What does a successful approach to effective risk management look like?

October 20, 2019

Anyone working in enterprise risk management in 2019 is aware of the complexities and pressure that comes with it. There is more risk threatening businesses than ever before, but the severity of that risk has grown too, meaning the role of the risk manager has become one of the most important in the enterprise.

Most approaches to risk mitigation and risk managementrely on effective enterprise risk management software or IT GRC tools – it would be hard to manage risk without such technology – but there are other elements that are also vital.

Is there an overall best practice method to risk management in business and how should organisations approach this in order to keep their business safe, protected and able to make smart and informed decisions regarding risk?

A heightened awareness of risk

Not that long ago, risk was much less severe and there was less of it to threaten business. But the increased threat has led to risk being taken much more seriously by most organisations. Risk management will not fix issues by itself, but it can help an organisation mitigate that risk and ensure it does not impact it too much.

The 2018 Cybersecurity Culture Report from ISACA and CMMI Institute revealed that cyber risk has become a top priority for many organisations. Risk comes in many forms of course, and cyber risk is just one of those, but it is encouraging to see the heightened awareness of risk among enterprises and also the increased priority it is given.

But despite this, how well are enterprises doing with their risk management? It should be straight forward to tell – does your business suffer many unforeseen technology outages, is risk discussed at a board-level, what is the process for managing each risk that the company faces? For risk management to be truly effective, it requires a culture where information relating to risk is shared and addressed as a collective, rather than in silo.

Understanding your risk profile

This really should be a priority for any organisation that is serious about enterprise risk management. Different firms in different sectors will have a different risk profile and there is no one-size-fits-all approach.

The global risk environmentis highly complex,with many new regulations to manage alongside any number of local, national and international risks to contend with. Tackling this all is daunting, so it is important to consider what an organisation’s exact risk goals are, and how they tie into the broader business objectives.

Questions must be asked, such what is the firm’s tolerance to risk, and what is it prepared to invest in risk management, both the enterprise risk management software that is so important but also the employees that are required to manage the risk department?

Most organisations will know the high-level challenges within its risk environment, but much less so when it comes to specifics – this understanding of risk profile is essential.

Address risk at a broader level

However, when it comes to addressing risk it is best to start with a broader outlook. Most organisations want to manage risk with the least investment in time and resources and the best of achieving this is to adopt strong foundations.

Different operational, compliance and reporting categories all require attention, but each one does not require the same level of attention. Compliance risk for example, is an on-going risk, and is a constant source of threat to a company.

It therefore requires management in a continuous and on-going way, usually with the right compliance software, to address the specific requirements to ensure compliance. A broader approach to risk management will help ensure that nothing gets missed. As your risk practice evolves, so you can then look at particular threats in more detail.

Accept guidance

No organisation can really hope to track and manage so much risk without external input. Although firms want to adopt a risk management framework, it is not easy knowing where to begin. Each company is different and it is hard to find something similar to use as a starting point.

But organisations would be advised to see what options there are available to them, whether speaking to peers or partners, or looking to work with external consultants that are used to establishing risk management programmes in a variety of sectors and industries.

Part of Oxial’s approach involves working closely with some of the world’s most highly regarded consultants to help ascertain risk in a company and to scope out the initial strategy and framework. It’s an approach that has proven to be highly effective when establishing initial controls and testing how they work as part of your enterprise risk management software.

Embrace technology

There can be no doubting though, the need for any organisation that’s serious about risk management, to embrace the best technology to help them. There are a great many options for enterprise risk management software and lots to consider for an organisation about to make that investment.

A solution that is suited for that firm’s unique needs is advisable and also one that offers the greats value for money, yet provides the best risk management and mitigation. It’s an important decision and one that for many firms has meant turning to Oxial and our sGRC solutions that manage governance, risk and compliance.

It’s a highly cost-effective solution, tailored to meet an organisation’s goals and uses evidence based GRC best practice to deliver outstanding results.

For more information on how our sGRC solutions can transform your risk management, just click here.