There is an app for everything these days. People used to joke about how there’s an app for everything except for falling in love, but you can’t even say that anymore. Risk management, like everything else in our lives, has similarly been completely transformed by technology. What used to be a simple process that was done through noting down some information on some papers is now a complex and sophisticated process.  

While we may have lost the simplicity of it all, we have gained much more. What used to be slow and cumbersome is now an efficient process that helps organizations achieve their goals. Enterprise risk management software is here to say, because its advantages outweigh any drawback you can think of. Let’s look at some of the advantages that have convinced businesses that risks should be managed through software solutions. 

Data gathering and analysis  

One of the biggest strengths of risk management software is being able to analyze data. Businesses no longer use paper to store important information, but the information is still fragmented. A bank will have many different documents, spreadsheets, as well as email threads with critical information. Gathering all this data in one place is a major undertaking but it is just the start. After all this data has been gathered it also needs to be standardized.  

Standardization is necessary because the data is present in different formatting, across many different file formats. There is critical information present in Word documents and Excel spreadsheets, and this information cannot be directly compared unless we take out the data and bring it onto one filesystem. The problem is deeper than just file types. Different departments may have their own formatting standards, which results in further complications. You cannot directly compare documents to documents or spreadsheets to spreadsheets either, because even within those documents and spreadsheets the information is being stored in widely different formats.  

Enterprise risk management completely changes the way risk related data and information is stored. Instead of having the data be dispersed across the organization in different documents and spreadsheets, all the data is stored in a centralized risk management platform. Since the data is being stored in the same place, it is also being stored in the same format. This means that there is no preparation or standardization required to compare the data or perform any type of analysis on it. 

This is why a lot of these ERM software solutions also support real-time analytics. Real-time analytics are impossible with manual risk management methods because the data needs to be prepared to be analyzed. Risk management apps eliminate this need. 

Increased visibility into risk 

Putting all the data in one place also enables another functionality – risk visibility. Not being able to see the risk that is affecting the different parts of organization and the efforts to mitigate those risks is a major problem for management. The risk manager and the board both want to ensure that the business is adequately mitigating risks, but they have no way to verify this information. They must rely on risk reports, which creates further problems. These risk reports are manually created from historical data. Since they are manually created, it takes a lot of time and effort to create these risk reports. After all the time and effort it takes, all risk managers get is a view into how risk management activities were carried out over the past few months. The lack of real-time risk visibility is a major reason that businesses are often blindsided by risks – they have no way to detect problems in risk management.  

Risk management software solutions have all the data in one central location, which allows other people to access the data in location as well. This means that the risk manager simply needs to login to the risk management platform to see how risks are being managed across the organization. If there is a risk that is increasing in severity, the risk manager will be able to see it on their dashboard. If there is a risk management activity that is not being carried out, the risk manager will be immediately detect it and get in touch with the people involved to find out why the activity is not being completed. The risk manager and the boardroom now have visibility into risks affecting the organization and the risk management activities and processes throughout the organization. Having visibility means having control. 

There are many other advantages as well, which is why risk management solutions are so popular in businesses these days. If your organization also wants to improve the way it handles risks, then you need to look at the available solutions. There are solutions aimed at small businesses and solutions aimed at large enterprises – you just need to make sure you pick the one that fits the needs and size of your organization. 

 

View the latest blog on Key Risk Indicators.

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