SAP Risk Analysis


What Is Risk Analysis?

Risk analysis is the assessment of potential risks on the business or market and the likelihood of adverse effects from those events. In a supply chain context, for example, companies model various disruptions to determine their impact and apply risk mitigation strategies to avoid them.

According to Investopedia, risk analysis can be divided between two types: qualitative and quantitative.

Qualitative analysis: Qualitative analysis incorporates a definition of uncertainties, evaluation of the potential impacts, and risk mitigation measures. Examples include SWOT analysis and cause and effect diagrams.

Quantitative analysis: Quantitative analysis relies on statistical modeling and assigning numeric values to potential risks. Within a risk model, those values produce graphical outputs to help determine risk mitigation strategies.

Through both risk analysis approaches, companies can glean an holistic view of their risk profile.

What Is Risk Analysis?

Risk analysis is the assessment of potential risks on the business or market and the likelihood of adverse effects from those events. In a supply chain context, for example, companies model various disruptions to determine their impact and apply risk mitigation strategies to avoid them.

According to Investopedia, risk analysis can be divided between two types: qualitative and quantitative.

Qualitative analysis: Qualitative analysis incorporates a definition of uncertainties, evaluation of the potential impacts, and risk mitigation measures. Examples include SWOT analysis and cause and effect diagrams.

Quantitative analysis: Quantitative analysis relies on statistical modeling and assigning numeric values to potential risks. Within a risk model, those values produce graphical outputs to help determine risk mitigation strategies.

Through both risk analysis approaches, companies can glean an holistic view of their risk profile.

SAP and Risk Management

As more companies migrate to SAP S/4HANA, it’s critical that their risk strategies are integrated within the system. SAP provides risk management solutions that put governance, risk, and compliance at the forefront of business activities.

According to SAP, “stakeholders want to see evidence, on demand and in real time, that an organization which they are backing is managing their financial, social, and environmental activities efficiently, profitably, and responsibly … Any risk management measures must focus on the specific value drivers unique to the business, and these can be difficult for you to identify. Managers must look beyond financial line items to the activities and processes that are integral to the organization’s business model.”

Further Resources for SAPinsiders

Building More Effective Access Control Through Business-Centric GRC. In this article, learn how companies are utilizing access control solutions to identify risk within their user base. These solutions and processes are often technical and driven from audit and IT perspectives with very little input from business users who might find the technical GRC language hard to decipher. That’s where the idea of business-centric GRC comes into play for access control — providing the business with easier to understand, less technical language so that they can better interpret the data.

Application Security Imperiled by Attackers. Application security is being threatened by cyberattacks on the application layer, such as SAP S/4HANA systems, which target valuable resources organizations store there. In this article, learn about new security concepts necessary to protect the “crown jewels” stored in SAP systems. Companies need to deploy real-time detection and response to deal with the rise in attacks against the SAP application layer level.

Vendors that can help SAP customers with risk analysis include: Appsian Security, DXC Technology, EcoVadis, and Onapsis.

807 results

  1. Perform Risk Analysis Using a Point-Based Scoring Method for Probability and Impact

    Reading time: 16 mins

    A risk is basically any event that can prevent executive management from meeting the defined business goals of an organization. Learn how to perform risk analysis using a simplified score-based concept that involves numeric-centric evaluation. Key Concept Risk management is the identification, analysis, and prioritization of risks followed by the optimal use of resources to…...…
  2. Increase the Success Rate of Your Strategies and Initiatives through an Enterprise Risk Management System

    Reading time: 13 mins

    Many risk managers complain about a lack of enterprise insight and alignment of risk management to the strategic objectives of their organization. With a rather manual and inconsistent approach based on emails and spreadsheets, they often fail to oversee the impact of risks to the strategic goals and whether appropriate risk responses were implemented to…...…
  3. Conduct a Workflow-Driven Risk Analysis Across Your Enterprise and Tune It to Your Business Needs

    Reading time: 12 mins

    Become acquainted with the third of the five-phase enterprise risk management (ERM) process: risk analysis. Step through the configuration to customize the risk analysis to your business needs. Learn how a risk analysis is initiated either directly by a responsible risk owner as a scheduled workflow task or by a key risk indicator (KRI) showing…...…
  4. An Introduction to SAP Predictive Analysis and How It Integrates with SAP HANA

    Reading time: 57 mins

    In this exclusive report, take a walk into the world of SAP Predictive Analysis and how it ties into SAP HANA and SAP Lumira (formerly known as SAP Visual Intelligence). Learn the importance of general predictive modeling concepts, and then apply those concepts as part of a bigger discussion about the architecture and features of…...…
  5. A Guide to SAP’s Credit Risk Analyzer

    Reading time: 45 mins

    SAP’s Credit Risk Analyzer sub-module focuses on measuring, analyzing, and controlling counterparty risks. Learn how to use and configure it. Key Concept The Credit Risk Analyzer includes a risk control through limits and flexible limit management with online monitoring and reporting. This functionality allows corporate executives to set limit controls in their SAP systems, monitor…...…
  6. Prevent False Conflicts with Supplemental Rules in SAP Access Control

    Reading time: 32 mins

    SAP Access Control provides you with the option to create a supplementary rule. The rule gives additional information to prevent a false conflict in a segregation of duties (SoD) risk analysis report. Learn the steps you need to complete to enable the supplementary rule. Key Concept A supplementary rule for segregation of duties (SoD) risk…...…
  7. Dodd-Frank Act: Standardize Risk Management Processes with SAP BusinessObjects Risk Management 10.0

    Reading time: 17 mins

    Ensure that your enterprise’s risk management procedures comply with the Dodd-Frank Act’s requirements pertaining to the management of systemic risks by using SAP BusinessObjects Risk Management 10.0. It supports the five phases of risk management. Key Concept The Dodd-Frank Act was signed into law in July 2010 in response to the 2007 US financial crisis…....…
  8. Gauge a Company’s Risk Exposure Using Market Risk Analyzer

    Reading time: 31 mins

    Learn how to implement SAP’s Market Risk Analyzer. The analysis reports in Market Risk Analyzer help an organization or, more specifically, a treasury department, to assess and quantify the risks of its financial positions. Once the risks of an organization are analyzed and quantified, they can be more easily controlled. The inputs to Market Risk…...…
  9. Harness Risk Threshold Definition to Drive Ad Hoc Risk Escalation

    Reading time: 17 mins

    Kehinde Eseyin shows how to configure, create, and process ad hoc risk escalations using SAP Risk Management 10.1. Key Concept Risk threshold is a reflection of the amount of risk an organization is ready to tolerate. Because risk threshold can be defined at the organizational unit level based on specific metrics, such as size, revenue,…...…
  10. Combine SAP Strategy Management and GRC Risk Management for Risk-Intelligent Strategic Execution

    Reading time: 22 mins

    In most organizations, strategic management and risk management are completely separate processes. As a result, it’s often difficult to track strategic goals over time while assessing the risks that might affect strategic initiatives. With an integrated approach to strategy and risk management, you can ensure that business owners are focusing on the right initiatives both…...…