Until relatively recently, many business leaders regarded risk management to be more of a proactive and even semi-optional sort of endeavor. But the COVID-19 pandemic changed that perception in a dramatic manner. Suddenly, companies realized that they were vulnerable in ways that they had failed to realize previously. The fragility of their business — and the organization’s very future — was revealed. Companies that seemed to be extremely stable and unshakeable suddenly found themselves struggling, with many closing their doors just weeks into the pandemic.
Today, risk management is almost universally regarded as an essential component of any good business strategy. But risk management exists within a very complex and multifaceted landscape that spans nearly every aspect of a company and its operations. This can make it extremely difficult to develop and implement a new risk management strategy. But there is help. Enter: risk management services.
Who can benefit from risk management services? It’s a fair question, as many business leaders may wonder whether risk management strategy development is something that they can handle internally, without outside assistance. The short answer is nearly anyone and everyone can benefit from risk management services, although there are some organizations that stand to gain the most significant advantage from this kind of engagement.
What Are Risk Management Consulting Services, Exactly?
Risk management consulting services typically involve the analysis of a company, its interests, its operations, and the risks and vulnerabilities that the organization is confronting.
An experienced risk management consultant will take the time to get to know the business and its operations, providing valuable insights into the vulnerabilities and risk factors at play, both today and in the future. Once these risk factors have been identified, a strategy and action plan is developed to address and mitigate risks. The consultant will also work with the organization to develop a plan for monitoring for new risks that could arise down the road.
Risks take many forms, so the scope of a risk management consultant’s work can be extremely broad. Vulnerabilities and risk factors can arise internally from a company’s practices, employees, and operations. External factors can include regulatory compliance issues, natural disasters, cybercriminals, cyber threats, or even third-party bad actors seeking to actively harm an organization.
Who Needs Risk Management Consulting Services?
Virtually any and every organization can benefit from risk management consulting services, but there are some who stand to see the greatest advantage. The following is an overview of the organizations that can see the greatest risk.
Highly-Regulated Companies – Some businesses face a great deal of regulatory oversight, such as the healthcare space and the financial sector. Regulatory oversight demands a well-considered strategy for compliance, as non-compliance can result in significant fines and penalties. What’s more, the regulatory landscape is constantly evolving, making compliance even more challenging for these companies. These highly-regulated organizations need to implement a robust plan for establishing and maintaining compliance, in addition to monitoring for new regulatory demands that arise in the future.
Third-Party Risk Management – Companies that work with a large number of vendors, contractors, and other third-parties are at higher risk, so they stand to see great benefit from working with a risk management consultant. An experienced consultant can help develop a third-party risk management (TPRM) plan to help minimize risk. This is achieved through measures such as periodic screening of third-parties and the use of third-party risk management software platforms, among other things.
Frequently-Targeted Companies – Businesses in the financial sector such as banks and lenders are an example of common targets for theft and fraud. Cybercrime is another major factor impacting companies in a variety of different sectors. Large, high-profile enterprises are an example of a business type that’s vulnerable to cybercrime, ransomware, and targeting by criminals who are seeking to exploit their success. A solid risk management strategy is essential for addressing these vulnerabilities and avoiding subsequent harm. The action plan may include refinement of security and cyber security measures, along with the implementation of new measures to help safeguard the organization and its interests.
Companies That Lack Stability – Nearly every organization goes through a period where they’re facing instability and uncertainty. This may be the result of a drop-off in business or a recent company reorganization that has caused internal friction. COVID-19 caused instability for countless businesses due to the shift in consumer behavior, combined with the changes in demand for various products and services. Whatever the case, these periods of instability can bring great vulnerability that ought to be addressed in the organization’s risk management strategy with the help of a consultant.
The aforementioned cases all stand to see a significant benefit from risk management consulting services. It is one investment that holds the potential to bring significant returns by minimizing risk and helping an organization to avoid events and circumstances that could result in profound harm. That harm can take many forms, from steep financial penalties and unexpected expenses, to damage to a company or brand reputation — the type of damage that affects profitability and endangers a company’s future potential.
Risk management is part of a very complex and constantly evolving landscape. The consequences of skimping on your risk management strategy can be catastrophic in some cases, resulting in tremendous damage to an organization, its reputation, and its very future. But risk management consulting services provide a great solution for the development of a robust strategy that will protect a company and secure its future.
By pairing a risk management consultant’s expertise with the latest technology — such as a well-architected governance, risk management, and compliance (GRC) software platform — a company will dramatically minimize the risk factors while simultaneously increasing the chances of enjoying stability and profitability well into the future.
At iTech, risk management is among our specialties, as we develop innovative enterprise risk management solutions, including governance, risk, and compliance (GRC) software. Reach out to the team at iTech today to discuss your company’s risk management needs and work toward developing a solid strategy for success.