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Conceptual Understanding


Every operation experiences risk, but few operations have effective systems for managing the wide variety of risks they experience. Many organizations use isolated departmental spreadsheets and local databases to capture and manage data. These isolated programs create many redundancies and can result in fiefdoms that threaten an organization's mission and purpose. Some organizations use specialized systems managed by different departments or functions competing for limited resources. Unfortunately, these systems compound risk and increase the cost of risk administration.

Active Agenda is designed to work as an integrated system whereby different departments utilize common systems to mange different functional risks. It can also be used by individuals interested in improving their personal job performance. Active Agenda's utility is maximized when people share information and collaborate across an enterprise. An implementation of Active Agenda can be introduced as a pilot project within a single department, as conceptualized in our 1998 article  The Hidden Agenda, or as an enterprise risk management program.

The operative idea behind Active Agenda is very pragmatic and simple: Collect more data, in order to better identify, understand, and address problems. This may seem like an obvious concept, but it is not a common practice. This is especially true when it comes to the topic of health and human safety, and to the related goal of reducing operational loss. In fact, many workplaces use programs, measurements, or business processes that inadvertently reduce the amount of data collected about workplace risk. Collecting data using an integrated and transparent system like Active Agenda can result in an immediate increase in data (Truth Spike), but this spike should be viewed as a tremendous opportunity. Meaningful and sustainable performance improvement is only possible when performance data is known, honest, shared, and acted upon. The effectiveness of this simple data model has been documented in our founders' articles   CAUTION, Beware of OSHA Statistics and   Beware the Disconnect. These articles address safety in the workplace, but the data model applies across business functions.

Current systems for these purposes are usually cumbersome (paper-driven, bureaucratic) or improvised (personal spreadsheets and/or databases). They are often disconnected (each being confined to a particular department or location), and reporting is often manual and therefore slow. Commercial software products do exist, but they tend to be overly specialized and fail to solve similar problems occurring in multiple departments.

Active Agenda is a general-purpose risk management database and collaboration platform. It addresses a staggering number of topics. It is highly customizable to suit the needs of any particular organization. Information is highly cross-referenced at the detail level, yet can be summarized, charted, and analyzed in a myriad of ways.

Every organization manages risk!

All operations have risk. Our founder began conceptualizing Active Agenda in 1995 while working as a Risk Manager for The Häagen-Dazs Company. He was confronted with a rapid increase in legal mandates and a lack of systems available for making compliance possible. How do organizations experience risk? They have people, products, processes, practices, property, and they interface with our environment. All of these present the potential for loss and represent uncertainty.

Active Agenda makes managing risk much easier and more effective, but it wasn't designed to enable management shortcuts. Active Agenda requires implementing organizations to enter the things that represent risk before they can begin to associate controls with those risks. This design can be very frustrating when people want to jump in and start entering data, only to discover that their data must be associated with something that represents risk (i. e., a building, a person, an injury, a vehicle, a written compliance program, a job title, etc.).

Active Agenda's design methodology allows an organization to view risk control activities and participation in a centralized way and eliminate the discontinuity of disjointed programs and risk control practices. A "quick study" of the Hazards will be helpful to reinforce this important design consideration and is encouraged before data input begins.

Insurable AND Uninsurable Risk

A risk that can be transferred to a third party is considered an insurable risk. Organizations purchase insurance to cover these kinds of risks. Unfortunately, many of the risks an organization faces are uninsurable. Worse yet, most of the systems available for managing risk are offered by the insurance industry, an industry focused on claims mitigation (after-the-fact) and the investment of your insurance premiums (the more, the better). Active Agenda helps organizations manage insurable and uninsurable risk.
Image I am very proud to have thoroughly evaluated and even been able to raise points of interest to the Active Agenda Risk Management web app development. The app is everything I have been complaining we didn't have already when working for major brokers.
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Active Agenda is scalable, highly customizable and benefits from decades of experience in the field.

~ International Account Executive
AON and Gras Savoye in France


Uninsurable risks are those where the potential for loss is too high or where the insurance is considered illegal, criminal, or prohibited by public policy. Losses considered to be inevitable are also uninsurable.

A variety of organizations publish annual reports on the Total Cost of Risk. The Total Cost of Risk is generally accepted to be based on the following categories:
  • Insurance premiums,
  • Retained losses,
  • Internal administration,
  • Outside services,
  • Financial guarantees,
  • Fees, taxes, other.

These publications are generated by insurance associations and completely disregard the enormous cost of risk associated with uninsurable risks (e.g., regulatory compliance). Active Agenda allows you to capture the Total Cost of Risk by integrating the process of managing insurable and uninsurable risks.

Active Agenda Benefits

Active Agenda's ultimate purpose is to help organizations reduce their Total Cost of Risk. Active Agenda does this by improving risk management efficiencies, measuring and managing culture, streamlining compliance, and improving business continuity. We like to simplify Active Agenda's benefit statement by grouping its operational benefits into four categories: Compliance, Continuity, Cost, and Culture.

