What is Enterprise Risk Management and the top 8 tools to achieve it!

Risk is part of all our lives. As a society, we need to take risks to grow and develop. From energy to infrastructure, supply chains to airport security, hospitals to housing, effectively managed risks help societies achieve. In our fast paced world, the risks we have to manage evolve quickly and we need to make sure we minimize their threats and maximize their potential.

Organizational risk is a potential for losses due to uncertainty. A successful risk management program helps an organization consider the full range of risks and disruption it faces and the impact they could have on its strategic goals.

What is Enterprise Risk Management?

Enterprise Risk Management (ERM) is a term used in business to describe risk management methods that firms use to identify and mitigate risks that can pose problems for the enterprise. 

It's the process of identifying and addressing methodically the potential events that represent risks to the achievement of strategic objectives, or to opportunities to gain competitive advantage. It's a multifaceted process aimed at minimizing the risk to a company’s capital and earnings. 

According to the Institute of Risk Management:

Risk management involves understanding, analyzing and addressing risk to make sure organizations achieve their objectives. So, it must be proportionate to the complexity and type of organization involved. Enterprise Risk Management (ERM) is an integrated and joined up approach to managing risk across an organization and its extended networks.

Why is enterprise risk management important?

An effective enterprise risk management method, if integrated properly, can result in substantial cost savings for the company. It helps control future outcomes as much as possible by acting proactively rather than reacting to situations as and when they arise. ERM helps minimize both the possibility of a risk occurring and its potential impact. 

Risk management process

The goal is not to eliminate risks altogether but to take calculated risk decisions that preserve and add to enterprise value. By implementing risk management techniques -  risk avoidance, risk mitigation, risk transfer, and risk acceptance - an organization can discover which risks are worth taking. ERM follows a very distinct and ongoing process:

Five Steps of Risk Management Process

What is enterprise risk management software?

Enterprise risk management software (also known as ERM software) is a specialized type of risk management software to help large-scale enterprises identify potential risks and weigh them against business opportunities.

Why do you need specialized ERM software? 

• Strategic risk information is often held in disparate Excel spreadsheets making it difficult to identify, understand, and draw relationships between causes, consequences and their controls, and actions.
  
  
• It's also often difficult to map and interpret interdependencies and commonalities, and any effort to create a risk map is entirely manual and prone to human error.
  
  
• Communicating this complex information or sharing it collaboratively, is difficult and time-consuming, especially when executives and key decision makers across the business only require the crucial messages and high-level insight. The right tool will provide integrated risk management for fully informed decisions across the business.
  
  

"SharpCloud provides a different way of visualizing and interpreting the data, which immediately grabs people’s attention. Being able to articulate the data back in a clear way and show the relationships between the different component parts, which is key in risk management."
- Thomas Fletcher at Chaucer

Read case study

Benefits of Enterprise Risk Management software

Enterprise risk management software makes it easier for businesses to collaboratively identify and account for their risks, helping them to reach a shared understanding and make more informed decisions. Benefits include:

1) Standardized risk assessments

When you have multiple people performing risk assessments, they may not always be doing them the same way. However, ERM tools provide templates for risk assessments, so your organization can decide on one and stick to it. This way, you can ensure your team is including all relevant information in the assessment, and it’ll be easier to see where the risks lie. Performing the same assessment can also help standardize the risk analysis and risk management processes as a whole.

2) Better compliance coordination

Potential risks can be very scary for a company, but the best way to prepare for them is to communicate effectively. Compliance managers can use their ERM tools to outline potential compliance risks on a project, create an action plan, and assign tasks to avoid them. This way, everyone knows what they’re responsible for, and they can work together to spot and stop emerging risks quickly, improving regulatory compliance.

3) Business continuity

Most ERM platforms offer business continuity management that helps risk managers outline key risk indicators and how each one should be handled. Risk analytics provide actionable insights on a business’s risk exposure, allowing the risk owners to take action. Additionally, the organization can log each risk mitigation activity into the ERM tool, providing corporate governance and a clear audit trail. By logging risk treatments, businesses can also act faster the next time they encounter a similar risk.

What Risk Management tool will work best for you?

Maintaining business operations in an increasingly complex and unsettled environment requires proactive, integrated solutions across people, data, and infrastructure to ensure alignment when challenges arise.

To minimize and manage risks, companies adopt risk management software that combines the following features:

• Risk Identification: Scans networks and identifies risks and vulnerabilities as they arise
  
  
• Risk Visualization: Transforms complex risk analysis data into compelling and easy to understand visuals
  
  
• Risk Assessment: Analysis of risks and vulnerabilities to determine how severe the threat is and what resources it would affect
  
  
• Risk Prioritization: Prioritize what risks will cause the most damage and alert operators to the appropriate task
  
  
• Centralized Dashboard: Monitoring risks and solutions with easy-to-understand visual reporting and dashboards
  
  
• Regulatory Compliance: Ensuring the company’s risk management processes meet all necessary regulatory compliance by defining and tracking processes and required compliances
  
  
• Issue management: Managing the execution of key risk-based projects and ensuring critical risk management issues are identified and accounted for
  
  
• Document management: collaborating and sharing documents and reports in real time

Top Risk Management tools

Let's take a look at some of the top solutions: 

1) Riskonnect

Riskonnect is an integrated risk management leader with GRC solutions for project risk, internal audits, compliance, third-part, and enterprise risk management. 

