The integration of strategic management and risk management processes improves the financial and operational performance of the organization, both in the short and long term. Do you use operational risk management (ORM) as an organizational imperative? Effective management of operational risks will increase the visibility of senior management and encourage more informed risk-taking. Integrating ORM strategy, tools and processes into your organization's objectives will improve product performance, increase brand recognition, and generate sustainable financial results. Risk management is the process of identifying, evaluating and controlling threats to an organization's capital and profits.
These risks come from a variety of sources, including financial uncertainties, legal liabilities, technological problems, strategic management errors, accidents, and natural disasters. As the Lawton report on the trends that are reshaping risk management shows, the field is full of ideas. The risks faced by modern organizations have become more complex, driven by the rapid pace of globalization. However, from now on, they will face new risks, such as how to get employees to return to the office or whether to do so, what must be done to make their supply chains less vulnerable, the threat of a recession and the war in Ukraine.
In addition, the use of data in decision-making processes can have poor results if simple indicators are used to reflect complex risk situations. However, as technology journalist George Lawton pointed out in his analysis of the most common errors in risk management, risk management that goes wrong is often due to avoidable errors and a common search for benefits. More and more organizations are adopting a risk maturity framework to assess their risk processes and better manage the interconnection of threats across the enterprise. The ultimate objective is to develop the set of processes to identify the risks faced by the organization, the probability and impact of these various risks, the way in which each of them relates to the maximum risk that the organization is willing to accept and the measures that must be taken to preserve and improve organizational value.
They are re-studying GRC platforms to integrate their risk management activities, manage policies, carry out risk assessments, identify gaps in regulatory compliance and automate internal audits, among other tasks. They must also better prioritize, understand and articulate the materiality of risks in order to make informed decisions that balance the needs of the organization, the demands of customers and customers, the specifications of products and services, and the requirements of shareholders. Both take out insurance to protect against a variety of risks, from losses due to fire and theft to cyber liability. For example, the CIO or CTO is responsible for IT risk, the CFO is responsible for financial risk, the COO for operational risk, etc.
We challenge conventional thinking about ORM by remodeling or adapting the design, approach and capabilities of the typical operational risk framework. This holistic approach to risk management is sometimes described as business risk management because of its emphasis on anticipating and understanding risk across the organization. The former work in companies that see risk as a cost center and risk management as an insurance policy, according to Forrester.