Operations Risk Management and Mitigation

Risk and Crisis Management October 25, 2025
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Introduction

This essential course is designed for professionals who manage and oversee core business processes and operational continuity. **Operations Risk Management (ORM)** focuses on mitigating risks arising from internal process failures, people, system failures, or external events impacting day-to-day activities. Participants will learn how to map critical business processes, identify control gaps, and implement robust operational controls and testing methodologies to ensure resilience. The curriculum moves from theory to practical application, enabling the design and implementation of an effective ORM framework that protects both efficiency and regulatory compliance in core operations.

Objectives

Upon completion of this course, participants will be able to:

  • Establish a comprehensive framework for Operations Risk Management (ORM) aligned with business continuity goals.
  • Map and analyze critical business processes to identify inherent operational risks and control weaknesses.
  • Design and implement effective operational controls (preventative, detective) across key process areas.
  • Master the use of **Key Risk Indicators (KRIs)** and **Loss Event Data** for proactive monitoring.
  • Apply the principles of "Three Lines of Defense" to operational risk accountability.
  • Develop and lead **Control Self-Assessment (CSA)** programs for departmental risk ownership.
  • Manage and mitigate specific risks related to process execution, IT failure, and human error.
  • Integrate ORM practices with compliance requirements (e.g., regulatory, financial reporting).

Target Audience

  • Operations Managers and Supervisors
  • Business Process Owners and Analysts
  • Risk and Control Self-Assessment (RCSA) Leaders
  • Business Continuity and Resilience Planners
  • Internal Audit and Compliance Officers focused on operations

Methodology

  • Group Business Process Mapping and Risk Identification Workshops
  • Case Studies on Major Operational Risk Failures (e.g., trading, processing errors)
  • Design and Critique of Control Self-Assessment (CSA) Questionnaires
  • Individual Key Risk Indicator (KRI) Selection and Reporting Exercises
  • Discussions on the Implementation of the Three Lines of Defense

Personal Impact

  • Mastery of a structured, preventative approach to managing operational failures.
  • Ability to identify and close control gaps in critical business processes.
  • Enhanced professional credibility in supporting business continuity and compliance.
  • Improved decision-making through proactive monitoring using KRIs and loss data.
  • Stronger collaboration skills with audit, compliance, and IT teams.

Organizational Impact

  • Reduced frequency and impact of process errors, system failures, and fraud losses.
  • Improved compliance and regulatory standing through robust control environments.
  • Enhanced business resilience and quicker recovery from operational disruptions.
  • Clear accountability for risk management embedded within operational departments.
  • More accurate measurement and forecasting of operational risk exposure.

Course Outline

Unit 1: The Foundations of Operations Risk

Framework and Accountability
  • Defining Operational Risk and its sources (People, Process, Systems, External Events).
  • The importance of the **Three Lines of Defense** model in ORM.
  • Aligning ORM with Business Continuity Management (BCM) and Enterprise Risk Management (ERM).
  • Understanding the regulatory landscape and operational risk reporting requirements.
  • The role of the operational risk committee and management reporting structure.

Unit 2: Process Mapping and Risk Identification

Process Analysis
  • Techniques for mapping end-to-end critical business processes (BPMN standards review).
  • Identifying inherent operational risks at each stage of the process lifecycle.
  • Conducting Failure Mode and Effects Analysis (FMEA) for process breakdown.
  • Developing a comprehensive **Loss Event Data** collection and analysis process.
  • Using scenario analysis and near-miss data to anticipate high-impact operational risks.

Unit 3: Control Design and Control Self-Assessment (CSA)

Mitigation and Testing
  • Principles of effective control design (preventative, detective, and corrective controls).
  • Implementing automated vs. manual controls and managing their effectiveness.
  • Methodology for conducting **Control Self-Assessment (CSA)** and risk ownership.
  • Designing and documenting key operating procedures to embed risk controls.
  • Testing the design and operating effectiveness of critical operational controls.

Unit 4: Monitoring and Proactive ORM

Metrics and Indicators
  • Defining, selecting, and implementing **Key Risk Indicators (KRIs)** for early warning.
  • Establishing risk thresholds and triggers for mandatory escalation and action.
  • Developing operational dashboards and reports for continuous risk monitoring.
  • Analyzing trends in loss event data, errors, and control failures.
  • Managing operational technology risk and control over automated processes.

Unit 5: Human and System Factors

Behavioral and Technology Risk
  • Managing human error risk through process design, training, and supervision.
  • Addressing ethical lapses and conduct risk in operational processes.
  • Mitigating risk related to legacy systems, technical debt, and data integrity.
  • Developing incident response protocols for operations-related disruptions.
  • Integrating ORM findings into continuous process improvement and automation initiatives.

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