DSI's Strategic Risk Management (SRM) methodology provides a framework for addressing strategic risks by identifying, assessing, managing, communicating, and mitigating these risks. From an organizational perspective, SRM will focus mainly on strategy (how a company's strategy needs to be updated given the risks encountered).

The focus of an SRM engagement typically will be on identifying the vulnerabilities of existing or emerging strategies for exposure to the unknowns and the unanticipated, and providing a framework to classify and quantify those risks in addition to suggesting actions to mitigate or hedge those risks.

We define "strategic risk" as the threat or possibility that an action or event will adversely affect the firm's ability to achieve its objectives. In this context of SRM, the management of strategic risk involves:

• identifying key risks as well as strategic assumptions (both implicit and explicit) and determining the level of strategic vulnerabilities associated with each,
• making right decisions over time that result in maximum value protection and efficient coverage of opportunities,
• ensuring that the decisions are robust, given the uncertainties involved, and
• charting a course to achieving objectives once those decisions are made.

Therefore, SRM aims at enabling organizations to rationally assess value loss events impacting their strategy and set resource allocation priorities to prevent or remedy the situation. The SRM framework strengthens the decision making process required to reduce the effect of potential loss generating events and to take advantage of the opportunities.

The SRM project involves such steps as:

1. Problem Formulation
2. Risk Identification and Screening
3. Detailed Risk Characterization, Evaluation and Vulnerability Assessment (as required)
4. Risk Management including mitigation plans
5. Communication and Reporting

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