#5 Using the wrong approach to measure, analyze, and report performance and risk
The good news is that there are plenty of great software packages available today, to assist firms with all aspects of their performance and risk measurement. The bad news is that there is no one “best” system, nor is there a system that works well with every organization’s needs. Consequently, investing money in a system that fails to do the right job is a waste, or at least a partial waste.
Too many firms use spreadsheets for “systems,” and in general this is not a good idea: there are exceptions, but they are few.
Producing reports that fail to provide the information needed, or failing to take an inventory of what is being used and what isn’t, is a waste of resources.
All firms should periodically assess where they stand, from a systems and operational perspective. Is the firm using the right measures? Do the reports contain the right information? Are the processes smooth, with the appropriate controls? Is there unnecessary redundancy, in processing or systems? Are there more efficient ways to operate?
Some firms have moved to or are considering outsourcing part or all of their performance and risk measurement process. One can debate the appropriateness of this, but the reality is that many firms find benefits in taking these steps. Even these, though, are worthy of occasional reviews to ensure they are meeting the firm’s needs.