Implementing an ERM program is one of the most valuable investments you can make – and technology is essential for success. Here are five reasons why:
1. Creates one central repository of data for information transparency.
Data fuels decision-making, and it can drive efficiencies – but only if it’s available to you in the right form and at the right time. When data is housed in silos, it rarely gets shared, and when it does, it’s often not in the right format.
ERM technology collects and consolidates disparate data from across the entire enterprise – incident intake data, customer data, vendor risk data, claims data, financial data, and more. With all risk data in a single platform, all stakeholders can easily see, assess, and analyze risks in a cohesive way.
2. Illustrates risk relationships across departments for enterprise-wide visibility.
One of the most valuable benefits of ERM is the ability to correlate various risk events across the enterprise.
Only 21% of organizations today are confident in their ability to map controls to a given risk or requirement. Just 24% are confident about mapping risk ownership to a specific person. Risk correlation engines take risks out of isolation and offer detailed information on controls, risk owners, related risks, objectives and processes, assessment and testing results, and more. This complete picture of risk impact and influence enables you to make better decisions based on a full spectrum of risk – and hold risk owners accountable for results.
3. Creates actionable insights for more strategic risk management.
Data on its own isn’t inherently helpful – it needs to have context, tell a story, and be actionable to add value.
Risk control spending charts, for example, can show how much you’re paying to mitigate certain compliance risks. If you’re tracking violations related to key regulations and see you’ve spent $1.2 million on an FCPA control, but were recently fined $30.5 million for a violation, clearly something isn’t working. With this information, you can raise questions, adjust your strategy, troubleshoot, and make smarter decisions.
4. Enables collaboration and brings order to key interdepartmental processes.
Automated workflows and alerts allow for faster and more seamless collaboration. When a risk indicator crosses a threshold of acceptability, the right person is notified and prompted to act. Risk owners can see their own tasks and prioritize actions based on the magnitude of risk, which helps keep everyone focused on what’s most important. ERM technology is also a great tool for encouraging dialogue by enabling all parties to seamlessly communicate within a single system.
5. Easier, more powerful reporting on program success.
ERM technology streamlines and simplifies reporting and analysis of risks. Standardized reporting templates, coupled with advanced analytics, customizable visualizations, and extensive data-slicing abilities, give risk managers a powerful tool for reporting to senior leaders, risk committees, and the board. The ability to lift detailed and real-time data – the organization’s top ten risks, risk scores over time by category, risks related to control costs, risk indicators outside threshold, and more – offers greater visibility into program performance, equips all stakeholders to make smarter business decisions, and enables risk managers to prove the value of ERM.
Technology is the foundation for managing risk at an enterprise level. Does your technology help or hinder your ERM program?
For more on ERM and how technology can drive a more effective program at your organization, check out The Definitive Guide to Enterprise Risk Management (ERM).