Eskom Case Analysis: Key Risk Indicators And Key Performance Indicators

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Executive summary The aim of this assignment is to define key risk indicators and key performance indicators. Give an explanation of what they are, their importance and relevance to operational risk. The Eskom case study provided for the assignment will be analyzed in depth and discussed with relevance to the indicators. The discussion will be based on Eskom’s total blackout, what went wrong in the system, the proper management that should be implemented, how the power crisis affected Eskom’s investments and risk ratings, how the poor load shedding affected business, and also its hard effect on the city’s economy. 1. Introduction Key risk indicator- a key risk indicator (KRI) is defined as an operational or financial variable…show more content…
Sapa, (2015) Nene told the newspaper, government was not able to help Eskom with day-to-day and operational issues, as it was best appropriate to deal with these itself. Process risk According to King (cited by Vosloo, 2013:36) process risk emerges as a result of a malfunction in the information system and can be external or internal. According to Mabona (2015) Eskom’s suspended chief executive Tshediso Matona admitted that the source of all problems for Eskom was its failure to maintain its generation infrastructure. He said Eskom has delayed the maintenance during the 2010 FIFA World Cup tournament to keep the lights on. Technical risk Anon, (2015) states that Eskom began power cuts today due to problems at its power stations. “The power system is violently obligatory due to unforeseen technical problems at power stations, as a result Eskom had to go into stage one of load shedding”. Stage one allows for up to 1000MW of the national load to be shed, stage two for up to 2000MW, and stage three for up to 4000MW. Technology (systems)…show more content…
There should be sufficient employees at all times. “Companies were detaching jobs, placing workers on short time, or going into liquidation because they could not produce due to an untrustworthy electricity supply” said (Sapa, 2015). 5. Practical application of suggested KPI’s  Profitability per business-according to Booysen, (2014) “Eskom’s sales decline along with its productivity, its revenue problem deteriorates. The Eskom disaster has now become a brake on the economy and the only long-term solution will be to find new managers for the usefulness, rather in the private sector. There comes a time when even governments have to admit to their failures and find a better way.”  Cost management- Economists have reported that load shedding by Eskom is going to be hugely harmful to South Africa’s economic growth. “The cost to the economy during stage 1 load shedding is equal to10 hours of blackouts per day for 20 days a month, which is R20 billion per month. Stage 2 load shedding, using the same time constraints, costs the economy R40 billion per month, while stage 3 is estimated to cost South Africa R80 billion per

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