|
Measuring operational resilience effectively poses significant challenges for auditors due to the qualitative and multifaceted nature of resilience.
Subjectivity in Resilience Definition
- Facing the reality that "Resilience" can mean different things to different organisations and stakeholders.
- Defining what constitutes resilience in the context of an organisation might involve subjective judgments and varying perspectives, making it challenging to create a universally applicable measurement framework.
Quantification of Resilience
- Translating the qualitative aspects of resilience into quantitative metrics or measurable indicators is complex.
- Attributes like adaptability, agility, or robustness—integral to resilience—are challenging to quantify in concrete terms.
Lack of Standardized Metrics
- More standardised metrics or benchmarks must be needed to assess operational resilience across industries or sectors.
- Each organisation might have unique factors influencing its resilience, making creating a one-size-fits-all measurement framework challenging.
Dynamic Nature of Resilience
- Resilience is not static; it evolves based on changing risks, strategies, and organisational adaptations.
- Static measurements might need to capture the dynamic nature of resilience more effectively.
Interconnectedness of Factors
- Various factors contribute to resilience, including technology, human resources, supply chains, and regulatory compliance.
- Understanding the interplay between these factors and their collective impact on resilience requires a comprehensive and holistic approach.
Effectiveness of Response and Recovery Strategies
- Evaluating the effectiveness of response and recovery strategies involves assessing their implementation and actual impact during real-life disruptions.
- Predicting how well strategies will perform in unforeseen scenarios can be challenging.
To address these challenges in the measurement of Resilience:
- Develop a customized measurement framework
- Tailor the measurement criteria to fit the organisation's specific context, risks, and priorities. This might involve collaboration with stakeholders to define and prioritize resilience indicators.
Focus on Qualitative Assessments
- Instead of relying solely on quantitative metrics, incorporate qualitative assessments, such as scenario analysis, stress testing, and maturity assessments, to gauge the organiSation's resilience.
Iterative and adaptive approach
- Recognise that resilience measurement is an ongoing process.
- Review and refine measurement methodologies regularly to adapt to changing risks and organisational dynamics.
Utilize a combination of leading and lagging indicators
- Use a mix of predictive indicators (leading) and historical data (lagging) to assess the proactive measures taken and the organisation's past performance in managing disruptions.
Measuring operational resilience effectively remains a challenge, but through a nuanced and adaptive approach, auditors can develop robust methodologies that provide valuable insights into an organisation's ability to withstand and recover from disruptions.
Summing Up ...
Addressing these challenges often requires a multidisciplinary approach involving collaboration across various departments, access to updated information, leveraging technological solutions for data analysis, and continuous adaptation to emerging threats.
Flexibility and agility in audit methodologies are crucial to assess and enhance an organisation's operational resilience effectively.
| Types of Challenges Faced by OR Auditor and Reviewer |
|
|
|
|
|
|
|
|
|
|
|
|
Find out more about Blended Learning ORA-5000 [BL-ORA-5] & ORA-300 [BL-ORA-3]
|