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Tuesday
Jun122018

GAB Forum: Applying Analytics to Enterprise Risk Management

We were thrilled to welcome Tom Brandt, Chief Risk Officer at the IRS, to this month's Government Analytics Breakfast Forum.  Mr. Brandt gave a talk titled Applying Analytics to Enterprise Risk Management (ERM): Opportunities and Challenges.

Mr. Brandt begain with an overview of the top risks the IRC faces, namely (1) aging technology infrastructure, (2) cyber and data security and (3) critical staffing shortages.  Notably, these are the same top risks faced by many agencies across the federal government and by state governments. 

The IRS has developed a Risk Apptetite Statement, which outlines its risk management perspective and goals.  The statement notes that the IRS recognizes "that risk is inherent to the operation of any organization" and it is committed to managing this risk using analytic approaches.

As part of ERM, the IRS has identified the different types of risk it must evaluate and mitigate, such as reputational risk and operational risk.  As part of its risk management strategy, the IRS continously monitors social media to determine the public's attitude toward the agency and specific areas that could be improved, such as the filing and refund processes.

One major challenge the IRS faces in managing risk is acquiring relevant data from other agencies.  Sometimes the IRS could benefit from data gathered by a different agency, but it has encountered difficulty obtaining that data.  This is a government-wide problem.  The Social Security Administration, for example, should not be making payments to imprisoned felons, but the agency has sometimes struggled to obtain relevant data from law enforcement agencies.  

Overall, however, the IRS has found that using a variety of analytic approaches has been tremendously helpful for identifiying and minimizing risks.  The agency uses, for example, health checks, crowdsourcing, gamification and disruption analytics to identify, measure and visualize risk for key decision makers in the agency.

A recording of the talk can be viewed here.

Please join us for our next talk in October (data TBD).  The tentative topic will be the use of analytics to address the opiod crisis.

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