Bringing the Strategy Process and Risk Management Under the Same Umbrella
VEO Group is an energy expert company offering electrification and automation solutions for its clients. More than 95% of VEO’s revenue comes from renewable energy projects or projects that increase energy efficiency or reduce energy usage. Headquartered in Vaasa, Finland, VEO also has subsidiaries in Sweden, Norway and the UK. VEO Group employs 450 people in total and had a turnover of EUR 124.8 million in 2021.
Interviewed for this case article was Kim Råholm, Development and HSEQ Director at VEO Oy.
Energy and electricity: Demanding projects, complex risks
VEO Group primarily serves the energy sector and heavy industry, providing electrification and automation solutions pretty much anywhere where electricity is involved, or energy is transferred from one place to another. The company also provides monitoring and protection services to ensure safe and efficient use of energy.
Quite understandably, risk management plays a significant role in VEO’s operations, with several different levels of risk management being considered. Overall, VEO takes a comprehensive approach to risk management in order to ensure the successful and safe implementation of their solutions.
In its projects, VEO monitors both operational and financial risks and opportunities.
At the corporate level, strategic and business risks, operational and financial risks, health and safety risks as well as sustainability risks are being considered. In all sessions, also opportunities are always considered.
VEO also incorporates risk and opportunity management processes to its strategy process.
Cooperation with Inclus: Reconsidering the strategy process and its support tools as the starting point
As VEO was updating its strategy, they were also looking to renew the strategy process. They were searching for tools that could support both the strategy work and risk and opportunity management. They came across Inclus that managed to meet both needs with its hybrid approach, especially as the tools to support the strategy process were slightly customized to match VEO’s specific needs.
“We essentially managed to bring two important processes under the same umbrella; strategic planning and implementation, and risk and opportunity management”
Kim Råholm, Development and HSEQ Director at VEO
VEO currently operates two workspaces in Inclus for risk and opportunity management at the corporate level; one for enterprise risk and opportunity management (ERM) another workspace for identifying and managing occupational health and safety risks (HS) at the company level.
The third Inclus workspace is for project-specific risk and opportunity management and it covers the biggest projects; the most valuable and complex ones out of the 500 or so projects annually that VEO conducts for its clients. The fourth Inclus workspace is for the strategy management.
The project risk workspace in Inclus was piloted in 2022, and in 2023, new big projects will be kicked off directly through Inclus. Looking ahead, Råholm is excited about the prospect of having the entire portfolio of big projects in Inclus, enabling in-depth analysis and benchmarking between projects.
Describing a typical VEO project from risk management’s perspective
“The project risks and opportunities are identified already in the sales phase”, says Kim Råholm and continues: “Content-wise, for us there is no such thing as a typical project as all projects are different; the decisive factor from our risk management’s perspective is almost purely financial. The larger the project, the bigger the risk impacts and more probably we will bring it to Inclus and start identifying and assessing the related risks there.”
VEO has collected a standard, high level list of typical risks involved in a complex project that helps sales and project management in assessing the risks already in the sales phase and proposing accordingly. The actual identification and detailed assessment of risks will be project teams daily work. Project risks are assessed by the project team regularly and reported to management on a quarterly basis.
“Inclus works very well for our needs; we can easily engage our stakeholders to contribute to the project risk assessment with an email prompt, allowing them to voice their potential concerns and viewpoints in the system”, Kim Råholm explains.
“For instance, we have just now had more than 40 people, representing all personnel groups and locations, contributing to our occupational health and safety risk assessment, and our HS manager goes through the assessments with the participants in smaller work groups analyzing the results and making action plans to mitigate or minimize the identified HS risks.”
Kim Råholm, Development and HSEQ Director at VEO
Råholm specifically points out that Inclus supports the risk management process in a very practical manner, “since it’s always a big hassle to start looking for a joint calendar slot for a large number of stakeholders”.
Instead, through Inclus the stakeholders can be involved from one central point, allowing them to take up tasks at their own convenience. Inclus also sends reminders to those who haven’t completed their tasks, saving time and trouble for the project and risk management.
Adopting Inclus as part of VEO’s strategy and risk management processes: What has changed?
One year on from VEO’s decision to adopt Inclus as part of their work processes, we discuss how it has impacted the everyday life at VEO, and how the tool has been received in the organization.
In the strategy and corporate workspaces, strategy and corporate risk management are handled in parallel, and the status of implementation is monitored on a quarterly basis. PESTEL analysis has already been brought to Inclus and it works nicely. SWOT analysis will also be introduced to deepen the strategy management.
In the corporate workspace, reputational risks etc are being monitored. For instance PESTEL could be placed here, too, yet the tagging functionality will ease the visibility in the future of each item across relevant workspaces.
The Group management team is encouraged to also engage their teams in giving feedback on the identified risks, adding to the visibility and inclusivity of Inclus throughout the organization.
In addition, Kim Råholm lists out a number of things at a general level that VEO have observed:
Getting rid of the manual hassle with excels, word documents, many different places where the risk management related data used to be stored. Now everything is neatly stored and accessible in one place.
Involving people! Earlier, trying to get stakeholders’ input to project risks, it was always a calendar management challenge and used up a lot of time. Now everything can be easily handled from one central place and people can participate in their own time.
Systematic and uniform way of documenting and reporting about risk management and especially strategy and its implementation.
Consolidation of data. This is a global trend that risk management professionals drive all around the world.
Structure in risk management has been a big step forward. Reaping all the benefits is still ahead of us but improved structure alone is a remarkable thing.
Development of identified risks and opportunities provides valuable insight when easily seeing how well earlier identified mitigation actions have decreased the impact of the risks.
When asked about whether he could single out any one functionality that has been particularly valuable in Inclus for VEO Group, Råholm concludes: “There’s no single feature or functionality that in itself would be more valuable than others; the bulk of the value of Inclus really comes from its efficient support to our entire process of managing our strategy implementation and the related risks.”
Kim Råholm
Development and HSEQ Director