Top Benefits of Integrated Risk Management

From supply chains to cybersecurity to climate, managing today’s risks remains a struggle for organizations of all sizes and sectors. And that’s not likely to change. More than 40% of respondents to the World Economic Forum’s Global Risks Report said that they anticipate a “consistently volatile [risk environment] with multiple surprises” over the next years.

Many organizations continue to “operate with separate or inconsistent risk, governance, communication, and reporting strategies as well as misaligned operating models, technologies, taxonomies, and terminologies,” the Risk & Compliance Journal points out. This type of fragmentation impedes effective risk management in a constantly changing risk and compliance environment.

Addressing uncertainty requires more than a piecemeal effort, which is why siloed approaches to risk management are increasingly “under the microscope.” Risk leaders recognize that achieving strategic alignment, greater efficiency, and actionable risk intelligence isn’t going to happen with disconnected processes and tools.

The solution? Integrated risk management framework.

What Is Integrated Risk Management?

The term “integrated risk management” (or IRM) was first introduced by management consulting firm Gartner in 2017. Similar to the acronym GRC as an umbrella term for a unified approach to governance, risk, and compliance management, the goal of integrated risk management is to unify risk management processes across an organization and its functions, providing a comprehensive view.

Gartner defines integrated risk management as having six attributes — strategy, assessment, response, communication and reporting, monitoring, and technology — with the objective of simplifying, automating, and integrating risk management enterprise-wide.

IRM vs. ERM vs. GRC: What’s the Difference?

While terms like IRM, ERM, and GRC are often used interchangeably to describe enterprise-wide risk management programs, there are subtle differences between them. Each one covers areas like cybersecurity, finance, audit, compliance, and even natural disasters, but their focuses and approaches do vary slightly.

ERM, or enterprise risk management, is all about high-level strategic planning and oversight. Think of it as a big-picture review. Companies use ERM to align their business objectives with the risks that might disrupt them, including risks related to technology, ensuring the organization stays on track and is prepared for whatever might come its way.

On the other hand, IRM digs into the specific risks tied to an organization’s technology. It’s more IT-centric, building on the principles of ERM but with a sharper focus on the technical side. IRM helps break down silos, offering a unified, comprehensive view of all risks across the enterprise. IRM is essentially the engine that powers ERM. It handles things like monitoring networks, securing systems, and protecting the company’s perimeter from cyber threats. In other words, IRM is the hands-on, technical foundation that supports ERM’s strategic goals.

Both IRM and ERM provide a holistic approach to risk management, covering everything from IT to operational risks. They’re closely intertwined: IRM feeds into ERM, and ERM provides the strategic direction for IRM.

Then there’s GRC, or Governance, Risk, and Compliance, which acts as the framework that pulls everything together. GRC ensures all the strategic and technical elements of risk management are aligned, implemented, and working in harmony.

Integrated Risk Management (IRM) Solutions & Benefits

IRM solutions should combine these capabilities with a technology architecture that “reduces siloed risk domains and supports dynamic business decision making via risk-data correlations and shared risk processes.”

This type of technology-enabled risk management provides benefits such as:

1. Enterprise-Wide Visibility

An integrated risk management system can provide enhanced assessment, management, and monitoring capabilities. Breaking down silos and enhancing collaboration between business units enables a more complete, cross-functional view of your organization’s risk landscape

2. Compliance

For regulated industries, an integrated approach to risk and compliance—encompassing regulatory change management, policies, complaints/issues, and other aspects—supports continuous compliance.

Solutions that equip teams with policy and document management, training tools, status tracking, and other capabilities help create a culture of compliance while streamlining and standardizing management activities.

3. Strategic Alignment

A consistent approach to risk identification, assessment, and mitigation guides organizations in aligning enterprise risk management with business strategy and performance.

Solutions that provide data integration and analytics across GRC functions enable stakeholders to make informed decisions about risks and opportunities to support growth.

Related Reading | Strategic Risk Management and the Importance of Integration >

4. Reporting

Integration connects the dots across risk and compliance verticals, giving organizations a single source of truth for risk data and reporting. Taking a holistic view of risk management across your institution makes your risk function a value center — improving your ability to aggregate information and extract actionable insights, make data-driven decisions, and verify compliance and audit readiness.

Integrated reporting also ensures GRC information gets to the right people at the right time. When your organization can quickly source accurate, up-to-date information about your risk management practices and results, communication and accountability with both internal and external stakeholders improve significantly.

5. Automation

The constantly changing risk environment and growing regulatory burden are outpacing organizations’ ability to assess and analyze their risk and compliance posture.

Automating workflows, data management, and reporting processes in one integrated risk management system of record provides significant efficiency gains by reducing manual effort, errors, and redundancies in your risk management activities.

Automation facilitates consistent, repeatable risk management processes, equipping teams to proactively manage tasks, document activities and results, and share information.

What Are the Challenges of Implementing an Integrated Risk Management Approach?

Organizations encounter a variety of obstacles when transitioning to an integrated risk management approach. Here are the most typical challenges financial institutions face:

• Implementing an integrated risk management strategy often requires sustained executive-level support due to its significant impact across the organization.
• Accurately determining real costs and key business metrics can be difficult, as they are often based on unrealistic assumptions or flawed data, leading to financial hurdles.
• Data ownership poses a significant challenge, with far-reaching organizational implications that must be addressed before implementing an IRM solution.
• Evolving regulatory compliance requirements further complicate the understanding of inter-organizational relationships.
• As the product market expands, uncertainty surrounding new solutions grows, increasing the risk of missing delivery timelines and budget targets.
• Global expansion introduces conflicting regulations, data transfer restrictions, and local regulatory requirements, making compliance a growing challenge.
• Internally stored risk-related data may lack the quality and consistency needed for effective processing and reporting.
• The selected IRM solution must be reliable, scalable, flexible, and manageable to adapt to changing risk landscapes.
• Risk strategies are inherently complex, subject to newly introduced regulations, and impacted by shifting relationships between organizations and their customers.
• Risk data often relies on inconsistent or outdated internal and external sources, further complicating effective risk management.
• Risks isolated to one business unit can affect others and harm the organization’s brand reputation, underscoring the need for integrated risk management solutions to quickly adapt to evolving risk impacts.

The Value of Integration

Whether you call an integrated approach to risk management IRM, ERM, GRC, or something else, pursuing integration is a worthwhile investment in your organization’s efficiency and ability to navigate uncertainty.

Quantivate has your IRM, ERM, and GRC solutions covered. Quantivate’s integrated risk management solution helps identify vulnerabilities, analyze policies and procedures, and ensure that monitoring and other controls function effectively. It supports a broad range of risk and compliance frameworks, offering a flexible and robust approach to risk management.

Quantivate provides comprehensive, fully integrated risk management software for enterprise-wide risk management, with features that enable a holistic approach to addressing your organization’s risks.

Learn more about the value of integration:

• The Business Benefits of GRC Integration
• Unsiloing Your Data for Better GRC Management