In the first part of this series, we spoke about what risk management is and why it is beneficial for your organisation to have a strategy around that.
Organisations have always been aware of the importance of managing and mitigating risk. At some point, every organisation will face risks while working on achieving its goals. Risk management can become an influential tool to empower competitive advantage.
Each year companies retain more third parties – from suppliers to resellers, and other partners. Even though these types of relationships provide growth for both parties involved, they can also mean more risks for your organisation, from supply chain disruption to fraud, data breaches, and the list goes on.
Companies need to understand who their third-party suppliers and relevant subcontractors are, what type of business they are doing with them, why and which of their third-party relationships are exposing them to risk. By collecting and understanding this type of information companies can minimise their exposure to uncontrolled risks.
An integrated risk management solution can help your company improve efficiency while protecting your brand. The benefits of managing risk proactively are immense and can maintain regulatory compliance while decreasing the compliance costs. Taking action and having proper corrective action plans as needed can be very useful for your organisation in the long term.
Steps for implementing a risk management solution:
Planning – this initial phase of the implementation requires establishing the guidelines and strategy that will input into the configuration and set up of the application.
Program development – a standard risk management solution implementation includes the definition, creation and activation of a number of programs which help configurate an automated business process. This stage includes the development of certain tasks and defining business rules and also configuration of programs.
Testing, Validation and training – this stage involves testing, training tasks and validation.
Program launch and ongoing support – depending on the parameters set initially some of the programs may launch immediately or some may extend into the future by several months.
It is important to understand your data – based on the line of business your suppliers are in; you need to make sure what the risks involved are and to have specific templates in order to capture this information.
There are new domains emerging requiring your companies compliace (InfoSec, Anti-Bribery, GDPR, etc) and the importance of getting the right information at the right time has never been more crucial.
The control of risk must be clearly defined and agreed with the individual owners. This will ensure understanding of roles and responsibilities. Individual owners should have the competence, authority and experience to deal with risks allocated to them.
Interested In learning more about solutions that can help reduce risks in your organization? Have a chat with one of our procurement specialists!