Every day, organizations face threats, sometimes mild and, in other instances, quite severe. One single instance can cripple your business.
Therefore, to achieve risk management strategies, you must have the right security compliance plan.
The compliance plan ensures you can monitor, assess, and manage your systems to the management’s accepted limits, thus mitigating threats.
As the tech shift continues impacting humanity, many organizations are working round the clock to manage and reduce risks. Let’s face it; risk management is the backbone of every company’s success.
Unfortunately, you can’t achieve your objective goal without risk control measures in place.
What Is Integrated Risk Management?
Integrated risk management (IRM) incorporates the procedures and practices put in place in an organization to reduce risk and improve its performance through coordinated decision-making. Some of the risks can range from business risks such as bankruptcy to financial risks like mismanagement and fraud.
Every organization is supposed to have a risk management team to analyze risks, mitigate them, and draft risk control strategies that enable the business to avoid losses and thrive.
Why Is Integrated Risk Management Important?
Without risk management plans to address different threats, your organization risks sinking into unforeseen dangers such as financial losses. Seemingly, risk management plays a crucial role in businesses by ensuring they run at optimum levels.
If you haven’t incorporated a risk management plan into your organization, consider some of the benefits that come along with it, such as:
1. Risk Identification: Businesses can identify potential risks on time and mitigate them. Without risk management, organizations would be operating at a loss due to business threats.
2. Reduced Fraud Incidences: Technology has been a great leap for humanity, but it also has its downsides. Unauthorized parties are able to infiltrate systems and steal data. With a risk management plan, businesses can reduce fraud incidences and close the loopholes used.
What do you need to know about an integrated risk management plan?
The world is moving at unprecedented speeds, and the previously used risk management plans seem to be no match for the new, growing threats. You need a smart risk management strategy to protect your organization from risks.
Imagine this: You have experienced a cyber security breach in your organization that has leaked clients’ details to third parties. What’s your first step? Call the police? The best strategy is to analyze the risk and close the existing and future loopholes. We will dive deeper into the risk management components later. Check out some examples of risk management strategies.
A well-laid-out integrated risk management plan will thwart any potential risks that threaten your organization. The management plan works in your favor because it improves the risk identification process and communication between different departments.
For effective risk prevention, you should incorporate different risk management plans together with security compliance plans. The two work in harmony to achieve the organization’s objective.
5 Components to Protect Your Organization from Risk
Risk management plans won’t work unless they are well-structured, systematic, and collaborative. It’s evident that dealing with fast-changing threats requires new tactics and skills. To achieve success, you must be willing to make choices that will manage risks.
Some of the components that will lower your organization’s risk include
1. Risk Identification
Risk identification works by gathering all the potential risks affecting your organization. The next step involves narrowing down the actual risks and their sources. Some of the risks include
● Market risks
● Regulatory risks
● Environmental risks
Once the risks have been identified, the findings should be stored in the management system so stakeholders can access them. Furthermore, the findings should involve future risks, not just the current ones, because business models are changing daily.
2. Risk Analysis
After identifying the risks, it’s time to assess the potential impact on your organization. Consider analyzing the risks using this question:
1. How often do these risks occur?
2. What level of damage can they inflict on the organization?
First, if the risks occur frequently, the management team has to narrow down their focus to the departments that are mostly hit and close the loopholes.
Secondly, and most importantly, check the severity of the risk. If it leads to financial loss or data leakage, it becomes a priority and should be put under mitigation strategies before it seriously damages your organization.
3. Response Planning
In response planning, you must plan how to contain the risk. This step helps you identify the practical solution for each risk. For example. Suppose one of the risks identified was a data breach through social engineering. Your response would be to plan how employees would be made aware through security or psychology awareness training.
4. Risk Mitigation
To mitigate the risk, you have to take action. The high-priority risk recorded in the response plan has to be solved. If you don’t take the right action, the risks will keep re-occurring in the future and might lead to the collapse of the organization.
Let me explain: in the example we just discussed, mitigating the risk will involve training your employees, equipping them with the necessary tools and devices, or hiring new cyber security professionals.
5. Risk Monitoring
Risks change and evolve with time. Some risks become extinct while others restructure and re-appear in more complicated and dangerous versions. A good example is computer worms. Although they are quite old, they have evolved into dangerous threats over time. Stuxnet is one type of worm that is astonishingly able to compromise nuclear programs.
Risk management is a continuous process, and you should be able to proactively handle threats in your organization before they can cause adverse impacts.