Risks can be one of the most frustrating aspects of a day at work, especially if you’re involved in high value business. The majority of businesses will have hundreds if not thousands of potential risks to identify. Whilst this can be a good source of ‘free’ business ideas, the real cost is when those risks become front line management issues for your business. This is where risk software comes into its own – simple to use software risk (either an open source or commercial solution) which enables organisations to quickly identify which activities and risks require closer monitoring, and then react to them quickly and efficiently.
There are many different types of risk software applications available, each tailored to the needs of a particular organisation. These can range from general risk management programs, through to more specific niche applications, such as those focused upon finance or supply chain management. Many companies however, choose to use a more general type of risk management program. For these businesses, there are some key considerations to keep in mind when selecting a risk management program:
Cost vs. Capability In terms of cost, a risk management solution may be a good start, but its most important quality is that it be able to deliver on its promise. In addition, many organizations buy risk management solutions because they have a deadline to meet, usually their annual IT maintenance or annual compliance obligations. If the application isn’t robust enough to handle all the changes going on within the organisation, it may be doomed to fail. Therefore, make sure you check that the software you are thinking of buying can be easily customized.
Flexibility vs. Complexity Another key point to consider is that as your business grows, so do its requirements. If your risk software was bought yesterday, how quickly would it grow in relevance as your organisation grows? Some risk management tools are far too complex and very difficult to update. Others may lack enough flexibility to grow as your company grows.
Regulatory Compliance Another key consideration is compliance. Many organisations, both large and small, are looking towards risk management software to comply with statutory obligations. If your solution doesn’t offer sufficient flexibility to allow you to stay compliant, you may find it harder to stay in business. Look for a provider that offers a comprehensive range of options that can be tailored to suit your individual circumstances.
Scalability Most importantly, ask whether the risk management software that you’re looking at can scale up as your organisation grows. As your business continues to expand, the size of your data storage, customer databases, customer relations and product records will grow, as will the number of individual risk management tools to manage them. For example, if your customer database is set to hold 100 million records, then you’ll need a separate tool to keep track of those records individually. Most software packages offer scalability as an option.
Metrics Some people worry about the number of metrics in a risk management package. It can be hard to know which ones are important for you and which aren’t. However, when it comes to key performance indicators (KPIs), it’s best to stick to those numbers. KPIs such as average cost-to-accelerate (ACCA) ratio, sales revenue to cost of good sold (SCDF) and cost to sell (CSP) are considered the standard. But what if your customer database has five million records? You need a different metric.
Flexibility There are a variety of risk management tools available. For example, you may already have a CRM system that you’re very comfortable with. If so, you may wish to stick with that system. However, some companies choose to replace existing CRM systems for the sake of flexibility, especially when they’re looking at new opportunities for growth and more risk.