What is Enterprise Risk Management Software?
Enterprise risk management software (ERM) and risk management information system (RMIS), help organizations identify and document risks in information systems, critical technologies, and other areas. This allows them to plan for possible risks and record responses and improve response times.
Risk assessments help to determine the potential impact of risk on projects or businesses’ major goals. The team and managers can then decide whether the risks are acceptable or unacceptable and create a plan to reduce disruptions or change course as necessary. Continuous input throughout a project’s lifetime will lower risk levels and empower teams to take action faster.
Who Uses ERM Software?
These ERM solutions are crucial for companies that must adhere to federal and international regulations, particularly those in the financial, insurance, and healthcare industries. ERM software is used often by financial analysts to identify monetary distracting factors in relation to projects or business objectives. However, it’s also popular among project managers, software engineers, and legal specialists.
According to research by Cognyte, ransomware attacks almost doubled in the first half of 2021 compared to 2020. These technology breaches affected the top five industries:
- Financial services
- Legal and Human Resources
The growing attacks on other industries, such as financial services–attacks that disrupt supply chains and can cause chaos for vital industries that keep the economy running – have demonstrated that every company must plan for disruptions in order to be able to react quickly.
Every company relies on technology to manage its day-to-day operations. Enterprise risk management software is a crucial part of the IT infrastructure. ERM software can often help businesses plan for ransomware breaches or DDoS attacks. The best risk management software platforms also assess and identify dependency risks that could disrupt a project or other essential business functions.
Common ERM Software features
Software options for enterprise risk management systems will allow companies to create processes that can identify and mitigate potential risks. These tools include workflow tools, document management systems, notifications, and alerts, which can be used to help companies create systems that identify potential risks and manage them. These basic enterprise risk management tools may be supplemented by the features listed here, but not all features are available from every vendor.
Analysis of Vulnerability and Threats
Threat and vulnerability analysis tools monitor projects and systems, identify potential risks, and alert administrators. These tools can also be used to rank risks and give administrators a prioritized list.
High-regulated industries are often challenged to comply with all regulations, whether federal, state, or local. These regulations can be complicated and have strict deadlines. Administrators can use compliance management tools to prioritize compliance tasks and ensure timely submissions of assets. They also provide workflows that help keep the team’s tasks organized.
Management of Vendor/Third-Party Risk
Companies grow and so do the requirements of third parties and vendors to be able to run efficient and timely business. Teams can use risk management information systems that include vendor and third-party risk management tools to help them assess and plan for potential delays, shortages, and downtime due to problems with vendors or third-party organizations. These tools enable the organization to quickly respond to changing vendor landscapes efficiently.
Forecasting and Modeling
Predictive analytics is one of the most promising uses of machine learning and artificial intelligence. It can augment existing data models and forecasting tools with greater speed and accuracy. Risk management solutions can be used to model and forecast various risks and create different scenarios for preparation.
IT Governance and Security
Every day, IT security teams face new threats from hackers, ransomware, and software bugs. The team will be equipped with tools, policies, and structured workflows to manage risk throughout the enterprise through a risk management system. These tools make it easy to keep up-to-date and maintain risk-related information, even during high turnover periods.
Having defined workflows and systems to ensure compliance and conformity for audits of documents and processes is a huge benefit. This tool allows teams to perform audits quickly and accurately using automation, notifications, and centralized data storage.
Financial departments have quick access to all the necessary data to create reports. This is because they can connect to financial software and databases. ERM software provides financial reporting tools that give teams a clear view of financials, whether they are creating stakeholder reports or looking ahead.
Companies grow and change. Policies must adapt to this changing environment. An ERM provides a central location for policy management that allows the company to store and reference policies. This makes it easier to create risk mitigation plans.
Native and API Connections to Software Essentials
Integrating with other systems of records is crucial for risk management solutions. How else can the software gain visibility of your data and processes? This is especially important if you are looking to reduce risk throughout the enterprise. When comparing products, make sure to look out for vendors who offer native integrations or open APIs.
- Both cloud and on-premise databases
- ERP software
- CRM software
- Document management systems
- Contract management Tools
- Supply Chain Management
- Fleet management
- Accounting software
- Application for legal protection
- Software development platforms
- Software for version control
Common ERM software Uses
There are many applications for risk management software depending on the industry you work in and your job function. . It’s a smart idea to identify your exact use purpose and search for products that match your requirements if this is your first time shopping. Here are some examples of risk management software that organizations commonly use to give you an idea of the situation.
IT Project Management
Many software and IT project management tools, such as LogicManager or TimeCamp, are designed with internal risk management systems in mind. These software tools allow teams to assess and understand potential risks related to funding and workforce allocation in IT and development projects. This includes making sure that team members have enough to do and assessing data security.
Risk management software is used by legal firms and internal legal departments to evaluate business risks while negotiating contracts with vendors. These tools can also be used to create risk models that demonstrate insecurities, in accordance with intellectual property laws and government regulations.
Internal Auditing and HR
Internal audit and HR departments make sure that business resources are utilized to their maximum potential. These departments can use risk management software to understand the over- and under-utilized staff as well as project costs and inefficiencies. They also have financial risks associated with customer and vendor relationships.
Internal financial departments and financial institutions use risk management software to identify regulatory and internal threats and increase legal fees or fines. It is used to forecast and respond to the impact of external and internal business threats on projects and businesses. Financial fraud and credit risk detection can be made easier by data from risk management programs.
Tips for Comparing ERM Software
There are many options for risk management software. These programs can either be integrated into an ERP suite or purchased separately. An RMIS software, in addition to the above-mentioned focuses, determines a company’s risk based on its supply chain, warehouse, supplier, vendor, and regulatory relationships. Research solutions that support these areas when choosing the right enterprise risk management solution.
Software that provides analytics and processes to identify risks based on company inputs and existing models. There are many ways to input data, including manual entry or API connections.
These features determine the outcome of identified risks and assign a value based on business factors. Additional metrics include regulatory concerns and loss of time. Businesses can calculate the total loss and value of avoidance by connecting to other business applications, such as accounting or contract management software.
An RMIS will often provide an overview of all potential risks and the changes in risk value according to dependent factors. These features can often be viewed via a timeline or dashboard.
For future audits and similar situations, it is important to document the steps taken by all parties in response. This section of the software should contain document management systems that allow for annotations.
These software features allow organizations to create a plan for managing risk and take action if necessary. This software section includes all necessary execution tools, connections for legal and contract management tools, as well as document management. It also includes connections to accounting, security, project management tools, and other useful information.
How to Choose the Best ERM Software
It is important to consider your industry and your technology when choosing the right ERM software. While standalone ERM software solutions may work for many businesses, they might not be scalable with larger or more established companies. ERP platforms with risk management capabilities may be an option for larger businesses that don’t wish to pay extra for separate systems.