What are the three levels of Operational Risk Management (ORM)?

Operational Risk Management (ORM) is a critical process that helps organizations identify, assess, and mitigate risks associated with operational activities. The three levels of ORM—In depth, deliberate, and time critical—reflect the varying degrees of complexity and urgency involved in risk management processes.

The in-depth level represents a thorough analysis of risks, often involving detailed considerations and well-planned approaches to risk management. This level is usually applied in situations where there is ample time to assess risks comprehensively and to develop strategies that support effective risk mitigation.

The deliberate level is used when there is a more calculated approach to operational risks. This stage involves planning and preparing to handle risk but does not require the extensive analysis necessary at the in-depth level. Here, decision-makers consider the risks that might occur during operations and prepare their responses accordingly.

Lastly, the time-critical level addresses situations where immediate action is required due to the pressing nature of risks that arise suddenly. This level requires rapid decision-making and response strategies to mitigate potential negative impacts on operations swiftly.

These three levels of ORM articulate the varying contexts and time constraints under which organizations operate, allowing for flexible and adaptive risk management strategies tailored to specific situations. This framework is vital for enhancing an organization’s resilience and effective response to operational challenges