Your company is in the area of Enterprise Risk Management (ERM). I think I know what risk management is. I don’t see why we need to put ‘Enterprise’ before it.
I think we do – and in fact what’s happening is that companies are now starting to do to risk management what they did with resource planning, supply chain, HR and financials – they know these are all business areas that can only really be tackled effectively by working on them at an enterprise, and indeed enterprise-wide, level.
But we’ve had risk management software and approaches around since God was a boy. Are you claiming you’re doing something new here?
Very much so. There is as you say an existing class of software out there that does a form of risk management support. But what it actually does is just provide a tick-box for compliance-oriented risk management. We do something different; we work on collecting data from right across the organisation that gets aggregated up to provide an analytics engine so that senior management can get a picture of where the company really is. We call this ‘Arm,’ our Active Risk Manager, the first real enterprise-wide risk management tool that works with real, live data.
Well, tell us a bit more about the organisation behind Arm then we’ll dive down into these claims.
Of course. Arm has been on the market since 2001 and that’s when things really started to take off for us. We’re now an AIM listed company, expanded into Europe then the US and is now getting into the Asia Pacific market in a very successful way. We opened an office in the US in 2004 and already have customers there including NASA, the US Air Force and Northrop Grumman, while we also have Rio Tinto, Nestle, Crossrail, Westinghouse, and the London Olympics as customers – 170 all told. We are being contacted by genuinely global brands on a daily basis as we really do offer something else no-one else is. In financial terms, for our last full financial year we saw total revenues climb 36%, to £8.24m.
So what is the STG ‘garage’ story – where did all this come from?
We started as a very conventional consulting company down in Maidenhead that was helping corporates with what we used to call ‘Mission:Impossible’ level, really intractable issues and out of such an engagement a client suggested that if we could make a program out of our methodology we’d really have something. That was good advice and we took it and since 2004 we’ve been reaping the results – I think we are a genuine British success story, to be honest, which is why I joined the company. [Barker had previously spent 20 years at PricewaterhouseCoopers where he became Head of the Consulting Services division and was a member of the PwC main board, sat on a key advisory panel for public sector productivity reporting to the UK Prime Minister and Chancellor and is a former UK government trouble-shooter on major public risk issues.]
I do really hate it when companies claim to be totally unique as they almost always aren’t and/or that means they are irrelevant to most people’s needs; a market of one player is not a market.
Sorry, I should have been clearer. We do very much have a competitor and its name is Microsoft.
Oh, Microsoft has an ERM product? I didn’t know that.
No – I mean Excel. We are always coming into scenarios where corporates have been struggling away with information amassed by hand in a very unstructured way into multiple spreadsheets. We are the best alternative to that.
Time for us to focus back on the application itself then. What is wrong with risk management packages our readers will be more familiar with, then?
There’s nothing wrong with them but they are not powerful enough for the kind of problems CFOs and CEOs are now facing. The risks they are worried about aren’t to do with compliance any more, they are to do with – and I don’t want to go all Donald Rumsfeld here – the unknowns they don’t know about. They need to know on a daily basis now where they are with their working capital, cost of capital, profit margin. It’s not the classic compliance issues that kill companies but the risks that come out of nowhere that you haven’t planned for. That’s the worry that is keeping CEOs up at night and that’s where we help. And it’s going to be the CIO, working with the Board or the Chief Risk Officer, who will be key to making that enterprise-wide risk management vision become a reality, as he did with ERP and all the rest.
