An organization can achieve improved business outcomes and growth by utilizing the right technology in conjunction with an Integrated Risk Framework
We are in the information saturation era, where information is easily available but effective and timely utilisation of the same via an automated digital framework is always a challenge for organisations. Furthermore, rapidly changing technical, business, regulatory, and compliance environments require complex process implementation that carries inherent risks.
Ineffective process implementation will lead to operational complexity and additional efforts by the process executors which impact the core objective behind process implementation. hence, interaction between digital transformation and effective risk management is a need of the hour.
What is IRM?
It’s a business environment where risk is inherent in business activities and operations, and there is always a trade-off between business and risk. In recent years, business has found itself in unexpected scenarios that might not have been part of the original plan or strategy: digital business operations, global platform and competition, outsourcing to third parties, and other circumstances have further uncovered new business risks, which is why the scope of risk management is increasing day by day.
Security services, including consulting, hardware support, implementation, and outsourced services, is the largest category of spending, at almost $72 billion in 2022, and expected to reach $76.5 billion in 2023 (see Table 1).
Why IRM is important?
As per RuggeroContu (senior director and analyst at Gartner), spending on information security and risk management products and services is forecast to grow 11.3% to reach more than $188.3 billion in 2023. Cloud security is the category forecast to have the strongest growth over the next two years. As organisations increase their focus on ESG, third-party risk, cybersecurity risk, and privacy risk, Gartner forecasts that the integrated risk management (IRM) market will show double-digit growth through 2024, until greater competition results in cheaper solutions.
Where do I start with IRM?
Integrated risk management is a facilitator that guides organisations towards the right path, shows timely progress, and enables them to achieve their planned strategies.
Risk management professionals can adopt the approach to developing an IRM programme and bridging the gaps between enterprise risk, cybersecurity risk, and digital risk to cover the overall aspects of operational risk, including:
- Establishing an effective framework suitable for the organisation’s risk profile.
- Developing a risk culture to identify how risk influences the behaviour and ability of people to achieve the organization’s goals.
- Using a methodology to design, implement and integrate all systems to proactively extract risk data and convert it into meaningful risk information for effective decision making
Benefits of digitalisation and IRM
Successful implementation of digitalisation and integration of the same with risk management programs results in better decision making and business outcomes which supports:
- Building overall confidence and provide assurance to stakeholders about safe and scaled business environment by proactively managing risks in line with planned strategies.
- Easy understanding of new risk, regulatory and compliance requirements that equips organisation for effective and timely entry into new markets, geographies, or products
- Translate and address the complex and evolving best practices/regulatory environment.
- Building organization’s matured risk management culture to proactively mitigate future digital and business risks.