Three Unexpected Business Benefits of ERM Software

The direct benefits of managing enterprise risk through a software are already established. ERM implementations cut down reporting time, improve risk coverage and prediction, provide insights and data, and improve the overall risk management capabilities of the organization. There are, however, certain benefits which may not be so clear. These are benefits which can make the future of the business significantly more secure. ERM can help organizations grow and decrease overall costs. How? Let’s look at three direct and significant business benefits.

1. Access to better financing

Access to financing is crucial for businesses that want to keep growing. ERM software helps businesses achieve better financing because of the transparency and controls it enables. Every financier focuses on risk. They want to know how risky it will be to invest in the business. Simply assuring them that risks are managed isn’t enough – they want to see the risk management framework within the organization.

The reporting and audit trails that are a core part of a good enterprise resource management system help assuage any fears investors and financiers would have about the organization. When they ask for information about risks the organizations face, they get detailed reports with predictions. This doesn’t just tell them that their investment isn’t risky – it also tells them that the organization takes risk management seriously which makes them more likely to provide financing.

Organizations that do not have ERM systems in place usually get external auditors before any financing rounds so they will have data and reports to show to potential investors. Organizations that have ERM implemented don’t just present the reports they have for financing – they can also provide historical data. Businesses can show that they always take risk seriously – not just when they are going for financing.

2. Easier deals, mergers, and acquisitions

Any major deal, merger, or acquisition requires in-depth risk reports and data. No business will agree to a deal with any business unless they are satisfied that the partner’s risk is managed. Detailed reports must be provided to all stakeholders and specially stockowners whenever a merger or acquisition is planned.

Mergers and acquisitions are inherently risky and thus they may make stockowners nervous. Showing them that the organization in question has a comprehensive risk management framework in place increases their confidence in the partnership. Showing them the effects, the merger or acquisition will have on the risk exposure of the organization through risk prediction is another great tool during these negotiations. All these reports are easily generated through ERM software.

3. Better insurance

ERM software can also help with insurance coverage and premiums. Risk is the most important factor for insurers. They want to know how much risk an organization faces and what it does to mitigates those risks. The premiums are also based on risk exposure. Having a digital risk management framework in place does wonders for the organization’s assessment. It allows the insurers to easily and quickly audit the business, thanks to the audit trails that are a core component of risk management systems. When they see how well risks are managed it becomes easier to negotiate better premiums with them.

The importance given to ERM software by insurance companies becomes clear when the National Association of Insurance Commissioners itself recommends insurers to implement ERM solutions. ERM implementations have even been integrated into many standards followed by insurance organizations because of how important they are for managing risks. When they see that a business is managing risk through the methods which they use themselves it becomes clear to them that the business takes risk very seriously.

Risk affects the whole organization and managing risk better thus enhances the whole organization. These three effects are just the effects of having an ERM software implemented in the risk framework – these are the benefits besides the benefits provided by enhanced risk management. Businesses can make better decisions for the future. It becomes easier to predict risks and to ensure business continuity in the face of disasters and outages.

If you want to see the benefits enterprise risk management can provide to your organization, get in touch with the 360factors team. Our team will provide a demo and also start a free trial for you, allowing you to test the system within your business environment.

About the company

360factors, Inc. (Austin, TX) helps companies improve business performance by reducing risk and ensuring compliance. Predict360, its flagship software product, vertically integrates regulations and requirements, policies and procedures management, risks and controls, audit management and inspections, and on-line training and qualifications, in a single cloud-based platform based on artificial intelligence.

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