In today's business world, silos are coming crashing down. The business landscape has been redefined as a result of digitalization and the evolution of the internet, mobile computing, and data sciences have led to a greater interconnectedness of operating markets across geopolitical borders.
The unprecedented after-effects of COVID-19 also made us realize that the world we live in today has a high degree of interdependency. For instance, this slow shift toward working remotely on a permanent basis could result in some long-term impacts on different industry sectors simply because everything is connected. A disruption anywhere on the transaction chain has the potential to create a domino effect and send ripples down the market. If businesses fail to understand and analyze the interconnections, they can make myopic decisions that could cause organizations to fail in developing and executing effective recovery strategies.
Despite the ongoing effort to adopt new technologies and tools to implement a pervasive approach to risk management, business leaders and risk teams are still unable to fully understand the interconnectedness of risks. In our recent webinar, risk professionals and leaders discussed why that happens and how businesses can take a holistic and integrated approach to make risk management processes more efficient and effective.
Even today, businesses implement control without understanding the implications of how it impacts different business areas. Implementing controls within a siloed system can lead to overabundance, overlap, and duplicated controls which are unnecessarily expensive, time-consuming, and eventually reduce efficiency. Therefore, it is absolutely critical to have an integrated approach to risk management where you’re not spending 80% of your time in data collection and only 20% in analysis.
Risk management needs to evolve and help businesses obtain a deeper understanding of all aspects of the risks they face as well as the intricate spider web of interconnections they create because these links among risks can amplify the overall impact, indirectly or indirectly.
And, in order for IRM to be effective, people, processes, technology, and perhaps even data need to come together and work as part of a common ecosystem with a common purpose and goal in mind.
However, risk identification and assessment programs by themselves do not serve the full purpose without having quantifiable measures put in place to support risk identification. This requires some carefully thought-out measurement components to be designed and implemented that would provide useful insight on the risk.
While many of us would like to believe that enabling technology for IRM is primarily about implementing an enterprise GRC tool, it requires some broader thinking. IRM is an extension of your GRC program where risk management practice is seamlessly embedded into compliance, cybersecurity, vendor risk management, and business continuity planning.
Businesses need to understand and break down the complex interrelationships. And that means risk identification needs to happen, where risk happens.
Our MetricStream Platform can help you cut across organizational silos by standardizing risk and control taxonomies and enabling stakeholders to effectively coordinate and unify risk management activities across all business functions. Organizations can use our product to align their assurance programs and gain comprehensive visibility into both risk exposure and relationships. Reach out to us to know how to achieve forward-looking risk visibility with predictive risk metrics and indicators in your Risk Management program today!