What does "operational resilience" refer to in ORM practices?

Operational resilience refers to an organization's capability to prepare for, respond to, and recover from disruptions, ensuring continuity of operations in the face of various challenges. This encompasses a holistic approach, taking into consideration not only the immediate response to a disruption but also the ability to maintain critical functions and recover effectively over time.

The emphasis on preparation involves identifying potential disruptions, whether they are due to internal factors like system failures or external influences such as natural disasters or cyber-attacks. The response aspect highlights the need for effective strategies and procedures that can be implemented in times of crisis, minimizing downtime and operational impact. Finally, recovery involves restoring operations to a normal state while learning from the incident to enhance future resilience.

While forecasting financial losses and minimizing operational costs are important elements of risk management, they do not encompass the complete concept of operational resilience, which focuses on maintaining service delivery despite adverse conditions. Similarly, assessing and mitigating all risks is part of broader risk management but does not specifically address the operational resilience framework.