Integrated Risk Management (IRM) is about strategizing an approach to IT management and the operational risks associated with it. Experts define IRM as a set of practices supported by a risk management process that helps improve performance and decision-making. IRM is also a measure of how well an organization is equipped to manage its unique risks.
IRM involves all business functions. However, it may also include functions not connected to the conventional definition of risk management, such as public relations and human resources.
Unlike enterprise risk management, IRM is less about strategy and more focused on direct risk management. This is done by monitoring controls of the technology and the systems.
With businesses increasingly going digital, many are taking a more holistic approach to risk management strategy. The risk comes from possible instances of data breaches, theft of intellectual property, and the hugely incapacitating ransomware.
IRM does not only address cybersecurity. It takes into account every type of risk. In human resources, for instance, IRM looks into background checks and helps identify candidates and employees who have fabricated their resumes. To protect their business, IRM helps organizations avoid or respond to these risks quickly.
The Key Components of IRM Are
Creating an IRM strategy help organizations align their risk management actions with business goals. They can create a risk profile connecting specific risks to the organization and decide on the level of risk they can handle.
The risk assessment process includes recognizing the current and new risks. Organizations must perform risk analysis based on the level of threat they pose. So, taking a comprehensive view of risks across the board is vital in IRM.
The next step is to decide on how to handle risks. Constructing an appropriate risk response related to its priority level is essential to keep business operations running smoothly. Organizations must determine if they must accept, avoid, or mitigate the risks and act accordingly.
Informing all the stakeholders of risk strategies and the planned responses to risks helps create awareness across the organization.
Effective management of risks also involves constant monitoring of the metrics and business security processes. Moreover, monitoring can keep an organization informed on whether it is meeting its risk objectives.
Are you still using spreadsheets to manage and monitor risks? If so, that in itself is a considerable risk. In this digital age, your manual efforts at risk management can fall woefully short of expectations. Likewise, most organizations depend on advanced software solutions to manage risk and ensure compliance with risk management strategies.
Implementation of IRM
There are three steps every organization must follow for implementing an integrated risk management program.
Align Your Cyber Risk Strategy With Business Goals
The IRM team must act as the communication link between cybersecurity professionals and other business stakeholders. So, align cyber strategy with business goals that the management has charted out. This critical alignment is necessary to create a sense of confidence that the business can go ahead as risk potential is suitably minimized.
Facilitate a Culture of Risk Awareness
An attempt to tinker with the culture of an organization is not easy. However, when it comes to creating awareness about risk, there is no option. A culture of risk awareness must be made across the board. It can be achieved with proper focus and planning.
Incorporate Risks in Your Business Strategy
Introducing effective risk management initiatives can help create an environment of confidence and positivity. It can also help spur corporate growth. Integrating risk management activities with business objectives is a proven way of ensuring smooth business continuity.
What Are the Benefits of IRM?
Integrated risk management strategies take into consideration all the possibilities associated with business growth. It doesn’t just mitigate or nullify the negative factors. A detailed assessment of business outcomes also can help identify opportunities and boost future potential.
Risk Identification At An Early Stage
IRM helps create an early estimate of risk. Additionally, they do it pretty accurately too. This advanced risk analysis depiction helps organizations make better decisions. Moreover, risks can be quickly identified and effectually shared between various departments.
Organizations implementing IRM-based plans place themselves in a better position to deal with unforeseen risks quickly. They can prevent losses or at least cut them down significantly. Also, better control over possible risks to your business and adequately planned responses can limit financial losses and help you achieve business goals smoothly.