5 Benefits of Integrated Risk Management
- September 16, 2022
- Quantivate
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 2022 said that they anticipate a “consistently volatile [risk environment] with multiple surprises” over the next three 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? Integration.
Defining 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.
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 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.
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.
Learn more about the value of integration: