Palisade’s DecisionTools suite underpins enterprise risk management programme at MegaFon

RUSSIA: Russian mobile network operator, MegaFon, uses several tools from Palisade's DecisionTools Suite to integrate risk management within its budgeting and investment planning processes.

This decision support software provides Megafon's management team with transparency and understanding about the risks involved in planning, and therefore facilitates decision-making without guesswork. This enables the company to maximise capital expenditure efficiency.

Every year, MegaFon's eight regional branches in Russia are required to undertake a major planning and accounting exercise for the 12 months ahead. Each branch states the risks it faces, such as competition, changes in legislation that will require it to operate differently, price increases and changes to staffing costs. They also calculate how much each budget will be over or under the forecast.

The risk management team at MegaFon's headquarters amalgamates the information from each of its offices and simulates possible scenarios using a model using @RISK, Palisade's risk analysis software. The variables within these models are analysed in a tornado graph, allowing the five critical factors most likely to significantly affect the company's gross revenue to be identified and therefore mitigated.