ITS 835: Comparative Analysis of ERM Implementation Models

This report delves into the realm of Enterprise Risk Management (ERM), specifically examining the implementation of PM2 Risk Scorecard and ISO 31000. It argues for the adoption of PM2 Risk Scorecard due to its capacity to introduce novel initiatives and its robust weighing method, which ISO 31000 lacks. The report highlights the limitations of ISO 31000, particularly its inability to support programs and initiatives crucial for organizations with diverse talents. A comparative analysis is presented, showcasing the advantages of PM2 in terms of risk comparison, program effectiveness, and the impact of initiatives on strategic objectives. The report also suggests integrating both models to leverage their respective strengths. The context includes a case study of the City of Edmonton, which highlights the importance of ERM in linking strategic objectives and the need for comprehensive approaches for population well-being. The report emphasizes the need to remove budgeting issues during the initial ERM phases and the importance of a well-defined implementation process.

Running head: ERM IMPLEMENTATION 1
ERM Implementation
Name
Institutional Affiliation

ERM IMPLEMENTATION 2
ERM IMPLEMENTATION
Even though PM2 Risk Scorecard remains complex or challenging to implement, it is
regarded as a powerful tool which can enable unrestricted organizational expansion. This tool is
characterized by a part of a vast process which has not only programs but also novel initiatives
within an organization (Neves et al., 2015). Each organization would prefer changing a tool for
ERM or Enterprise Risk Management due to specific reasons. One of the shared reasons for such
a change is to introduce a novel initiative which shall assist in solving its current problem. I
suggest that the Company should implement PM2 Risk Scorecard because it will provide the
desired opportunity for innovative initiatives’ introduction (Fraser, Simkins & Narvaez, 2014).
Though ISO 31000 is easy to implement, this tool never allows for the introduction of
novel initiatives. Moreover, ISO 31000 lacks programs, thus can never be utilized when
employees and people have diverse talents. ISO 31000 will be useful in a private organization
that is run by a few individuals and do not need either initiatives or programs. ISO 31000 cannot,
therefore, support significant processes (Ibáñez et al., 2016). Moreover, the ISO 31000 never
supports a systematic process because no tie exists between one process and the other. The
comparison between the two methods can be illustrated below:
The PM2 model is recommended because it has various simple undertaken in sequence,
thus producing a powerful outcome. Such results include risk comparison, current program

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effectiveness, and the impacts of future initiatives on the strategic objective achievement. It will
thus quickly help the ERM team to show the leaders the steps and make sure they comprehend
the concept of buy-in to model (Fraser, Simkins & Narvaez, 2014). PM2 square risk scorecard
will remain useful because of the robust weighing method, which is lacking in ISO 31000.
Moreover, as seen in the above table, PM square risk scorecard have programs as well as
initiatives which are both lacking in the ISO 31000. Despite being a complicated model than ISO
31000, PM2-square risk scorecard in terms of implementation, it is still a good model because
the ISO 31000 standards might still fall short of addressing this shortcoming.
In my opinion, I will recommend that the firm base its ERM on PM2 Risk Scorecard as
opposed to ISO 31000 because the former tool uses a weighing method which can significantly
maximize the profit for the firm (Fraser, Simkins & Narvaez, 2014). However, it will be useful
to integrate the two models so that each one offsets the disadvantage of the other model. The city
will significantly benefit by preferring comprehensive approaches for its population wellbeing.
By preferring an ERM and connecting it to strategic objectives, the city will have certainly
created a model for itself and remaining cities around the globe. A potential area for
development is to enhance the ERM strategy being followed since it necessary to remove the
budgeting issues during the first ERM phases (de Oliveira et al., 2017).

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References
de Oliveira, U. R., Marins, F. A. S., Rocha, H. M., & Salomon, V. A. P. (2017). The ISO 31000
standard in supply chain risk management. Journal of Cleaner Production, 151, 616-633.
Fraser, J., Simkins, B., & Narvaez, K., (2014). Implementing enterprise risk management: Case
studies and best practices. New Jersey: John Wiley & Sons, 12(2), 12-67.
Ibáñez, A. J. P., Bernal, J. M. M., de Diego, M. J. C., & Sánchez, F. J. A. (2016). Expert system
for predicting buildings service life under ISO 31000 standard. Application in
architectural heritage. Journal of Cultural Heritage, 18, 209-218.
Neves, A. A. S., Pinardi, N., Martins, F., Janeiro, J., Samaras, A., Zodiatis, G., & De Dominicis,
M. (2015). Towards a common oil spill risk assessment framework–adapting ISO 31000
and addressing uncertainties. Journal of environmental management, 159, 158-168.