Resilience and agility in a changing world requires an accurate view of risks across the organisation
03/15/2023
In a fast-paced and constantly changing world, keeping an accurate up to date view of current and emerging risks and potential opportunities is a big challenge for decision makers.
The importance of accurate data
Leaders face a changing stream of risk and uncertainty from numerous factors including climate, geo-political tensions, disruption to suppliers, cyber-attacks, talent retention, while navigating a challenging economic situation. Resilient and agile organisations require fast decision making based on accurate risk data.
This requires tracking the whole range of risk types from across the organisation. Yet many still use spreadsheets or other standard issue software. For some small organisations this could be a sensible approach, but for the majority it is not. A lack of clarity puts the organisation at risk because there is not one shared view of the top risks. It is then difficult to get agreement about the priority actions needed to build resilience.
Reliability of these approaches is challenging. Spreadsheets are often out of date, version control is confusing, they are rarely interactive, and tracking actions agreed is difficult. The design is usually not user-friendly, the report represents a historic view of the risks and effective communications across silos require manual intervention. The result is that leaders lack the data they require about risks across the organisation to make informed decisions. Resilience and agility in uncertain times requires having the confidence in risk data.
How can Enterprise Risk Management help organisations improve their risk management?
Growing and larger organisations tend to recognise these problems more readily and require solutions that support effective communication and quick decision making about risks. There is often a need to manage risks collaboratively across teams or departments.
Managing risk and uncertainty is a core part of leading any organisation. As the operating environment becomes less predictable and more uncertain, organisations should consider how they identify and manage risk across their enterprise. Enterprise Risk Management (ERM) is a well-established approach to this, but too many organisations rely on standard issue software like spreadsheets to record decisions and communicate about their risks. Their ERM framework may be sound, but the tools are not.
Specific ERM software helps by providing a current view of the big risks facing the organisation, or specific teams and departments. Risk actions can be tracked from identification to implementation to ensure appropriate urgency. Leaders can also see quickly which risks are more significant than others, and trends can be analysed.
Most organisations would benefit from a simple ERM application to support their approach to identifying and managing risk. Maintaining a single, accurate, up to date view of risk is much easier, and leaders can have confidence their decisions about risk are built on sound foundations.
Focussing on ERM opens a range of topical debates and conversations in steering a business through an ever-changing risk environment, and that environment is currently changing rapidly.
Zurich Resilience Solutions have developed an ERM tool for those companies who don’t have a fit for purpose risk management software solution. The system is Zurich Risk Clarity and is available for deployment today along with agreements for brokers who wish to offer it to their customer base. If you want to find out more about how we help you improve your organisational management, visit www.zurich.co.uk/business/risk-clarity
