SUPPLY CHAIN RISK MANAGEMENT BLOG

How Can Risk Maturity Model Benefit Your Risk Management

Dec 22, 2014    Sophia Wright

 


ERM software, with its state of the art facilities and options, has already gathered a top place in day to day operations of business organizations. Being an essential tool to recognize and manage the potential risks business organizations face, Enterprise Risk Management Software Solutions have given many options for risk managers to rectify their previous strategies that failed in managing potential risks. If you want to improve your enterprise risk management programs, Risk Maturity Model is one of the tools you need. It is a free assessment tool for managers and executives in the risk management department of a business organization. Risk Maturity Model helps you to improve your risk management program and you will be provided an instant report. The analysis, based on guidelines set by the model, will act like a roadmap for your organization’s improvement.

All risk professionals and their internal auditors may require Risk Maturity Model to check whether their risk management programs are meeting expectations and it may even give you potential information on how to make most of your ERM’s potential. No matter which risk management standard you have in your organization, this tool will be of great help in making your strategies for risk management better. Nowadays, it is very important to build a sustainable ERM program that can offer a direct link to your enterprise’s performance. It needs bench marking of your capabilities as a business organization to spot your weakest area and to know what can be done to improve your enterprise in that particular area.  

Many ERM solutions have the benchmarking tools that can lead you to the right path of improvement and will be available from the day one of their installation. Benchmarking can also give you a vivid picture of where your ERM solution stands. Some ERM programs have a built in Risk Maturity Model in themselves. It could be broken down into many other sections with each section focusing on various core attributes of ERM. These areas will be further broken down into many other success factors and competency drivers that can tell you whether your ERM program is in perfect tuning.

Some benchmarking solutions help managers to assess their enterprise’s adherence to industry standard and examine the company’s process performance, CAPA management and prioritization and issue escalation. It can also guide you to explore staff training and policy development and learn more on preventive action statistics. Till now, it is reported that 2000 leading organizations have used Risk Maturity Model to baseline their capabilities and improve their risk management process.

A recent third party study of ERM solutions proved that enterprise risk management maturity as calculated by Risk Maturity Models added 25 % to a business organizations bottom line value. In general, Risk Maturity Models must act as a step-by-step guide on how to install, improve and measure the adoption of ERM’s best practices defined by ISO, COSO and ERM standards. The RMM is usually broken down into many attributes and process, tools, resulting culture and structure that permit organizations to comprehend the potential opportunities while handling surprises and adverse events.

Enterprise Risk management, as analyzed by RMM, is very effective in recognizing and solving cross functions or silo challenges and gaps by offering a common framework. Risk Maturity Model usually breaks down your risk management solutions into practical requirements and enables the present capabilities of your enterprise while offering proper guidance for the future.

The seven important characteristics of Risk Maturity Model are these:

  1. Risk Appetite Management – Policy to lead decision making and responsibility within guidance
  2. Managerial support within the corporate culture
  3. Unites events with process sources
  4. Executing strategy and vision using the balanced scorecard
  5. Revealing risks – assessing risks to document both risks and opportunities
  6. Business sustainability – seamless integration to operational planning

 

One of the main goals of RMM is to improve the business enterprise’s ability to handle risks while discovering the connection between ERM maturity and business value.

 

About The author:

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Sophia Wright is the Marketing Executive. She worked in several process improvement projects involving the multi-national teams for one of the best companies in the world. She has over 5 years of experience in ERM risk analyzing processes and as a practicing manager of Business analysts, successfully executing several projects in Risk management strategies, ORM Software solutions, Governance risk compliance. Now share your thoughts on HOW HEALTHY IS THE ERM CULTURE IN YOUR ORGANIZATION?.

 

 


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