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Calculating potential benefits of risk avoidance

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  • #24599

    Tierradentro
    Participant

    I work for a large insurance company.  Many of our large corporate projects are required for compliance reasons or to avoid some large but unlikely risk (such as financial or insurance fraud).
    I’m curious how companies quantify potential benefits of these projects in order to justify them in a corporate project portfolio.  For instance, perhaps we’ve never been fined or encountered fraud so we have no historical basis for the calculation.  How would you calculate the benefits for a pre-project CBA or for post-project benefits realization?
    Thanks.
    – John

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    #59006

    Cost of doing business
    Participant

    FYI, the attached link may be of interest to answering your question
    http://www.theage.com.au/news/business/compliance-spend-a-missed-opportunity/2005/10/18/1129401255150.html

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    #59005

    Cost of doing business
    Participant

    If these are truly compliance driven projects, the projects should be counted as costs of doing business. They become those famous “Nike Projects” that the financial industry has to live with because of government regulations … a good thing for consumer protection!

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    #59007

    Cost of Risk
    Participant

    Some ideas on how to calculate costs of risk  avoidance based on discretionary vs. compliance projects.
    http://www.unix.org.ua/orelly/networking/puis/ch02_03.htm

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