Posted: April 30th, 2021 1:01pm +00:00

How the pandemic has effected risk management practices

No one could have predicted that the global pandemic would have had such a long-lasting impact across the world. It has affected all of us regardless of where we work and for whom and it will change the way we live for years to come.

 

With this in mind JCAD has recently surveyed its clients to gain an insight into how the pandemic has affected their risk management practices. We wanted to discover how prepared they were for the pandemic; how successful their mitigations had been in ensuring business continuity and how risk management would change because of the pandemic.

 

Key takeaways from the survey

  • Risk management was fairly well embedded for 69% of respondents.
  • Fifty-five per cent of respondents said a pandemic did not feature on their risk register.
  • Sixty-nine percent of respondents said risk management is now considered more strategic and a greater priority within their organisation.

View the full results.

 

These are interesting results not least because they come from a group of people already well versed in risk management and from organisations who have obviously already invested in personnel and systems to better embed risk management. One wonders whether responses would have been markedly different if the respondents had no dedicated risk personnel and no software.

 

Let’s take a look at the first key takeaway. This is a positive statistic but not particularly surprising considering our clients have invested in our tools to improve upon how risk is managed. That said, it still leaves a third needing to improve. We have seen our customers continuously strive to embed risk management within their organisations and an increased number are benefiting from support from the board and high-level management.

 

Risk management has been propelled in importance in recent years due to certain crises, the pandemic being the most recent. Hopefully, this will continue to improve with organisations moving into the very well or extremely well embedded category within the next 12 to 24 months.

 

The second key take away illustrates the relative ease of identifying the internal risks facing an organisation and conversely the difficulty of identification of external risk. These external risks are often less predictable and of course harder to manage!

 

Some people have argued that the pandemic should not only have been predicted but expected due to overpopulation and extensive global travel. The good news is that even though 55% did not have a pandemic on their register they were able to respond to the pandemic efficiently and their controls and mitigations were successful. If the risk had been identified and mitigations been considered earlier then perhaps the success levels are likely to have been greater and the impact on the organisation reduced too.

 

The third and the most positive key take away shows that risk managers have a great opportunity here to propel risk management further within their organisation and improve ‘buy in’ across the business. Effective risk management will improve an organisation’s decision-making and help to ensure the achievement of their strategic objectives.

 

Tim Crawford, Operations Director, JCAD: “As a result of the pandemic, we have seen an increase in demand for our risk management software, CORE. There is a desire to move away from using Excel spreadsheets and take risk management more seriously to ensure organisations are resilient. Shifting from being reactive to organisations having a more proactive approach to risk management is a very positive outcome”.

 

For many businesses in the more immature stage of risk management, Excel spreadsheets are often used for managing risk. Eventually, an organisation’s requirement for risk management will outgrow Excel spreadsheets. The main reasons for moving away from Excel spreadsheets are that they are difficult to version control, are not easily auditable and usually rely on one person owning and storing them.

 

The most successful risk management within organisations are those where each department takes responsibility for identifying their own risks with risk champions guiding and ensuring regular reviews occur. As organisations enhance their risk management processes, they often invest in a risk management tool. JCAD is pleased to offer an affordable online risk management tool that helps enhance the embedding, accessibility, and visibility of risk management across the whole organisation.

 

Graeme Mackenzie, President, ALARM: “From JCAD’s survey results, it is interesting to see how a global event like the pandemic, will have permanent implications for public sector organisations. The pandemic has been a largely negative experience across the board, however it is refreshing to see that organisations have been able to gain some takeaways from it such as the value of risk management.”

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