Every risk manager is faced with the challenge to select the best operational risk management software (ORMS) for a company. The business world is heavily dynamic today and risks are hard to decipher because of that.
To be informed about changes, up-to-date with risks and pick the right ORMS application is definitely worth the time as they boost the progress of an enterprise.
Designing an ORMS program, customized to serve the needs of an organization is the finest option. For most organizations however, affordability and productivity are questionable. Hence, the safest choice is to approach ORMS vendors. If you have taken the decision to buy the solution, there are a few factors you have to keep in mind.
Of course, you need to be thorough with your business processes and operations and be clear about the requirements. The aim of installing software for operational risk management is to help achieve the objectives of the company and give it an upward swing. But remember, an efficient execution of the solution can be performed only if risk and control awareness is carried out across the organization.
Here are a few features that should necessarily be a part of your operational risk management solutions:
A risk tracking process
An automated risk identifying, assessing and measuring program is ideal in an operational risk management software technology.
Consistent and organized monitoring of events is requisite to detect risk exposure at individual and enterprise levels. ORMS should help you conduct a quantitative and qualitative analysis of the identified risk. Risk levels and risk mapping easily allow you to spot and prioritize hazards.
Risk control self-assessment (RCSA) is included in most of the latest operational risk management software products. It enables risk professionals to identify risks and related control measures with the assistance of a process owner. Currently, there is a list of ORMS featuring a built-in library of risks and risk controls specific to business industries.
Identifying the instigating events and capturing the root causes
Your operational risk management software should be equipped to expose the events and root causes that led to a risk origination. This is the lead towards mitigating risks, avoiding loss and evaluating loss expectancy.
ORMS should be designed to oversee the event time charts and cycles to trace the risk causes.
Prompt risk notifications
ORMS should have its key risk indicators in place, coupled with relevant risks from the repository. Automated notifications should be delivered to indicate the breach of risk thresholds in a timely manner.
Providing a heat map at earlier stages that signifies risk position even before they approach is a commendable software solution.
Report generation catered to stakeholders
An ORMS should function to deliver heat maps and reports customized to each stakeholder's needs. The reported information should be sufficient and timely in order to allow optimum decision making.
Timely reporting is a process in which operational risk management data will be integrated across different functions and updated on a real-time basis, prior to report generation.
These are the basic requirements of ORMS for any business.
The software solution is a must to handle enterprise risks for big corporates and multifaceted enterprises. ORMS for financial services is selling high in the banking and finance sector today, and it is proving beneficial for being able to control their complex organizational infrastructures.
An ORMS solution should be embraced, not just to comply with regulatory norms, but to attend to your business-specific needs and get you the upper hand in the market.