Budgeting for a Better Risk Management Information System (RMIS)
Sep 26, 2023
With the end of the year coming quickly, budget season is kicking off. As organizations begin to make plans for next year it’s imperative to ensure that your needs for a RMIS (Risk Management Information System) are considered in the budget cycle if you are looking to deploy one in the upcoming year.
Acquiring a budget takes careful planning and thought. The following is a quick guide on best practices for securing your RMIS budget based on the experiences we’ve seen during our time at Aclaimant!
1. Determine Why You Need a RMIS
Before you begin, the most fundamental question you must answer is, “Why do you need a RMIS?” What is the problem you are trying to solve and what goal are you trying to accomplish? Being clear on this from the outset ensures that the rest of your process is aligned to accomplishing that goal.
2. Assess your organization’s current needs and pain points
Before approaching decision-makers for budget approval, it is crucial to evaluate your organization's specific requirements. This assessment will allow you to highlight the benefits and return on investment (ROI) of implementing a RMIS, making a persuasive case for budget allocation.
Consider the following:
- The nature of its operations. What industry is your organization in? What is currently needed to ensure a safe working environment?
- The potential risks it faces. What types of incidents tend to occur on a regular basis? What are the size and number of the claims you are handling that result in losses for your team?
- The size of your organization. How many employees would potentially need to use the system? How much revenue does your organization make on a yearly basis?
- What are the primary challenges you face today? What problems would a RMIS solve? Can you point to specific losses or inefficiencies that are caused by manual or disjointed processes?
3. Understand your company’s budgeting cycle
Each company’s budget cycle can be unique and specific. Having insight and visibility into the budget and approval cycle is important for understanding how to allocate your time.
To understand your company's budgeting cycle, here are five questions you can ask:
- When does the budgeting process typically start and end in the company?
- Who are the key decision-makers involved in the budget approval process?
- What are the specific steps or stages involved in the budgeting cycle, and what guidelines must you follow?
- How do new budget items get allocated or approved?
By asking these questions, you can gain insights into the timeline, stakeholders, procedures, guidelines, and alignment of the budgeting cycle within your company. Keep in mind, you may have organizational, departmental, or company-specific budgets that may be available to you
4. Socialize the concept early on with key team members
Once you understand the budgeting process, the next step is to engage with your team early. Engaging in this way before budgeting is in full swing will help you understand the soft side of the process and ensure the team understands your ideas.
Some of the key goals to accomplish in early socialization is:
- Ensuring you have open lines of communication with those involved in the budgeting process
- Understanding if there are other considerations while validating what you already have mapped out, all to ensure that you are allocating your time and efforts accordingly
- Planting the early seeds of potential improvement areas for the organization so later on in the process you may build on these early concepts
Setting expectations on follow-ups, timelines, and procedures to ensure you have your RMIS budget allocated during the year-end process
5. Engage external RMIS experts
Incorporating RMIS into your organization can unlock incredible value in your organization. Even though you may be the Risk Management expert in your organization, engaging an external organization who has a long track record of RMIS expertise can round out the information you need in your process.
Working with an organization like Aclaimant can help you to understand the key components you will need to build out your business case for deploying a RMIS. These can include:
- Understanding how other organizations have codified their needs and the value associated with a RMIS to demonstrate how others obtained budget for a RMIS in their organizations
- Pinpointing how others quantified ROI for their organizations
- Gaining insight into the actual cost of a RMIS solution so you can ask about the correct amount of budget.
- Leverage an expert team who has gotten numerous budgets approved and helped numerous risk managers work through their approval processes to understand the process items you may or may not be thinking about
6. Create a proposal to quantify effort and ROI
Prepare a detailed budget proposal that outlines the estimated costs and benefit associated with implementing an RMIS.
Include the following:
- A list of expenses such as software licenses, implementation and training costs, ongoing maintenance, and support fees.
- A transparent summary of cost estimates to demonstrate that you have thoroughly researched the factors behind budgeting for the project
- An understanding of the business return on an investment in RMIS
7. Educate key stakeholders
Before you seek support for your proposal engaging your key stakeholders is critical. Not many individuals in most organizations have experience with a RMIS solution. Helping your stakeholders understand the pain points, use cases, and benefits that other organizations have found—as well as the cost of inaction—can lay the groundwork for your proposal process later on.
Key stakeholders to consider can include:
- Your team and your supervisor
- Your organization's finance department (especially their leadership)
- Your organization's overall executive team
8. Seek support and present your proposal
Once you craft a compelling business case and a comprehensive budget proposal, it's time to set up a meeting with your stakeholders where you can articulate the benefits of a RMIS and the value it will bring to the organization. Be prepared to walk your team through any concerns as you highlight the positive impact an RMIS can have on workflow, regulatory compliance, and overall claim costs.
Implementing a RMIS can significantly empower your organization ability to be more proactive about handling risk. By following the steps we outlined, you can create a persuasive argument for budget allocation and increase the likelihood of securing the necessary funds.
Taking the opportunity to plan ahead for your budgeting process can improve your likelihood of success in achieving your end goals.
Reach out to the Aclaimant team to learn more about how help organizations in a variety of industries make the case for a better risk management approach, or schedule a demo of Aclaimant’s own RMIS to see what organizations like yours are using today.