Business Challenge

To steer clear of business risk, Continental needed to gain insight into areas of exposure across its subsidiaries worldwide, and to come up with effective ways to mitigate the threats.

Transformation

Equipped with IBM OpenPages GRC, Continental is performing efficient, broad-scale risk assessments across its worldwide operations, and take effective steps to reduce exposure.

Results

Drives

effective and efficient risk management across the global business

75% fewer

risks assessed at Corporate Level, as minor threats are addressed lower down

Consolidates

six risk management processes and four systems into a single solution

Business Challenge Story

Steering a major enterprise

Large companies are exposed to diverse risks—from currency fluctuations to product recalls and natural disasters. To reduce business risk, leading automotive supplier Continental aims to gain an overview of exposure across its worldwide subsidiaries, then introduce effective measures to reduce the threats.

Sebastian Witte, Head of Projects and Risk Management in the Corporate Controlling department at Continental, begins: “We assessed global risk exposure twice a year in different legacy systems and processes by asking each reporting unit to evaluate its own risks, and report them to a central controlling function.

“We saw several opportunities for improvement in our existing process, especially concerning efficiency and standardization. In addition, we wanted to integrate the existing tools into one single solution. Building on that, we aimed to further improve our risk management culture via the implementation of a new solution.”

To manage risk more effectively and efficiently across its booming and complex organization, Continental realized that it needed to find a solution.

IBM OpenPages is helping us to measure, monitor and reduce risk across our global enterprise effectively and efficiently.

—Sebastian Witte, Head of Projects and Risk Management, Corporate Controlling, Continental

Transformation Story

Getting systems into gear

After evaluating solutions from several vendors, Continental decided to deploy IBM OpenPages Governance, Risk and Compliance software. To drive a smooth implementation, the company engaged IBM.

Sven Fleischer, IT Project Manager at Continental, recalls: “Across all subsidiaries, we sell a huge range of products—such as tires and automotive components for many types of vehicles. Due to the complexity of our product range, some departments report to different business units, which can cause challenges in terms of reporting. During the Request for Proposal [RFP] process, it became clear that IBM can cope with all those challenges.

“IBM and its partner Pentos helped us make sure that OpenPages was the right fit for our business, demonstrating how it could fulfill each of our requirements. IBM provided expert advice in designing our new approach to risk management, and making sure it would suit our business needs. We were very happy with the support we received from IBM and Pentos.”

First, Continental conducted a pilot, from which it received valuable end-user feedback that was incorporated into the final application before rollout. Where necessary, IBM and Pentos customized the solution, for example to enable the generation of special reports. Midway through the implementation, when a new version of OpenPages was released, the IBM and Pentos team helped Continental upgrade to the latest software release before go-live. As the project neared completion, Continental gave training sessions for its worldwide user base regarding the new solution, with assistance from IBM.

After the go-live, IBM and its partners provided second- and third-level support for the OpenPages application. The IBM team opened a hotline and captured reports about OpenPages from Continental’s general IT ticketing system, helping to ensure that problems were resolved rapidly.

Sven Fleischer continues: “Whenever we encountered problems, we received prompt support from IBM and its partners to resolve the issue. Less than a year after deployment, we have built up sufficient resources to manage the application in-house.”

Choosing a comprehensive solution like OpenPages helped Continental consolidate six different risk management processes and four systems into a single platform for efficient management. Today, Continental manages a broad set of risks—operational, financial, compliance, legal and quality-related—using the OpenPages solution and is even able to link them to existing cases (risks that turned into reality).

As before, the company relies on bottom-up risk assessments. First, consolidation units—such as plants and locations—create their own risk assessments in OpenPages, which are signed off by a local risk officer. A comprehensive risk library in OpenPages helps users to categorize risks and submit their reports in a standardized manner, with separate areas for quantitative and qualitative risks.

Next, the consolidation units send their assessments to the relevant business unit, which must review and approve the consolidation units’ input, and conduct its own risk assessment. The process continues as such up five layers of the organizational chart, with each of the layers given two weeks to complete its duties. Finally, the assessments are sent to the central controlling function, which compiles and verifies the data. Using the integrated IBM Cognos® reporting in OpenPages, the team generates a final report on global risk exposure for senior management.

To ensure that important factors are taken into account, Continental defines compulsory risks which all departments must consider and include in their assessments. The controllers conduct tests to verify the accuracy of the self-assessments—and if they find that the risks have been underestimated, they adjust scores accordingly.

We were very happy with the support we received from IBM.

—Sven Fleischer, IT Project Manager, Continental

Results Story

Driving effective risk management

The new approach is helping Continental to manage risk efficiently and effectively.

Sebastian Witte remarks: “When completing the assessments, employees in worldwide subsidiaries select from pre-defined risk categories, rather than having to choose their own categorizations. This approach makes assessments more straightforward for our user base, and ensures that the documentation is standardized.

“Since the new OpenPages solution has replaced multiple processes and tools, it helps our global operations to fulfill their risk management duties efficiently. We gain a clearer view of global exposure, so we can improve our risk control measures to protect our business. The introduction of local reviews and approvals has been a big success in improving quality.”

Sebastian Witte continues: “We are also sharpening focus on substantial risks. By raising awareness of what constitutes a significant risk, we have reduced the number of risk factors that teams report on by around 60 percent. Further irrelevant risk factors are filtered out up the organizational chart, so by the time the reports reach central controlling, there are 75 percent fewer risk factors and we can complete our reviews much faster.”

Continental is currently fine-tuning its process to drive effective, efficient risk management across its business. In future, the company can choose to take advantage of cognitive solutions such as IBM Watson Analytics™; for example, to automatically classify risks into the correct categories, reducing the scope for human error.

Sebastian Witte concludes: “IBM OpenPages is helping us to measure, monitor and reduce risk across our global enterprise effectively and efficiently. We have already witnessed dramatic improvements, and we look forward to further progress in future.”

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About Continental

Continental develops intelligent technologies for transporting people and their goods. As a reliable partner, the international automotive supplier, tire manufacturer, and industrial partner provides sustainable, safe, comfortable, individual, and affordable solutions. In 2016, the corporation generated sales of €40.5 billion with its five divisions, Chassis & Safety, Interior, Powertrain, Tires, and ContiTech. Continental currently employs more than 220,000 people in 56 countries.
 

Solution Components

  • OpenPages GRC Platform
  • OpenPages GRC Platform

Take the Next Step

IBM is working with organizations across the financial services industry to use IBM Cloud, cognitive, big data, RegTech and blockchain technology to address their business challenges. Watson Financial Services merges the cognitive capabilities of Watson and the expertise of Promontory Financial Group to help risk and compliance professionals make better informed decisions to manage risk and compliance processes. These processes range from regulatory change management to specific compliance processes, such as anti-money laundering, know your customer, conduct surveillance and stress testing.

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