Currency volatilities and plummeting oil prices are just some of the market forces that have recently brought risk management to the fore in many organisations.
If you’re looking to review your risk management procedures or replace your operational risk management software (ORMS), make sure you bear in mind these four essential features.
Different departments and stakeholders in your company have different risk concerns, and they’ll need to be able to review information quickly and easily to check for red flags. To be useful, information needs to delivered in a timely fashion, updated in real time, and show integration between different areas of risk – but bombarding colleagues with dense and unnecessary information will likely kill its usefulness. You’ll need to think carefully about getting the right balance for your team, and look for a flexible systems that can be tailored to your needs.
The technology that you opt for should be able to identify, assess and measure operational risks automatically, providing information that allows for quantitative and qualitative analysis of the risks that have been flagged up. The best systems now include options for risk control self-assessment, as well as tools for establishing not only the existence of a risk, but also risk levels and risk mapping, to help you prioritise the most pressing issues as they emerge.
Spotting risks is all very well, but to improve operations in the long term you need to know what instigating events and roots causes led the risks to emerge in the first place. Your software should be able to track back through event time charts and cycles to suggest where risks are originating from, allowing you to mitigate these in the future.
It’s no use finding out about a risk indicator once disaster has already struck. Automated notifications should be delivered promptly, as soon as risk thresholds are breached. You may find that software that provides a “heat map” of emerging risk at the early stages gives you the necessary insights to nip these risks when they have barely begun to bud; either way, make sure that your system is fast-acting enough to prevent risks from turning into full-blown problems – otherwise, your ORMS is just for show.
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