What does the ERM Implementation Process Look Like?
Dec 27, 2021
Enterprise risk management (ERM) is a top-down approach to risk management used to identify, analyze, and manage areas of exposure in an organization. Typically scaled across large enterprises, an ERM framework includes a wide range of risk management processes, from compliance management to risk analysis.
A successful ERM program helps improve risk identification and mitigation across business units. But due to its scope, implementing an ERM framework and technologies requires extensive resources that not all businesses have.
4 steps in the ERM implementation plan
While an ERM platform may not be the right fit for every infrastructure, an organization’s ERM implementation process looks different depending on its risk profile and business objectives. In general, these are the steps involved when implementing an ERM framework:
Determine whether an ERM is right for you
While an ERM framework is an effective approach for large companies with abundant resources, it may not be the best option for small or medium-sized organizations. Its implementation is costly and often requires a third-party consultant. Additionally, you need to consider your organization’s risk appetite, and whether an ERM will adequately address the required risk mitigation strategy.
Layout your ERM framework
If you decide to move forward with the ERM approach, you can develop your own framework or use a standardized model. Developing an internal framework is significantly more resource-intensive, but a standardized model may not be as configurable to your business objectives. Be sure to determine the roles and responsibilities of team members to ensure there’s no overlap in task coverage. Identify who your stakeholders are, how you’ll measure performance, and how you’ll make risk management decisions to achieve better business outcomes.
Identify and assess risk
Depending on the organization’s business objectives, risk assessments can cover anything from cybersecurity to strategic risks. After identifying the most prevalent threats to your business, you need to conduct continuous risk assessments and report on preliminary progress. Carrying out regular risk assessment reports will help your team evaluate how security vulnerabilities will impact business continuity and operations.
Pivot as needed
If at any point in the ERM implementation process you find yourself thinking it’s not the right route for your organization to take, rest assured you’re not alone. If an ERM framework is too large-scale for your business and you don’t have the resources required, there are alternatives worth exploring — and it’s never too late to pivot. If you’re a small to medium-sized business looking for a risk management solution, you should consider a risk management platform. A risk management platform is a more nimble alternative that doesn’t require a third-party consultant to implement. It provides a cost-effective, streamlined, and user-friendly experience.
An agile alternative to ERM
As the risk landscape continues to grow more complex, organizations of all sizes need a way to effectively identify, assess, and mitigate risks. And in reality, an ERM framework isn’t the best option for every business. With Aclaimant’s risk management platform, you can conduct risk management on a single platform and in real-time.
Learn more about Aclaimant’s connected, insight-driven risk management solution.