Riskonnect’s risk management platform integrates insurable and non-insurable risks for an actionable 360 view of the company’s risk profile. The workflow tool lets companies quickly assign actions and priorities to mitigate risk as it happens, while risk heatmaps give stakeholders a quick understanding of the most vulnerable parts of the business. Then use Riskonnect’s prebuilt and customizable reporting templates to communicate progress and increase awareness across the organization.

2) LogicManager

LogicManager’s ERM software helps simplify developing, improving, and reporting on your business risk program and enables better business decisions.

LogicManager uses a risk taxonomy structure to help companies categorize their risk across departments and business units to surface the most urgent vulnerabilities across an organization’s information silos. The taxonomy structure also allows risk and compliance teams to better allocate resources without duplication, providing the company with a faster, more organized response to risk environments.

3) LogicGate

LogicGate Enterprise Risk Management is an ERM solution that helps turn risk management into opportunity management by transforming your risk strategy from reactive to proactive.

LogicGate offers a full platform of modular no-code enterprise risk management solutions that companies can choose from to improve risk management as the company grows, including ERM, third-party, IT, compliance, and incident management solutions that work together in a single interface. Companies can use the pre-built workflows and drag-and-drop form builder to customize identification, notification, and response protocols.

4) MetricStream

MetricStream’s ConnectedGRC is a governance, risk, and compliance platform for enterprise companies looking to increase their resilience after an incident. The tools combine traditional risk, compliance, and audit tools with cybersecurity and third-party controls to ensure a full-spectrum view of the enterprise’s risk profile. The collaborative platform increases transparency between otherwise-siloed departments, which contributes to higher agility in the face of risk.

MetricStream is easily configurable and allows companies to design reports for senior executives and board members. 

5) SharpCloud 

As a platform designed to enable more informed strategic decision making, SharpCloud transforms and connects your siloed data imported from Excel, SharePoint, and other line of business tools into compelling and easy to understand visuals. 

Using SharpCloud's risk BowTie template, you can create an interactive and visual story for each risk and gain a new perspective as spreadsheet rows and columns seamlessly transform into a familiar bow-tie format and other flexible data-rich views. Content is centralized, easy to view, edit, share, and understand.

Clearly identified relationships help to understand how various risks interconnect with one another and the wider business, providing in-depth, practical insights - a key element that spreadsheets struggle to provide. Clear visual presentation and a variety of flexible views and interactive filters make it easier than ever before to proactively identify, assess and prioritize risk ahead of time - you can see exactly where your key decisions are. 

Data is automatically updated from individual spreadsheets into the relevant risk stories, ensuring that all data and content rolled up into the high level portfolio story, is real time and accurate for key stakeholders. Day to day processes, communication, and ultimately decision making, become more efficient and productive. 

6) Sword - Active Risk Manager (ARM)

Active Risk Manager is a suite of enterprise risk management applications, deployed on-premise or hosted in the cloud, which enables medium to large businesses to identify, analyze and mitigate significant risks across the organization. Features include qualitative and quantitative risk assessments, performance management, heatmaps and more. Active Risk Manager’s risk performance manager tool helps businesses develop and share reports using in-built templates, facilitating strategic decision making and employee engagement.

It's ARM SNAPPit mobile incident management module allows users to report accidents across various projects and review controls, treatment plans, follow-up actions, providing insights into operations. Active Risk Manager facilitates integration with various third-party applications such as Oracle, SAP, Infor and Microsoft SharePoint.

7) CAMMS.Risk

Camms.Risk is a best-practice, cloud-based risk management solution that provides a comprehensive integrated approach to governance, risk and compliance and encompasses risk management, compliance management, incident reporting and monitoring, workplace health and safety, audit management, IT risk management as well as flexible registers and workflows.

Camms.Risk allows for an integrated approach linked to the unique strategies or corporate plans associated your organization. It has an intuitive, highly visual dashboard-based UI to make authorized user access less clunky and comes with pre-configured risk management templates. These can then be customized to make identification, tracking, action assignment, approval, and case-wide monitoring closely aligned to the existing business strategy.

8) Diligent 

Diligent Compliance is a risk management solution designed to help organizations maintain regulatory compliance across internal and external processes to improve business continuity. Professionals can upload relevant corporate policies to the platform and create reports for auditors, regulators, and leaders.

Using Diligent Compliance's dashboards and reports, administrators can analyze compliance requirements, identify issues or discrepancies and build suitable remediation strategies. Administrators can leverage best practice frameworks and standards to measure the efficiency of ongoing compliance programs in accordance with organizational, jurisdictional, and industry regulations.

Additionally, supervisors can allocate tasks to specific team members or departments and configure access permissions for the staff. Diligent Compliance enables enterprises to streamline audit processes and backup critical information for future reference.

Choosing the best ERM solution

Enterprise risk management is critical for businesses that must abide by federal and international regulations, especially those in financial services, insurance, and healthcare industries.

All companies increasingly rely on technology to manage day-to-day operations, and enterprise risk management software holds a critical position in IT infrastructure. The best risk management platforms use risk data to identify and assess dependency risks that could derail a planned project or essential business functions.

ERM software keeps businesses operating as safely and successfully as possible. Identify key risks to your business objectives and prevent or prepare for them with risk management processes established by an enterprise risk management system.