Enterprise risk management and compliance is critical to business success. Yet many companies side-line this business function in favour of cashflow and marketing.
What is Enterprise risk management and compliance?
Enterprise risk management (ERM) refers to the process of identifying, assessing, and managing risks that may affect an organisation’s ability to achieve its strategic objectives. It involves identifying and evaluating risks across all aspects of an organisation’s operations, including financial, operational, and reputational risks, among others.
Compliance, on the other hand, refers to the adherence of an organisation to the laws, regulations, and policies that govern its operations. Compliance programs are designed to ensure that an organisation operates in a manner that is consistent with legal and regulatory requirements, as well as its own internal policies.
Enterprise risk management and compliance are closely related as an effective ERM program will include a strong focus on compliance, and compliance efforts are often designed to mitigate risks identified through ERM. Together, ERM and compliance help organisations to identify and manage risks, protect their reputation, and meet legal and regulatory requirements.
What are the key elements of an enterprise risk management and compliance programme?
- Risk Identification: The first step in any ERM program is to identify the risks that an organization may face. This includes assessing internal and external factors that could impact the organization’s objectives, strategies, and operations.
- Risk Assessment: After identifying the risks, the next step is to assess the likelihood and potential impact of each risk. This helps the organization prioritize risks and allocate resources accordingly.
- Risk Mitigation: Once the risks have been assessed, the organization must develop and implement a plan to mitigate or manage the risks. This may involve implementing controls, transferring risks to other parties, or accepting the risks if they fall within the organization’s risk appetite.
- Monitoring and Reporting: ERM is an ongoing process, and risks must be continually monitored and assessed. Regular reporting on risk management activities and progress toward objectives can help ensure that the organization’s risk management efforts are effective.
- Risk Culture: A strong risk culture is critical for the success of an ERM program. This involves promoting a risk-aware culture, encouraging employees to identify and report risks, and fostering a culture of continuous improvement.
- Integration: ERM must be integrated into the organization’s overall strategy and decision-making processes. This involves aligning risk management activities with business objectives, ensuring that risk management is included in strategic planning, and integrating risk considerations into day-to-day decision-making.
- Communication: Effective communication is essential for the success of an ERM program. This includes communicating risk management objectives and priorities to all stakeholders, including employees, management, and external stakeholders. Effective communication also involves regular reporting on risk management activities and progress toward objectives.
How can technology help?
Whichever sector you are in, Alphatec’s suite of software solutions can provide support to manage the three main types of enterprise risks which are,
- Operational – impacting day to day operations.
- Financial – affecting the general financial standing and health of a company.
- Strategic – impact long term plans.
Let’s look at an example, say in the construction sector. Operationally it’s a high-risk industry and as such, is subject to stringent health and safety legislation. So, our health and safety incident management software will enable you to minimise the likelihood of major injury. The software provides tools to manage compliance (risk assessments, safety inspections, permits, audits, inductions etc.) and provides detailed analysis and reporting to allow you to learn from accidents and near misses.
The data and insight that technology can provide will enable you to continually monitor risk, identifying and mitigating risks as they arise. Our software also integrates with Google maps so that you can visualise risk hotspots. All this data presented in an easy to understand format will give you the tools to implement processes and procedures to minimise the likelihood of risk.
Alphatec provides several SaaS software solutions, to meet the needs of many industry sectors, and provide solutions within claims management, case management, health and safety incident management, field service management, time recording and insurance management. All our cloud-based solutions are competitively priced, easy to use, and continually enhanced and upgraded.
You can find out more about Alphatec’s history, read case studies and other news stories by exploring our website.
The best way to determine how our enterprise risk management and compliance technology can help you is to request a demo, so do get in touch to see how we can help you.