The word “risk” is used by many people in their daily lives. But do we really know what we mean by risk? Well, a risk is any chance of something happening that will have an impact to an organization. Risks cannot be eliminated completely but they can be controlled. One way of doing this is by implementing an effective risk management program such as an Enterprise Risk Management system.

“Why do we manage risks? We don’t manage risks so we can have no risk. We manage risks so we know which risks are worth taking, which ones will get us to our goal, which ones have enough of a payout to even take them,” Alla Valente. Senior Research Analyst.

Where does an ERM System fit in an Organization?

Let’s use a scenario so that you can have a better understanding of how the ERM functions as a service.

A thief breaking ind

A scenario where you are working in the Security department and the perimeter wall of your department’s building has security guards watching over it. Nevertheless, there are no biometric systems to limit the access to the department’s data storage room. The CCTV cameras inside the premises are dysfunctional or not recording. How do we approach such an issue with an ERM in your organization?

Ideally, a risk management officer will identify the risk as lack of a biometric system or the dysfunctional CCTVs. Then, the risk will be categorized under physical security. Thereafter, some steps are taken on measurements and assessments of these risks identified.

The case scenario above has the confidentiality, integrity, availability and accountability of data at risk, making the risk score high. As a result, mitigation of the risk should be reviewed immediately. This could entail buying new CCTV cameras or repairing the dysfunctional ones. There should also be a plan to install a biometric system at the data store room. This will improve the overall security of a data center.

In Summary

An Enterprise Risk Management will be a great asset to an organization that implements it in every process. This is because of its ability to maximize profits and minimize losses. To add on that, an Enterprise Risk Management will create a more risk focused culture among its stakeholders and shareholders. It will also give the top-level management a chance to evaluate risks at a competitive position. This will help them exploit certain market opportunities conveniently. In addition to that, there will be effective coordination of rules and regulations such as compliance and auditing.