Enterprise Risk Management Software | 4 mins read

A Buyer's Guide to Enterprise Risk Management Software

a buyers guide to enterprise risk management software
Lauren Christiansen

By Lauren Christiansen

What is Enterprise Risk Management Software?

Every successful organization prepares for different types of enterprise risk. Due to the current economic climate and the regulatory regime, risk control is critical. Case studies show that a business continuity plan and/or an ERM program can help to handle and respond to risk across the supply chain.

Businesses who invest in management software as part of an integrated risk management strategy can harness data-driven reports to optimize decision-making. ERM software is a risk management platform that helps a business pinpoint risk. Leaders can extract insights from the software solution to know whether to take a risk, avoid it, or eliminate it.

An ERM management solution assesses the organization's risk appetite and overall health. It also assesses cybersecurity threats to protect confidential customers and financial information.

  • 57% of executives say compliance risk is the biggest threat facing their industries
  • Only 36% of organizations have a formal enterprise risk management strategy
  • 79% of financial industries focus on enhancing the quality of risk data
  • 66% of CEOs say ERM software improves collaboration between departments

1. Top Enterprise Risk Management Software Features

While software solutions vary depending on an organization's needs, there are several common features to watch out for. These include

  • Risk Assessment Forecasting - A management tool identifies the associated costs of each risk and helps leaders create a budget to accommodate for disruptions.
  • Predictive Analytics - Management solutions utilize historical and real-time risk data to generate management processes to prepare for and manage risk.
  • Risk Response Management - A risk management solution generates risk mitigation strategies to eliminate the damage caused by natural disasters, shortages of energy utilities, and other external threats.
  • Governance Risk and Cyber Security Threats - Enterprise risk management software enact information security measures to thwart off attacks.
  • Receive Alerts - Authorized individuals at a management enterprise receive automatic alerts on business processes. This optimizes task management and ensures individuals are ready to respond to sudden threats.
  • Audit Management - Organizations can store and revisit old risk data on a cloud-based solution to continue to identify new disruptions and assess incident management strategies.

2. Enterprise Risk Management Software Benefits

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Businesses that invest in operational risk management platforms improve their ability to handle management enterprise risk. A management system protects and prepares an organization from disasters. An effective ERM program identifies potential threats such as financial risks, compliance risk, or operational risk. Businesses can use the software to customize a risk strategy and enact cybersecurity measures to ward off threats. An ERM platform also offers response tools to help an organization quickly enact policies when a situation occurs.

An ERM software solution also improves business operations. It enables leaders to eliminate any ineffective policies that expose them to organizational risk. Management can utilize tools to assess their competitors' strengths and weaknesses. They can then create products and services that appeal to a specific consumer market.

Easy use risk reporting features allow businesses to know about planned outages or other external threats. ERM platforms send automatic notifications and alerts to authorized individuals so they know exactly when a disruption occurs. Leaders can generate reports to study historical risk data and assess when and where problems most occur. This can help to improve upon existing policy management strategies and business continuity management.

Risk management compliance is a huge responsibility of business owners. Congress and other regulatory agencies continue to enact new legislation to protect consumers and enforce regulatory compliance. These regulations can be burdensome and difficult to follow without an optimized software solution. ERM software can help business owners avoid litigation, penalties, and optimize compliance management across an organization.

Both ERM platforms and GRC solutions help companies improve their credit rating and insurance rates. Those who use risk platforms and enact ERM programs tend to increase the bottom line. They know which opportunities to invest in and which potential risks to shy away from because they understand their risk appetite.

When an organization doesn't account for risks, an injured employee or preventable accident is expensive. ERM software helps a business budget and optimize financial services so it has the resources it needs to manage risks. When a business has an incident management plan in place, insurance companies tend to decrease rates and improve credit scores. This can also help to save money so there are more assets to invest, create new products, and increase the market share.

  • Increased organizational communication and collaboration
  • Optimized decision-making and problem-solving
  • Better understanding of customer needs
  • Ability to generate targeted marketing campaigns
  • Learn from historical inefficiencies and past mistakes

Key Takeaways of Enterprise Risk Management Software

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In conclusion, here is what to know about risk management software

  • Top features of management tools include forecasting, predictive analytics, risk response management, governance risk, and compliance control, an alert system, and audit management.
  • Risk management software can help an organization prepare for disasters. It also provides the correct response tools to enact corrective action when disruptions arise.
  • Reporting and notifications alert a risk manager about a current risk. Leaders can use reports to study historical risk data and create better strategies moving forward.
  • An ERM platform helps a management business comply with regulations and avoid litigation/penalties. It also improves a company's financial standing, lowers interest rates, and improves credit scores.