@Risk

Supply chain failures continue to plague companies worldwide.

A recent study conducted by the Business Continuity Institute (BCI) found that a full 85 percent of the companies surveyed recorded at least one supply chain disruption in 2011. Interestingly, 40 percent of those disruptions originated further down the supply chain, past first tiers suppliers.

The research, which analyzed responses from more than 550 organizations across more than 60 countries, also revealed that: (more…)

How much are operational inefficiencies costing your business?

A new survey from Accenture and Clearstream found that the financial services sector could save more than €4 billion (about $5.5 billion) annually in collateral management costs by addressing operational inefficiencies.

Clearly, collateral management has become a critical industry issue because 1) regulators have set more rigorous capital and liquidity standards, and 2) banks are confronting new cost and growth challenges in the wake of the global financial crisis.  Done right, however, efficient collateral management can free up liquidity for banks, enabling them to meet new regulatory requirements while offering more products and services.

According to the Accenture survey, banks’ key collateral management challenges include:

• An incomplete view of all collateral and an inability to manage holdings centrally
• Suboptimal internal governance leading to a misalignment of objectives
• Inadequate internal transfer-pricing mechanisms
• A lack of optimization engines or the ability to deploy them effectively
• Inability to perform inventory projections
• Excessive staff costs as a result of process complexity

The highest potential cost savings, according to survey respondents, can be achieved by: (more…)

Economic activity in the non-manufacturing sector was up again in August, marking the 21^st consecutive month of increases.

The Non-Manufacturing ISM Report On Business, issued this week by the Institute for Supply Management (ISM), showed that:

• The Non-Manufacturing Index registered 53.3 percent in August, 0.6 percentage point higher than the 52.7 percent registered in July, and indicating continued growth at a slightly faster rate in the non-manufacturing sector. (A reading above 50 percent indicates the non-manufacturing sector economy is generally expanding; below 50 percent indicates the non-manufacturing sector is generally contracting.)
• The Non-Manufacturing Business Activity Index decreased 0.5 percentage point to 55.6 percent, reflecting growth for the 25th consecutive month, but at a slower rate than in July.
• The New Orders Index increased by 1.1 percentage points to 52.8 percent.
• The Employment Index decreased 0.9 percentage point to 51.6 percent, indicating growth in employment for the 12th consecutive month, but at a slower rate than in July.
• The Prices Index increased 7.6 percentage points to 64.2 percent, indicating that prices increased at a faster rate in August when compared to July.

According to the NMI, 10 non-manufacturing industries reported growth in August. The list (in order) : (more…)

Corporate risk management has moved up the corporate agenda and is now considered a key to competitive advantage, according to a new report by Accenture.

Among the 397 executives participating in the 2011 study, 80 percent said that the increasing volatility and complexity of the economic and financial environment have elevated the importance of risk management as a key management function. In addition:

• 85 percent reported that risk has become a driver of competitive advantage for their company.

• Nearly half (49 percent) believe that corporate risk management will enhance the likelihood of long-term profitable growth for their company. About the same number (48 percent) said it will support sustainable future profitability.

Unfortunately, though, companies remain unprepared for today’s risky business environment –despite considerable investment in risk management capabilities.

More than half (52 percent) of the survey respondents said their individual company has invested $25 million or more since 2009 to improve risk management capabilities, and one in 10 said their company’s investment has exceeded $250 million. But, a whopping 83 percent said additional investments would be made in risk management in the next two years as their companies navigate market volatility, manage increased complexity and address a proliferation of risks, including: (more…)

How confident are you in the effectiveness of your compliance functions?

If you’re like many of the business leaders recently surveyed by PwC US and Compliance Week, you may be a bit uncertain about exactly how you want to answer that question.

PwC US and Compliance Week polled senior compliance officers at more than 100 leading US companies, asking them questions about four key areas critical for the compliance function: leadership, reporting relationships and structure; compliance function scope, focus and risk; metrics to gauge program effectiveness; and budget, staffing and resources.

When the results were analyzed, the survey showed that one of the biggest obstacles facing Chief Compliance Officers (CCOs) is measuring the effectiveness of their compliance functions.  In fact –as remarkable as it sounds –nearly 40 percent of the companies surveyed said they make no attempt to measure the effectiveness of their compliance program.
(more…)