Risk management, and an organisation’s approach to it, is a matter that will have been make or break for many businesses in 2020, with the benefits of risk management software becoming more and more evident. The coronavirus pandemic and subsequent economic fallout has scarcely left any business untouched. Organisations have been forced to deal with unprecedented circumstances: transitioning entire workforces to homeworking overnight, adjusting to meet changing customer needs, and a whole range of other unexpected challenges.
Although many businesses have been surprisingly resilient, what has become clear is that businesses should take advantage of times of stability to ensure the correct tools are in place to form an effective, flexible and modernised strategy. Risk management software is a key part of ensuring this stability and should be considered when forming this strategy.
The onset of risk fatigue
Global pandemics aside, risk management functions are facing increased pressure in their day-to-day operations. Organisations have seen an upsurge in audit activities, possibly driven by more employees pursuing their right to blow the whistle on suspicious practices. Many are seeing their customers become more proactive in demanding transparency around matters such as ESG, putting businesses under even more regulatory scrutiny. Control functions are also dealing with ever changing and new regulations, and as a result, businesses themselves are in danger of experiencing ‘risk fatigue’. The fundamental nature of these pressures means many businesses simply cannot afford to trust the more traditional approach- the typical ‘tick box’ mentality is insufficient to meet increasingly digitised business environments.
Across the scale, from day-to-day operations to readiness for major global events, there is evidently a clear need for a dynamic risk management strategy that goes further than traditional manual approaches. Fortunately, the digital transformation presents a compelling alternative. By leveraging innovative digital methods, businesses can fully automate processes that previously would have demanded considerable time and resource. Across industries, we are starting to see digital transformations in risk management improve the quality and efficiency of risk decisions, thereby creating real business value.
As momentum grows in modernising risk management, we examine some of the compelling benefits that a modernised risk management system creates:
- Enhanced visualisation of data
Risk data alone is not protective against risk unless it is fully understood by those who need to use it. Modernised risk management systems can create full reports which in turn will improve the quality of information delivered to the board and non-exec directors. This facilitates the effective presentation and communication of the data to the right people.
- Empower managers with full visibility of every incident
A modernised and fully integrated risk management system provides a centralised focus for engagement so managers no longer operate in siloes, giving managers full visibility of how risk events may be interconnected and impact one another. Allowing managers to have a much clearer picture of their responsibilities increases their input and control, giving them ownership over the whole process.
- Integrate risk-awareness throughout your business
A common challenge in traditional risk management is ensuring every employee is engaged and aware of risks. By introducing a digitised system, business leaders are able to easily collaborate with employees at every level. Modernised risk-management systems also make it easier for employees to use; for example, Ideagen’s Pentana Risk has an intuitive user interface that is feature-rich but takes less than a day to learn.
- Stay on top of regulatory compliance with internal and external standards
A key risk management software advantage is that businesses will ensure up-to-date compliance with their industry standards, easing the burden on managers and ensuring businesses embed good practice from top to bottom.
- Identify early indicators of future risks
Businesses are operating in increasingly volatile environments; therefore, they need to be proactive in identifying and mitigating potential risks. Risk management software benefits business leaders in helping to reduce the efforts on lower risk areas and help managers focus their energies on real threats.
Embracing the modernisation of risk management
In order to keep up with the ever-changing risk landscape, businesses need a digitised system that brings all risk information together, analyses it and formats it in a way that is user friendly and understandable for business managers. The system should allow them to save time in data collection, facilitate report creation and prevent having to chase managers for updates.
An important aspect of risk management is to learn from experiences and improve – there will be lessons learned from this year which can result in improved resilience and enhanced risk management in the future. Although modernised risk management may not predict the next big disruptive event, it can certainly minimise the impact and accelerate a more effective organisational response.
Find out how Admiral Group Plc took advantage of the benefits of risk management software to transform their risk management function.
Transform your risk management function with software
Discover how Admiral Group Plc used risk management software to streamline their processes.Find out more