Risk management practices encompass a very broad scope and aptly so because threats tend to loom at every angle. Risk mitigation is equally complex, especially when it involves individuals from many different company divisions or departments.
Identifying risk factors and coordinating an effective response can be tremendously challenging. But there is help and it comes in the form of risk management software. Risk management software comes in a number of different varieties. Therefore, it is important to understand the available options so you can select the type of risk management software that is best suited to your needs. This ensures that you’ll see the maximum benefit.
What is the Purpose of Risk Management Software?
Risk management software is designed to facilitate a number of processes, including but not limited to the following.
- Identification of threats and vulnerabilities
- Evaluation of the threat severity
- Prioritization of threats in terms of response
- Planning a response and remediation efforts
- Outlining each person’s role in the risk mitigation efforts
- Tracking the risk mitigation response
- Monitoring for new risks and threats
- Documenting existing protocols and procedures
- Updating protocols and procedures as the risk landscape changes
At its core, risk management software features a toolset that empowers companies to identify and manage the risks that they are confronting. These platforms typically feature a dashboard and project management-type tools that are used to plan and track the company’s response to various threats and vulnerabilities.
There are a number of different vulnerability and threat types that a company must consider as they set out to select their risk management software. These areas of concern typically include:
- Financial Risk
- Operational Risk
- Strategic Risk
- Technology / Cyber Risk
- Reputational Risk
- Third-Party Risk
An organization may face threats from all of these areas or just a couple. The nature of these threats will largely determine which risk management software type represents the best choice. When all is said and done, the company ought to have developed a risk-aware company culture that is adept at identifying and mitigating any risks that happen to arise.
Integrated Risk Management Software
Integrated risk management software is designed to help a company to mitigate risks involving its technology and the processes, protocols and policies that arise from and surround that technology. For most companies, operations are rooted in technology — a fact which accounts for the technology-centric focus of integrated risk management. That said, IRM can include other non-technical aspects of an organization’s operations.
As a strategy, integrated risk management seeks to transform various aspects of a company’s operations so as to improve profitability and productivity. This is achieved through the reduction of risk and vulnerabilities, along with better decision-making.
Third-Party Risk Management Software
Third parties represent a significant risk to an organization — a fact that has prompted many company leaders to rollout third-party risk management (TPRM) software in an attempt to minimize these risks.
TPRM software is unique from many other risk management software solutions since the focus is on the human and their behavior. These platforms include some sophisticated AI and machine learning tools, such as a questionnaire analysis tool that is designed to evaluate answers and assess the individual’s level of risk based upon those replies.
Third-party risk management platforms also include integrations with background check services and many will perform continuous monitoring so the company is alerted to any new infractions or incidents that could alter an individual’s reliability or trustworthiness.
Reputation monitoring tools can commonly be found in third-party risk management platforms, allowing companies to gain access to information about others’ experiences with an individual, service provider, etc. Some even feature well-populated databases that are fueled by user contributions. This means that you can provide information about a reputable — or not-so-reputable, as the case may be — third party, helping others who may seek to work with them in the future.
Vendor Risk Management Software
Vendor risk management software is similar to many third-party risk management platforms, except it is focused exclusively on vendors and service providers. As a result, these software systems feature a combination of tools to research and vet both individuals and companies.
In addition to questionnaires and background checks for individuals, there are tools to research and monitor the reputation of a business. Like all other risk management platforms, you’ll find tools for assessing risk level and planning a response. In cases where you do opt to hire a vendor, but there are questionable findings that cause a bit of concern, you may use your software platform to plan your approach. For example, a company could opt to limit an individual’s access to certain technology systems or regions of the building. In other cases, you may require delivery of a product before payment is rendered.
Supplier Risk Management Software
Supplier risk management software is focused on the supply chain and the threats and risks that may arise in this area. Companies are equipped with tools that are designed to evaluate and monitor all aspects of the supply chain, from the location of the suppliers (including their location relative to each other), to the fragility of the cargo and the sourcing practices of the supplier.
Issues surrounding ethics, eco-friendliness and humane sourcing or manufacturing practices are rather unique to the supply chain risk management landscape. These matters are effectively addressed in supplier risk management software with features that allow a company to assess and monitor its suppliers’ practices. Reputational risk management is a very real concern for today’s modern business leader and working with an unethical supplier can result in serious damage that is difficult and costly to reverse. The impact can extend to customers, clients and investors, leading to a complex constellation of consequences that are best avoided with strong risk management practices. Supplier risk management software serves as a very effective tool for identifying and dealing with these reputational risk factors.
These are just a few of the many applications for risk management software. You’ll also find that there are industry-specific risk management platforms designed for the vulnerabilities and concerns of the healthcare sector, the financial sector and other specialized, highly-regulated industries. But even a non-specialized risk management platform can provide some very useful tools for addressing the risks that loom over a company and its operations.
Finding the right risk managing software can be a challenge due to the many options that exist, but that is where the team at iTech can assist. Our risk management and compliance specialists are available to provide cost-effective risk management solutions to clients in all industries and business sectors. Contact iTech today to discuss your risk management strategy and we will work to find the best technology to suit your needs.