Compliance

Active Agenda was originally designed as a compliance product. Our design process focused on compliance with occupational safety and health laws. As design progressed, so did our business experience. Within several years we began to witness the redundant programs and processes used to address regulations emanating from a multitude of agencies and industries. These observations changed our development approach to focus on systems integration as a means of achieving better results at a reduced cost.
Image With simple words it looks like a best practice for the universal risk management. My area (banking) is more smaller, I'm checking now which modules are valuable for me - interesting thing, but it seems to be that except very Image special areas (i.e. chemical, transportation) the modules are generic enough to use in financial institution's OpRisk management(external link).

~ Banking Professional, Hungary

We soon began to apply a simple litmus test. We explored regulatory requirements of many agencies and a variety of industries. We asked ourselves what underlying business rule was being mandated by the respective agencies. We then explored whether the business rule was common to other regulatory requirements of other agencies governing other business functions. If the underlying business requirement resulted in a redundant business process, we set out to develop a single system capable of complying with each of the agency mandates. The result, to date, is over one hundred integrated business processes.

Continuity

Image Active Agenda has saved me hundreds of hours(external link) of research and report generation. It has also eliminated the dozens of spreadsheets I have historically created for agency reports. The opportunity for retention of "corporate knowledge"
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is perhaps the greatest virtue of Active Agenda
for any organization.

~ EHS Professional, Manufacturing, US

Business continuity is a difficult challenge for most businesses. The typical approach to creating business continuation plans is to generate a large document which outlines key actions to be taken in the event of business disruption. The problem with this approach is that the resulting document is quickly outdated, rarely reviewed, and less frequently put into practice. Active Agenda helps companies build business continuity into the day-to-day business process.

Cost

Active Agenda is a powerful tool to help an organization reduce its "Total Cost of Risk." The Cost of Risk (CoR) concept dates back to 1962 when Douglass A. Barlow, a past president of Risk Insurance Management Society (RIMS), originally formulated the method for capturing and trending risk costs. The concept was formalized by the Institute of Management Accountants and RIMS with the publication of a standard of management accounting statement titled Practices and Techniques: Internal Accounting and Classification of Risk Management Costs.

That statement defines risk management costs as applying to three exposures: property, tort liability, and occupational disease or injury. Within these three exposures are six types of costs: insurance premiums; retained losses; internal administration; outside services; financial guarantees; and fees, taxes, and other similar expenses. Active Agenda is designed to utilize Barlow's cost of risk concept and extends its use to other business risks such as operational efficiency, labor relations, product quality, and other operational risks.
Image I believe that you have developed an impressive RAD tool(external link) as a side product of Active Agenda. Functionally it is similar to Oracle Application Express and APEX is a big success for Oracle. In my opinion Active Agenda is better because the framework allows reusing whole blocks of knowledge in different projects. Maybe it would be even worth to split the project Image into technology platform project and domain knowledge platform (your primary goal as I believe). I could imagine that the technology platform could attract a lot of more developers to Active Agenda and allow new revenue models.

~ Software Developer, Poland


Anyone analyzing the Total Cost of Risk would be remiss if they ignored the costs (a.k.a. RISKS) of proprietary software vendors, and overworked IT departments, on the risk management process.

Risks evolve quickly. Systems for tracking and managing risk must evolve in lockstep. Unfortunately, no matter how much organizations tout the high level of priority placed on risk control, budgets seldom match the propaganda. Risk control professionals are often placed at the end of the IT queue and often hear "We are not supporting any new software this year." Active Agenda places you in control of a highly iterative process capable of keeping up with new and evolving risks.

Culture

We believe adversarial business cultures substantially increase risk control costs. We have managed complex risks for major corporations and one thing has consistently helped us to substantially reduce loss costs - a positive, proactive, business culture.
Image My team (5 analysts) has struggled for weeks with it (alternative technology) to get a simple "proof of concept" app up that mocks what is essentially a single module I created in AA within a couple hours, and of Image course I didn't have to create the tables manually first. Solid app and the obvious choice of platform for any risk manager looking to establish a culture of collaboration and transparency.

~ PACS Administrator(external link), Healthcare, US

Loss costs are directly influenced by an industry feeding on conflict between employers and their employees. This industry is made up of attorneys fueling conflict and broking loss dollars (on both sides of the issue); doctors more interested in providing forensic medical opinions than providing treatment; and a parade of transcribers, stenographers, claims adjusters, interpreters, investigators and others with a vested interest in the ongoing conflict between employers and employees. Active Agenda can help organizations create an environment of Us (Employee and employer) vs. Them (the system).

Many of Active Agenda's modules will appear strange to traditional safety practitioners busy managing the 3 E's of Industrial Safety: Engineering, Education, and Enforcement. Over fifty years of risk control experience, and reproducible results, have led us to incorporate culture into Active Agenda's design for managing and mitigating loss costs.




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