Risk has always been an important consideration for businesses. When our ancient ancestors began growing their own food, there was the risk that something could wipe out the crops – such as bad weather, disease or insects. Of course, that’s a risk that still exists today. In fact, in the thousands of years since humans began trading and selling goods and services, it seems that very few risks have disappeared entirely – while plenty more have emerged.
These days, the business landscape can transform quickly. It might sound cliché to say things can change in the blink of an eye, but it’s also accurate – and that means that risks turn into threats (or opportunities) in an instant. The key is to be ready and know how you’re going to react – and that’s the point of risk management.
The changing face of risk management
It wasn’t long ago that risk management was thought of as more of a box-ticking exercise. Something to do occasionally, share it with a few stakeholders then put it away and not think about it again for a few months, or even years.
But the pace of business has quickened. Events have a more immediate effect on your operation, and global developments can affect your organisation as much as local activities.
That means that the way you manage risk also needs to change. In the modern world, businesses need to take a dynamic approach to risk and use flexible tools that allow you react to rapid risk changes – and your old spreadsheets probably aren’t suitable.
The problem with spreadsheets
There’s no doubt that spreadsheets are convenient, and tools like Microsoft Excel and Google Sheets are very good at what they were designed to do. But these programs are meant for crunching numbers – not managing something as complicated as risk – and as soon as the spreadsheets get too complicated, they become slow and difficult to use.
Human error can also cause problems when using spreadsheets – a mistyped function or numbers put into the wrong column could cause a calculation not to work. Potentially even worse, a mistake could mean you get a result that looks valid but is entirely incorrect and which leads you to make an ill-informed decision.
Upgrading to dedicated risk management software can remove the problems associated with spreadsheets. It can also help you track project risk and compliance requirements, and will provide tools for advanced risk scoring and analysis. This, in turn, can assist in identifying emerging risks (and opportunities) and highlighting the relationships between risks.
It’s not just your software that may need an update
While we would love to be able to say that new software is all you need to bring your risk management function up to date, the truth is there’s far more to it than that.
In today’s world, risk forms a background layer under every aspect of your organisation, and a modern approach needs to be both comprehensive and adaptable to deal with the changing nature of business.
● Customers – Customer expectations are constantly expanding, and people want a personalised service that’s always available. So, while your business is speeding up and operating at a globalised level, it also needs to slow down and consider customers at an individual level.
● Compliance and regulation – Data protection, health and safety, financial controls; the list of rules and requirements goes on and on and is different for every sector. What’s more, your compliance and regulatory responsibilities also change over time. As part of your risk management strategy, you need comply with these requirements.
● Budget cuts – In modern business, cutting costs isn’t necessarily a sign that an organisation is failing. Technology, new processes and streamlining exercises mean that teams must find ways to do more with fewer resources. Effective risk management can help you to make these cuts strategic and with the least amount of risk.
Risk management software is for everyone
It’s more common to find risk management software already in use in larger organisations – businesses in highly regulated sectors like finance, energy, utilities and government. In these markets, key areas of concern include fraud, cyber security and safety issues.
But risk management software can also help smaller organisations, and the tools available can help businesses of all shapes and sizes to better consider risks and opportunities, and embed this thinking into the decision-making process.
It’s all about the data
In what is now being called the “fourth industrial revolution”, one of an organisation’s most valuable assets is data. The amount of data a company holds expands constantly – but if you’re not leveraging that information, you’re not realising its full value.
Effectively gathering and analysing the relevant data can be a challenge for any organisation, and one way to make the process easier is to step away from a spreadsheet-based system and move to a more solutions-based approach.
Specialist risk-management software is designed to help you leverage your data and, not only do these tools make it easier to gather and organise information, it can also make it possible to generate reports and access historic data with just a few clicks.
This essentially transforms raw data into useful information, which you can use to spot trends inform decisions and reduce risk – whether you’re looking to cut costs, invest in infrastructure, improve procedures, or expand your business.
A strategic approach
No matter what industry you’re in, the modern world moves fast and can seem increasingly volatile. Today’s risk managers need to take a strategic approach to how they identify, analyse and mitigate risks, while also making the most of opportunities.
Where spreadsheets may have once fulfilled this purpose adequately, a more specialist and flexible solution is now essential – such as JCAD CORE. As a market leader with more than 25 years of experience, JCAD provides a simple but effective solution for risk management, and our clients range from telecommunications to local councils.
To find out more about how JCAD CORE can help you to improve your risk management and start making better strategic decisions, please visit www.jcad.com or call 01730 7120 020 for more information.