t are quantifiable and easily monitored both with and without computers. As a result, the finance department has been able to present the risks associated with a project from a strictly financial standpoint and because of the quantifiable nature of those risks, can make an excellent case for whether a particular project will be on-budget or not. However, the finance department can only consider financial risks, and nonfinancial risks-which will also directly affect the budget of a project-might well be overlooked. Thus, if the procurement department knows that the key supplier is facing an obsolescence issue on a part, the project actually has far greater risk to the overall organization. The risk of traditional risk management is that key information can be left out of the risk analysis when considered from an enterprise rather than departmental perspective. Thus it is not surprising that risks go unidentified and when they are realized, the organization is forced to react quickly and without the resources that would help formulate a more effective response (Mishkin & Eakins, 2008).
The events of September 11, 2001, have revealed the most extreme tragic consequences of a silo approach to risk management. Although various criminal justice departments within the federal government-including the FBI and CIA-had information that might have led to the plot being discovered and thwarted, the lack of communication among these groups prevented effective management of the risk. Enterprise risk management involves far more than just co-ordination among departments, but such co-ordination provides a strong first step that can help mitigate risk for the organization as a whole (Walker, Shenkir & Barton, 2002).
As already noted, enterprise risk management does more than just co-ordinate the risks identified by various departments. Instead, enterprise risk management seeks to provide "a comprehensive and integrated fram...