Editor’s note:The following is a sponsored blog post by AuditBoard.
More than ever, organizations have come to appreciate the need for an integrated risk management (IRM) strategy that breaks down silos and facilitates a single, consistent view of business risks for everyone involved. This blog post highlights the keys to a successful IRM transformation journey.
Understanding Integrated Risk Management
Integrated risk management is an approach to managing risk that centralizes a business's risk activities for more efficient management of risks, deeper insights and faster response time for risk events across the entire organization. To reach this point, IRM requires data to be centralized, standardized and aggregated for analysis and general consumption. Since data is the core feature of IRM, technology is needed to support the practice.
Technology Strengthens Integrated Risk Management
To successfully implement integrated risk management, technology is needed to gather and aggregate data from multiple risk areas. The technology should seamlessly integrate end-to-end workflows to encourage collaboration and information sharing. Once the collaboration is established and silos have broken down, the same technology is used to facilitate engagement among the stakeholders. Then, the data aggregation and analysis process can be automated to further promote risk and control information sharing. Remember that data may need to come from different systems and people, so assembling the potential stakeholders is critical to building out the core data required for the risk analysis.
Integrated Risk Management Transformation Process
Implementing an integrated risk management strategy takes a focused effort. The first step is identifying your pain points and vision for the future. You need to understand where you are now compared to your goal of a mature IRM program. Next, you develop a strategy with that vision in mind. Then, you identify the key stakeholders we need to have involved in this process from different teams and from the executive level to ensure a cohesive strategy with the organization. Finally, mobilize the process with in-house and any third-party assistance needed to help you deliver this journey. The process can be challenging, but the result is essential to making decisions in a modern organization.
Transformation Governance for the IRM Journey
The journey to integrated risk management involves many stakeholders from different disciplines and levels of the organization. The key to a successful transformation is strong governance and executive sponsorship. Transformation governance should start with defining objectives and a roadmap. The plans and requirements are shared with the executives and modified to meet their needs and ensure their support. Finally, with the requirements in hand, the right technology solution is selected for implementation.
Starting the IRM Journey
Starting the journey toward integrated risk management can seem overwhelming. The starting point includes first understanding the process universe within the organization and, second, identifying the core data the IRM program will utilize. The process universe will help you understand the key players and the potential targets for integration while pinpointing the core data will help you narrow down the information sources. If you are considering an integrated risk management program, beginning with the end in mind and working backward to find the right people and data will give you a good start.
