Your organization’s risk management framework needs to be updated based on the latest available technology. While the basic theories of risk management hold true, it is important to remember that the risk management strategies and methods devised decades ago considered only the risk management tools that were available at the time may now be outdated.

Compare traditional versus modern risk management frameworks to identify the ways in which your organization’s blueprint may need to evolve:

Feature Traditional Framework Modern Framework
Approach to Risk Reactive – responds after incidents occur Proactive – anticipates and prevents risks before occurrence
Risk Monitoring Manual, periodic reviews and assessments Automated, continuous real-time monitoring
Technology & Tools Spreadsheets, risk registers, paper-based reports AI-powered platforms, automation tools, integrated GRC systems
Data Management Fragmented data stored in disparate systems and documents Centralized data consolidation with real-time updates
Scope & Coverage Narrow focus on insurable, project-specific, or departmental risks Holistic enterprise-wide view including insurable and non-insurable risks
Response Time Slow response due to manual processes and delayed reporting Instant alerts and rapid response with automated workflows
Risk Assessment Method Qualitative assessments based on individual judgment Quantitative and qualitative methods with predictive analytics
Organizational Integration Siloed approach – departments operate independently Integrated approach with enterprise-wide coordination
Risk Prioritization Case-by-case basis with inconsistent criteria Data-driven prioritization aligned with strategic objectives
Reporting & Visibility Static reports with limited visibility across organization Real-time dashboards with organization-wide transparency
Compliance & Standards Basic, limited standards with minimal compliance requirements Modern standards with comprehensive compliance
Cost & Efficiency Lower upfront costs but higher long-term costs due to inefficiencies Higher initial investment but significant long-term efficiency gains
Accuracy & Reliability Prone to human error, inconsistencies, and oversights High accuracy through automation and consistent methodologies

Considering the AI-powered solutions available today, we have outlined five steps that will help you update your risk management framework and allow you to use this technology to its full potential.

While managing the current risks is a good short-term objective, in the long-term organizations need an approach that will help them mitigate all future risks as well. Creating such a framework is easier said than done.

It requires taking a better, more modern approach towards automation, compliance, and risk management. Organizations can vastly improve how they manage risks by implementing these five steps.

Step 1: Automate Risk Monitoring in Your Framework

Taking steps to automate risk monitoring should be the topmost priority for organisations involved with GRC. The time when risks were monitored manually and inefficiently has passed. We have the technology now to automate the whole risk management process, and it is neither expensive nor difficult to implement.

It is impossible for manual monitoring to match the efficiency of automated monitoring. You will need an unsustainable number of employees to constantly look at every known risk to even begin to compete with the efficiency of computers.

The effect that automated monitoring has on risk management is astounding. Instead of being blind-sided by growing risks, every authorized stakeholder is automatically notified if any risk goes above a designated level, ensuring that all risks are mitigated and managed as quickly and efficiently as possible.

Key Benefits

  • Eliminates human error in manual data collection
  • Provides around-the-clock monitoring
  • Reduces operational costs by freeing up resources

See our recent post GRC Based Risk Mitigation Strategies.

Step 2: Expand Stakeholder Engagement

Including more stakeholders in your blueprint is the easiest way to improve your risk management framework.

If you have worked in multiple companies over an extended period, you have likely seen management get blindsided by a problem which employees knew about. This is because risk assessments are often done without the inclusion of all stakeholders, so only the top-level risks stand out, and risks which may be bubbling beneath the surface remain hidden.

Best Practices for Stakeholder Engagement:

  • Identify all the groups who may be affected by or influence risks
  • Organize stakeholders based on influence and impact
  • Provide training and education about risk management principles
  • Leverage technology platforms that facilitate collaboration

If you want to know more about the risks that your organization faces, you need to create a way for everyone to collaborate and provide information about risks.

Teams discuss the best frameworks for risk management in their organization.

Step 3: Prioritize Risks According to Severity

Prioritizing and ranking risks is an important part of any risk management framework. There are minor risks, major risks, and many other levels of risk. Your organization needs to manage these according to their severity.

If a major risk is increasing then obviously the whole organization needs to immediately mitigate it, but minor risks can be dealt with at a lower priority level. Simply knowing all the risks that affect your organization is not enough; you also need to categorize them according to the threat they pose to the future of your organization.

Step 4: Increase Risk Visibility

The easiest way to increase risk consciousness among employees is to make risks visible. People will not realize the gravity of risk management if risks are just a vague threat they cannot see. This is why risk management solutions are so successful in improving the way businesses manage risks. They make all risks visible to all assigned users.

Management, employees, and anyone else who has been authorized can see all the risks affecting the organization with just a click. Our own solution, Predict360 Risk Management, even allows you to choose to view potential risks on your dashboard the moment you log on. This ensures that risks are always at the forefront and are being managed 24/7.

Benefits of Risk Visibility:

  • Increased risk consciousness throughout the organization
  • Improved accountability through clear ownership
  • An increase in data-driven decisions by stakeholders
  • Simplified compliance reporting documentation

The Predict360 platform allows teams to be proactive about risk management.

Step 5: Enable Risk Ownership

Organizations often talk about encouraging risk ownership, because risk ownership has proven to be the most effective risk management framework approach. However, stakeholders need to go beyond encouraging risk ownership and instead enable risk ownership.

Do not just tell the employees that they need to own risks, give them the tools and the access to own risks. Give them a system which allows them to monitor risks and provide information about them. Give them a collaborative space where they can discuss risks with their colleagues. If you build it, they will come.

If your organization is looking for ways to improve the enterprise risk management framework, contact our team. The Predict360 Risk Management Software module has been designed to help businesses efficiently manage risks without requiring extensive or expensive implementation periods.

About Our 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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