If you’ve found your way here, you likely agree that implementing an enterprise risk management (ERM) program helps companies of all sizes and industries to improve their resiliency and more reliably deliver on objectives. However, developing and implementing a comprehensive ERM program can be challenging. Organizations often struggle to identify risks, establish processes to manage them, and measure the effectiveness of their risk management strategy. Fortunately, an ERM software solution like Resolver can help overcome these challenges and provide a comprehensive solution for effective risk management.
Understanding ERM and its importance
Enterprise risk management enables organizations to identify and manage risks proactively, taking a holistic approach that considers all risks across the organization. Implementing an ERM program can help identify potential risks to an organization and assess their likelihood and impact while providing a structured approach to managing and mitigating them.
Key elements of ERM include establishing a risk management framework, identifying and assessing risks, developing risk mitigation strategies, and monitoring and reporting on risks. Implementing an ERM program is critical for organizations to effectively manage risk, reduce exposure to potential threats, and optimize decision-making.
Common challenges in implementing ERM programs
Implementing an ERM program is a complex undertaking that involves several challenges. Some of the most common challenges faced by organizations include:
- Limited visibility into risks: Many organizations lack visibility into their risks due to data and information silos across the business, making it challenging to develop a comprehensive risk management strategy. Without a centralized view of the risk landscape, the company may not have a thorough understanding of what risks they face, how they might manifest, and their potential impacts.
Amanda Cohen, Resolver’s Vice President of GRC Products, explains that “risk management isn’t just what could go wrong, but it’s what opportunities exist within your organization,” adding that when an organization considers risk during strategic conversations, they can see “what’s happening in risk to inform what they do as an organization.”
Limited visibility into risks can increase the likelihood of unexpected incidents, which can disrupt operations, cause financial losses, harm an organization’s reputation, and even lead to legal and compliance issues. Moreover, it inhibits informed decision-making, as leaders need to clearly understand the risks involved when evaluating new opportunities or making strategic choices.
- Inconsistent risk management processes: Organizations and risk teams often struggle with immature and tedious risk management processes, leading to inconsistencies in how risks are identified, assessed, and managed. Resolver customer Farm Credit Canada experienced this issue first-hand when they tracked and updated 75 Risk and Control Self-Assessments (RCSAs) quarterly in a 75-worksheet Excel spreadsheet for the Board. This cumbersome and manual process poorly served their need as reporting took teams a few days to several weeks every quarter and generated few meaningful insights for leadership beyond control failure.
These challenges had Manager of Risk Information Paulette Beauchesne reevaluate their processes and look for an online GRC solution. “If our procedures are so convoluted that they aren’t going to work in this system, let’s listen. And maybe it’s a time when we could change the order of a process or a procedure,” Beauchesne said, adding that, once they implemented an ERM software solution, “We’re quicker to respond to issues and incidents that come up.”
- Siloed risk management: Many organizations have siloed risk management practices, which can lead to gaps in risk management across the organization. Sterling Bank and Trust’s Senior Vice President and Director of Enterprise Risk Management, Eleni Willis, knows the struggle of a siloed risk management approach well. When the bank was cited with underwriting deficiencies and violations of federal Bank Secrecy Act / Anti-Money Laundering regulations, it faced steep fines and regulatory compliance issues. To Willis, it was clear that “Having some kind of digital component to your different disciplines really helps you be able to break down those silos and leverage off of all of the work that’s being done across the entire organization.”
- Lack of executive buy-in: Without leadership’s buy-in, securing the necessary resources to implement an effective ERM program can be challenging. Executives play a critical role in driving the culture of risk management throughout the organization, making their support essential for the success of the ERM program. Without executive sponsors for your ERM program, setting the tone, finding necessary resources, securing funding, and establishing cross-functional collaboration can feel like an uphill battle. Building an ERM business case is the best way to demonstrate why senior decision-makers should view the proposed solution as an integral, value-add component of the overall business strategy.
How Resolver’s software can help overcome ERM program challenges
Resolver’s ERM software can help organizations overcome the challenges of implementing an ERM program. Resolver’s holistic risk management, compliance, and audit solutions provide a comprehensive system that includes the following features:
- Centralized risk management: Resolver’s risk management tools provide a centralized platform for managing risks, allowing organizations to consolidate and track risks across the organization.
- Standardized risk management processes: Resolver’s software provides standardized risk management processes, ensuring consistency in how risks are identified, assessed, and managed. Reputable ERM frameworks offer streamlined, sustainable ways to manage complex and unexpected problems. Not all frameworks are created equal, but there are four reputable organizations that enterprises can trust: the Casualty Actuarial Society (CAS), the Committee of Sponsoring Organizations of the Treadway Commission (COSO), the International Organization for Standardization (IOS), and the Risk Management Society (RIMS). When leaders within an organization effectively implement risk management tools, they know that ERM frameworks are supported and will help visualize the risk assessment process, making insights more digestible and actionable and improving critical decision-making.
- Cross-functional collaboration: Resolver’s software enables cross-functional partnership, breaking down silos and ensuring that risks are managed consistently across the organization. As Sterling Bank realized, implementing a strategic ERM priority improved communication across the first, second, and third lines, creating opportunities to leverage work done by different disciplines in the business. More specifically, a central, cloud-based enterprise risk management software solution was needed to achieve business objectives. “Having some kind of digital component to your different disciplines really helps you break down those silos and leverage off of all of the work being done across the entire organization,” Willis explained.
- Executive buy-in: Resolver’s software provides executives with the visibility and data they need to make informed decisions about risk management. This data can help secure organizational buy-in and provide the necessary resources to implement an effective ERM program. Having an integrated solution with a predefined risk register, a well-built regulatory library, and reporting and dashboard capabilities is essential. As Pooja Azhalavan, Product Marketing Manager, Resolver mentioned in The 10 Must-Have Reports for Risk, Compliance, or Audit Leaders webinar, offering a first-line-friendly solution to improve engagement across all three lines of business is highly significant, “Having a solution and a provider that can give you suggestions and advice on risk functions, whether at different levels of maturity, can be very effective in the long term,” she said.
Developing and implementing a comprehensive ERM program doesn’t have to be an uphill battle. Discover how to elevate your risk management discipline from mere “check-the-box” activities and unlock the full potential of your team’s efforts. With Resolver’s ERM software solution, you can harness the power of centralized, accessible risk data to drive risk-informed decisions, fuel business growth, and claim your seat at the table. Our solution helps to strengthen risk culture throughout your organization, proactively and continuously track risks, improve collaboration on risk assessments, and provide a real-time comprehensive, and accurate view of risks.
Ready to leave the never-ending spreadsheet chase behind? Work smarter, not harder. Discover how Resolver can help you improve inefficient processes and start turning risk data into business value. See how Resolver can help you overcome the challenges of implementing an effective risk management program by registering for a short ERM product video walkthrough now.