Risk management applied to the economic control process : a new risk approach for telcos

Risk management has reached the stage of a mature discipline. It now includes a wide set of frameworks, methodologies and techniques to account for risk exposures within different fields of application. But there are still many business processes that have not benefitted yet from the positive knowledge spillover effects of this discipline. Among them, the economic control processes are a striking example: risks are embedded down into their core essence but way too often they do not get properly accounted for at the design and execution phase. In this paper, a unique all-encompassing model is developed to serve as a general guideline to apply the risk management body of knowledge to a generic economic control process. The schemes are drawn starting from a collage of shreds of existing theoretical knowledge pieces coming both from risk management and from many other fields of research such as production theory, finance and statistics. Models are applied to the economic control process of Telefónica Global Solutions Wholesale Voice Business via mapping the current processes in place and through qualitative estimations of the main risk sources and the possible improvement actions from the people involved on the field. The result is a model providing a tool to manage economic control processes by setting up control points along a series of activities and workflows and, in doing so, highlighting eventual points of failure or risks. A theoretical analysis backed by qualitative observations paves the way for paths of improvement both for the Academia and for the corporate world: with the appropriate tailor-making needed in order to find an optimal fit for new uses, the model could be adopted and migrated to other industries and fields of application.