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Businesses that use data in their risk management strategies might benefit from more streamlined and simplified risk analysis.
Fremont, CA: One of the most significant investments a company can make is to put in place an enterprise risk management (ERM) program, and technology is critical for success. The use of technology to manage risk at the enterprise level is the core of risk management.
Here’s how technology helps in enterprise risk management:
ERM facilitates information transparency by establishing a centralized repository of data.
Data is the fuel for decision-making and has the potential to generate efficiencies, but only if it is made available to companies in the appropriate format and at the appropriate time. In organizations where data is stored in silos, it is rarely shared, and when it is, it is frequently not in the proper format. The technology used in enterprise resource planning (ERP) collects and consolidates diverse data from throughout the whole organization. Given the fact that all risk data is collected and organized in a single platform, all stakeholders can readily evaluate and assess risks in a cohesive fashion.
Creates a visual representation of risk linkages across departments, allowing for greater company visibility.
One of the most beneficial advantages of enterprise risk management is the ability to link various risk occurrences across the organization. Over a quarter of businesses are confident in matching controls to a specific risk or demand. Only 24 percent are confident in their ability to assign risk ownership to a single individual. When risks are taken out of isolation, risk correlation engines provide specific information on controls, risk owners, associated risks, objectives and procedures, assessment and testing outcomes, and other relevant information. When organizations have a comprehensive picture of risk impact and influence, they can make better decisions informed by the full range of risks – and hold risk owners accountable for the outcomes.
Produces actionable insights that can be used to improve strategic risk management.
Data on its own isn't particularly useful; in order to be useful, it must be accompanied with context, tell a story, and be actionable. Examples of such expenditure charts are risk control spending charts, which indicate how much money an organization is spending to manage specific compliance risks. If they're keeping track of infractions related to major rules and discover that they've spent $1.2 million on an FCPA control yet have recently been fined $30.5 million for a violation, it's evident that something isn't quite right. Organizations can use this information to ask questions, alter their plan, troubleshoot issues, and make better judgments as a result of this information.