Chris J Powell

Open Source Risk Management

It would seem to make logical sense that Open Source and its core methodology of having the source code open for all to see would have a solid uptake in the Risk Management Community but when I went looking for options and alternatives I was challenged with files that had no directions and were just jumbled messes of folders.  But then I stumbled across OpenGamma and took it for a test drive.

While the software is focused on the Risk Management of Financial Investing, as I started to play around with the Demo Installation I started to see how this could be applicable to my customers as a way of really looking at the Risk Profile that they present to their Boards, CFO’s and CEO’s.  Considering that the software is Open Source, browser based and very user friendly (I have not even thought about stocks and bonds since I was in a Grade 13 Economics class more than 20 years ago) and I could see how the connections were being made and a real time risk profile was being built.

I would like to see the platform built out to look at more than just Stock Traders though.  While modifications could be done to the program…it might actually be quicker to build one from scratch.  Looking at different industries like Health Care, Insurance, Banking, Manufacturing even Government and Non-Profits this type of solid and robust type of application is needed by many Small to Mid Size Companies.

Other Open Source options that I did find included:

  • CRAMS – with no documentation and no way of understanding how to get things started…I was more than a little lost
  • PillarOne – An interesting concept but it only looks to building a Risk Model and does not extend out further…a solid offering though
  • SOMAP – Is both framework for Risk Management and a tool to Mitigate Risk…for the purposes of this article…I wanted to fill an immediate need not “go back to school” that being said…SOMAP will become a close personal friend of mine as it is book marked and I will be using the concepts in some upcoming training that I am doing at my full time job.

The World of Open Source can absolutely help those Small to Mid Size Companies compete in a new economy that requires lightning fast reflexes and the ability to see well into the future.  As Technology moves further ahead, concepts like Big Data and Social Analytics will play an increasingly important role in the administration and delivery of Enterprise Risk Management.  For those IT Leaders who make the leap ahead and get a solid handle on what the sentiment is and how that affects the current, near term and long term Risk for their company…the world is truly their oyster.  So why not get your cake and eat it too!  Look to Open Source as a way of getting started with Risk Management…and if Open Source is something that gives you the willies…well here is a Risk Management Solution to assist in the evaluation of Open Source:

There is the OS Risk Management Code Audit Solution but I would recommend some introductory reading as well…like a White Paper from the US Federal Reserve titled Risk Management of Free and Open Source Software or look to Black Duck’s Solution on Open Source Compliance and Governance.

Well with just 3 more days left in 2012…I am taking a much needed break from thinking for the rest of the day…yeah like that will happen.  Enjoy your weekend everyone!


Chris J Powell

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