You know that problems can pop up out of nowhere and unexpectedly threaten the survival of your organization. The amount of risk a business owner faces is immense, and risk management is all about understanding potential threats and employing strategies to minimize the possibility that things go wrong. So, how do you protect your business and undergo the necessary risk management tactics to ensure you can succeed?
Having a systematic risk management procedure in place is crucial. It helps prepare for uncertainties and enables more accurate planning of future activities. And in case a risk materializes, it provides means to reduce the resulting losses.
Examples of key benefits of systematic risk management include:
- Identify less obvious concerns easier
- Be more financially stable
- Ensure your company can continue operating no matter what happens
Organizations that have already deployed Efecte for their service management can now quickly and cost-efficiently build their risk management practices on the same instance. Efecte is a service management platform for your IT, Business, and IAM needs. Virnex has partnered with Efecte to build robust business solutions that combine all functionalities in a single system for automating your processes from IT, other business areas, and identity and access management.
Virnex has developed a risk management framework on top of the Efecte solution to facilitate systematic risk management. It enables the formalization of the risk management processes without overcomplicating them. Modular design allows to start small with fundamentals and extend the implementation according to business needs, resources, and level of maturity. The solution is based on commonly agreed standards, like ISO31000 – 2018, but has the flexibility to retain your currently well-functioning practices and ways of working.
As defined by ISO in their standard (ISO31000 – 2018), managing risk is based on the principles, framework, and process (Figure 1).
Fundamental parts of the risk management process defined by ISO include:
- Risk Assessment
- Risk Treatment
- Communication and Consultation
- Monitoring and Review
- Recording and reporting
Risk Assessment comprises three steps: risk identification, analysis, and evaluation.
- The purpose of risk identification is to recognize and collect risks from variable sources, record the risks, and describe them at an appropriate level.
- In risk analysis, the identified risks are processed further better to understand the causes of the risk and potential consequences and conduct scoring for the risk based on its likelihood and impact. Risk analysis also aims to recognize other related items like associated risks, risk events, risk controls, effectiveness, and ongoing changes or development.
- Risk evaluation concludes the risk assessment by comparing the risk analysis results with established risk criteria and determining the additional actions needed to treat the risk. The option selected for risk treatment is communicated as the risk response, which can be one of four options: Avoid, Mitigate, Share, or Accept.
Risk treatment covers the planning and execution of selected treatment actions to address the risk. The type of treatment actions is based on the risk response determined by risk assessment. The risk treatment process is run iteratively with risk assessments to cope with continuous changes in the environment and evaluate the effectiveness of the treatment and controls associated with the risk.
The purpose of Communication and Consultation is to facilitate information flows both to communicate the risk-related information across the organization and gather as much relevant information as possible to support the risk management process.
Monitoring and Review aim to monitor the performance of the currently implemented processes and assure their continual improvement.
Recording and reporting should be an integral part of risk management to enable sharing the risk status with various internal and external stakeholders.
Virnex’s implementation of the ISO risk management process includes
- Data templates for key information objects, including central risk register, treatment tasks, risk controls, assessments, and risk events (Figure 2)
- Workflows guide through the process steps
- Possibility of building relationships with other processes and data models according to the organization’s maturity and process implementation status
Efecte’s native visualization capabilities can quickly implement risk-related reporting or integration with commonly used business intelligence tools. For example, a sample screenshot below (Figure 3) illustrates a risk overview report built with PowerBI.
The modular implementation enables you to start gradually. A natural starting point is a central risk register built around the “Risk” data model and associated risk assessment process. The risk register stores all risks systematically and functions as a basis for further extensions of the process. Natural places to extend the risk management framework and processes are risk treatment, -controls, -events, and interfaces to other related functions like incident- or change management.
If you are interested in improving your risk management based on Efecte or other solutions, contact Virnex. We can help you to uncover and manage critical risks for your business.