cannot map all these aspects of the risk in one KRI, so we will normally need 3 indicators: For example, for such KRI as “Poor mentoring of employees” we would have: Which of those indicators is a KRI? Planned hours of work vs. actual situation . Percentage of Applications Requiring Functionality Upgrade Within the Last 90 Days – The total number of applications used by the company that required an upgrade related to user experience/usability within the last 90 calendar days. The risk assessment model that was described above is nothing new, but you need it just as you need a strategy map in business performance management. These reports often are focused almost exclusively on the historical performance of the organization and its key units and operations. As it comes from the definition of the risk in ISO standard, the ultimate decision of what is and is not a risk depends on a company’s objectives, so be careful when copying KRIs from others. Key risk indicator examples are defined as previously used or researched illustrative measurements of risk that can installed and tracked to lower the risk profile in a company or business process. KRI’s are able to assist businesses reduce loss and prevent exposure by indicating changes in risk profiles and proactively manage risk situations before they occur. Percentage of System Changes Not Mirrored on Backup Systems Within 24 Hours Following Launch – All Systems – The number of system changes that were successfully launched to the live environment that were not mirrored on backup systems within 24 hours following the successful launch as a percentage of total changes successfully performed during the measurement period. Course agenda Pricing & Registration. risk metrics commonly known as key risk indicators (KRIs). Percentage of IT Projects Delayed – The number of IT projects that are NOT completed before or on their initial planned completion (i.e., delayed projects) date as a percentage of total IT projects completed over the same period of time. When implementing key risk indicators, businesses often do not have a frame of reference to begin picking the most important KRIs for their company – use the list of KRI examples below to determine what areas of information technology pose a risk to your business operations today. Recent big headline data breaches of customer data include; Target in 2013, Experian in 2017, and now Facebook in 2018. Actual cost (AC) 66. 1. In our recent survey, KRIs were identified as one of the next major areas of research and investment for operational risk management departments. Percentage of Systems in Use that are No Longer Supported – The number of systems currently in use by the company that are no longer supported by the original developer as a percentage of total systems used by the organization at the same point in time. Establish a culture similar to one in NASA: if the problem appeared once, they conducted a careful research about possible reasons why it happened; even if it did not repeat. Does it belong in legal services, management … Percentage of Scheduled Maintenance Activities Missed – The number of scheduled maintenance activities related to company devices (workstations, network equipment, servers) that did not take place on or before their scheduled date as a percentage of all maintenance activities scheduled to occur over the same period of time. For now, it is enough to define KRI as those risk metrics that are an important part of your risk management portfolio. To business lines managers, they may help to signal a change in the level of risk exposure associated with specific processes and activities. Properly described strategy looks very similar to the properly done risk and control assessment. that were found not to be in compliance the company’s pre-defined configuration standards as a percentage of total network devices under management at the same point in time. It combines indicators that allow estimating risk probability, risk impact, and risk control actions. Vendor disputes may arise due to poor vendor performance, payment issues and/or project scope misalignment (i.e., scope “creep”), among other things. In the free BSC Designer account, you have access to several risk scorecards with a total of 89 KRIs. They allow you to benchmark and monitor the health and progress of your Records Management Programme. Key Risk Indicators are a metric type indicator developed to improve management’s position to handle events that may arise in the future in a timely and strategic way. An insurance claims department might focus on fraudulent claims KRIs, while an IT project management team might worry about server redundancy to measure and avoid system downtime risk. These non-supported systems may also be considered “legacy” systems. “Key” word implies that there cannot be hundreds of KRIs; so if you have 100+ KRIs, then most likely these are just risk metrics. Here comes an interesting part. It’s much better than regular formal reporting of KRIs that has nothing to do with real problems. With the rapid advancement in business systems, practices and procedures must be established to guide public and private entities through the potential minefield of electronic records management issues. 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