The business landscape is fraught with risks that seem to be getting more diverse every year. Instead of restoring to a reactive approach to risk management, many leading companies are using risk management software to predict, manage, and mitigate their risks. In this way, they maintain operational agility and safeguard shareholder interests. Here’s an explanation of what risk management software is, what it does, and examples of how organizations use it to evaluate their total cost of risk.
What is Risk Management Software?
Risk management software refers to a technology designed to help organizations identify, assess, and mitigate their risks. You can also use risk management software to monitor various types of risks, especially those that could impact growth or progress toward your business and revenue goals.
With integrated risk management software, you get a centralized platform for managing risk-related data throughout your organization. As a result, you can improve decision-making across the organization.
What Does Risk Management Software Do?
Risk management software offers a range of features, all of which are designed to meet the needs of organizations in a variety of industries. Some common features include:
- Pinpointing the risks you face. Your software enables users to identify and catalog risks across different elements of your company. This includes financial and operational risks, as well as strategic risks and potential compliance issues.
- Assessing the impact of risks. Users can assess the impact of risks by leveraging predefined criteria. This puts organizations in a position to prioritize risks based on which are the most severe and those that can have the biggest impact on meeting business objectives.
- Mitigating risks. The software provides tools for designing and deploying risk mitigation strategies. These may include risk avoidance, reduction, or transferring your risk to an insurance organization. The software can also make it easier to understand which risks to accept and prepare for.
- Monitoring and reporting on your risks. Risk management software offers robust monitoring and reporting capabilities, which allows users to keep track of key risk indicators. You also get the ability to monitor changes in your risk exposure, If you notice that your exposure has increased, for example, you can generate a report explaining the whys and hows, then present these to other decision-makers
- Integrating with other systems. Many risk management software solutions give you the ability to integrate them with other systems. For example, you can connect an integrated risk management system with an enterprise resource planning (ERP) platform or a business intelligence (BI) tool. This streamlines data exchanges and collaboration throughout your organization. It also gives you the freedom to automate risk data collection, which can reduce the chances of human error.
How Does Risk Management Software Help Your Organization?
Risk management software can be a primary cost-reduction and operability-boosting tool because it brings your risks into focus and positions you to reduce or mitigate those that could negatively impact your business.
For example, you can take advantage of:
Greater Risk Visibility
With risk management software you get a more comprehensive view into the risks that could impact your operations. For example, a multinational corporation can simultaneously assess risks due to geopolitical tensions, regional compliance issues, and financial concerns, such as the potential for sanctions or exchange rates impacting cash flows. With this data in hand, executives are in a better position to decide how to mitigate risks associated with each office and operations.
Strategic Resource Allocation
Suppose, for instance, a healthcare organization uses a risk management solution to assess the severity and potential impact of certain risks when it comes to the safety of patients. They could use the software to identify the risks associated with medical mistakes, failed equipment, or injuries to their staff. They can then use this information to design patient safety protocols that insulate those they serve from these risks.
Reduced Costs
A retail chain may, for example, assess the risks associated with theft and damaged goods. Risk managers could use their software to study the historical impact of theft and damaged goods. Using this data, the company could take steps to better secure its stores. At the same time, it could also use the data to adjust its insurance coverage, transferring some of the risk to a third party.
Risk Prediction
Because your risk management software can keep records of historical risks, you can use this information to identify trends that could indicate unacceptable exposure. For example, you may be considering expanding to one of two locations: northern California in the Truckee region or southern California, close to San Diego. While the rents are a little less expensive in Truckee, you open your risk management software to assess the potential for negative weather events. You find that the risk of drastic snow storms in Truckee outweighs that of earthquakes in San Diego. Even though the rents are a little higher in San Diego, the impact on your supply chain and operability between November and March in Truckee is too great. So San Diego gets the nod.
Ventiv’s risk management software gives you deep visibility into your risks and enables you to predict and mitigate them, save money, and make better strategic decisions. As an integrated risk management solution, Ventiv enables smooth, efficient data collection across your organization. With these capabilities, you can whittle away at your total cost of risk, invest in risk transferal where needed, and improve the safety of your operations.
Chat with an expert to see how Ventiv’s IRM is right for your organization.
