5 Key Things to Look for in Operational Risk Management Software
Operational risk management is critical for today’s most competitive companies, especially those with particularly unique or complex operations. This risk can arise from many sources, such as inefficient processes, equipment or systems, external events, and employee actions/inactions.
Operational risk management software can play an instrumental role in a company’s broader enterprise risk mitigation strategy. But a quick Google search will reveal dozens of options to choose from so it’s no surprise that many feel overwhelmed by the choices.
Find the right operational risk management software solution and you can expect a healthy ROI and peace of mind. Implement the wrong platform and it may prove to be a costly waste of time at best and an outright disaster that interferes with your risk mitigation efforts at worst.
There are a few key traits that you can look for in an operational risk management software system, ultimately maximizing your chances of identifying a good pick that will meet your needs as an organization.
Consider How You’ll Use the Operational Risk Management Software
Before you set off on your search for the right software system, it’s important to have a solid understanding of your strategic objectives, your needs as an organization, and how you will be using this software to your advantage.
This insight can be used to develop a solid starting point, such as a list of the features and functionalities that you absolutely need to have in a platform. Once you have a good feel for what operational risk management software features are most important, you’ll be well-positioned to begin reviewing the available software solutions.
Virtually every operational risk management software system includes tools to identify, assess and address operational risks, with an overarching goal of reducing losses that can arise from behavior, processes, or technology. But the quality of the software will have a major impact on how effectively you can leverage that software in your efforts to create and implement risk mitigation measures.
Feature #1 – Dashboards, Reports, and Analytics
Risk management and mitigation is both complex and multifaceted. In order to be effective, you must pull that information together so that it may all be taken into consideration as you formulate strategies and implement plans.
An operational risk management software solution should effectively centralize your risk management efforts, pulling in data from multiple sources. Enter: the dashboard. A user should have the ability to create custom dashboards that display key data points and information at a glance. This promotes greater risk awareness too — a vital component of a robust risk management and mitigation strategy.
Your software platform should also include the ability to generate analytics and export reports. This data can be extremely useful for the data-driven decision-making that occurs as part of a company’s risk mitigation efforts.
Feature #2 – Risk Assessment Matrix and Similar Tools
The best risk management software will include risk assessment tools that guide the user through evaluating and documenting actions as they relate to potential risks. A good risk assessment matrix will include a clear, quantifiable classification system that allows you to evaluate the risk level both now and in the future. There should also be columns for urgency, cost, resources, scheduled actions, completed actions and dependencies.
A well-architected risk assessment tool serves a few different functions, including the following.
Documenting potential risks and spreading awareness of those risks to individuals across different divisions of an organization.
Providing a platform for objectively and quantifiably evaluating the level and seriousness of risk so that risk mitigation efforts can be focused in the right areas at the right point in time.
Serving as a component of a risk mitigation tracking platform where specific risks — and the actions taken to mitigate those risks — can be documented and tracked over time.
A risk assessment platform is a very central component of an operational risk management software solution, so it is important that it is feature-rich and easy to use. If you have an opportunity to demo or trial a software platform, this functionality is one area where you should focus your evaluation.
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Feature #3 – Regulatory Compliance Tools
Regulatory compliance is critical to the success of many companies, especially in the financial sector and healthcare industry. Regulatory compliance often accounts for a huge portion of an organization’s operational risk management efforts, making this a key consideration in your search for a software solution.
The best regulatory compliance tools include a filter-able feed with real-time updates on industry-specific regulation changes and related news. This helps an organization in their efforts to remain up-to-date on the latest rules and regulations — changes that can be rather difficult to follow in highly-regulated industries.
You should also seek out compliance tools that include links to specific regulations for easy reference and project management-type feature sets that allow an organization to identify, plan and track progress on resolving potential areas of non-compliance.
Feature #4 – Project Management Capabilities
Risk mitigation is the central objective, so a good operational risk management software platform needs to include tools that allow you go beyond simply identifying risks. You need tools that will help as you take action to reduce risk.
A project management-type interface can be very useful, providing users with a centralized location where they can:
- Identify new risks;
- Document information concerning a specific risk;
- Formulate and document a risk mitigation plan;
- Create a step-by-step checklist for risk mitigation;
- Assign tasks as part of your risk mitigation efforts; and
- Track progress toward the resolution of a risk.
These features make risk mitigation a clean, organized process — something that is especially important when you are dealing with a complex situation or multiple operational risks at once.
Feature #5 – Useful Integrations
The top operational risk management software systems will include useful third-party integrations, allowing the platform to communicate and pull data from other systems. Data centralization is critical for risk mitigation success and integration helps you achieve this goal.
Take time to identify what third-party platforms you are utilizing and determine if the software platform allows for integration. If pre-existing integration plugins are not currently available, it may be worth investigating whether the software developer has an API that can be used if you opt to develop your own integration solution.
Operational risk management is complex and the right software platform will go a long way toward simplifying and streamlining your risk mitigation efforts. At iTech, we have a team of experienced risk management experts who provide our clients with efficient and cost-effective operational risk management solutions. Contact the iTech team today to discuss your business and its risk management objectives.