Essent Netwerk
Essent Netwerk + Sword GRC
How Essent Netwerk was able to process up to 10 times more risks using software
INDUSTRY
Energy
LOCATION
Netherlands
The Background & Challenge
Essent is an energy company that specialises in the generation, transport, trade-in and supply of gas and electricity.
Essent Netwerk BV is responsible for Essent’s gas and electricity distribution network in the Netherlands which covers about one-third of the market. Essent Netwerk manages the risks of an asset base of more than six million assets with the help of Active Risk Manager.
Risk management is an integral part of the energy distribution business. Every high voltage network is designed with redundancy built in so that in the event of a failure it will still operate. The secret is to find a balance between the cost of mitigation of potential failure and the benefits that the extra investment provides.
The solution has more than a 90% overlap with our process and way of working – so it was a natural choice
Why Active Risk Manager?
Because of the constant expansion of the network the decision was made to look for a system to control the increasing number of risks. Essent Netwerk selected Active Risk Manager from Sword GRC as it is a complete enterprise risk management solution and its structure mirrored Essent’s existing method of working.
According to Ype Wijnia, “It was almost as though Active Risk Manager had been specifically written for Essent. Our risk process complies with the PAS 55 Standard used by other major energy networks and developed by the Institute of Asset Management. It defines a certain number of steps and all of those are found in Active Risk Manager. The solution has more than a 90% overlap with our process and way of working – so it was a natural choice.”
Essent Netwerk has found that Active Risk Manager has provided a number of benefits in terms of quality, speed and cost savings in the management of asset and enterprise risk.
Quantification of Asset Management
For the first time, Essent Netwerk now has the ability to perform quantitative analysis over the risk position and this drives further quantification of the asset management process. In the business case for investment, the non-financials like the quality of supply and safety have always been monetized to facilitate proper cost-benefit analysis. Prior to Active Risk Manager, it was difficult to establish whether the risk prediction was accurate or whether risks were being overestimated.
Tests now show that predictions based on the risk register are accurate and the investment required to deal with a specific level of risk can be planned accordingly. This means that Active Risk Manager has improved the quality of risk assessment for investment proposals by taking into account a more accurate level of risk.
According to Ype Wijnia, “We now have a way of recording the real problems and the risk associated with them. This means that development plans can be challenged and improved with a focus on what is really important. While this was happening in the past on the basis of discussion and experience we can now share the information with a much wider number of people as Active Risk Manager is a web-based solution. Decisions are now more balanced because of that.”
During our meetings, we are now able to process up to ten times more risks than before.
Speeding up Risk Management
A further advantage of Active Risk Manager has been the ability to speed up the risk management process. While the same number of risks are being identified on a daily and weekly basis as before, Essent Netwerk now has the ability to process them faster, therefore, avoiding backlogs and allowing more analysis and planning.
Ype Wijnia said, “During our meetings, we are now able to process up to ten times more risks than before. This is a major difference and is very beneficial as we now have time to discuss and analyse the situation in more detail. In fact, we have saved on headcount costs as the same number of people were able to process any backlog and stay entirely up to date.
We have been able to manage more risks with fewer people and while we now have two extra full-time equivalent staff this is because we want to extend the use of Active Risk Manager to a more detailed level.”
Sword Active Risk hosts ARM
Ype Wijnia concluded, “Risk management now has a far more mature status within Essent Netwerk. The software is hosted by Sword GRC; this means we do not require local IT resources and has enabled us to get into a production environment with a complete data history on the system two months earlier than we had hoped.
We will be increasing the number of Active Risk Manager users to around 100 within the next twelve months, as we expand its scope into other types of project management outside of asset management.
Active Risk Manager has certainly improved the ability to manage risk within Essent and made communication across the organisation much easier and faster. We look forward to realising further benefits from Active Risk Manager.”
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