Added up with the IMR Strategic Plan, it is possible for one organisation to manage all the risks across the organisation while also achieving very long-term goals. Such an initiative guarantees an early identification and addressing of risks, thus preparing enterprises to face challenges. Internal effort alignment in the broader organisation ultimately helps achieve such wiser decisions for resource utilisation and overall effectiveness.
Integrated risk management (IRM) is a more disciplined form of risk management. Technologies are used to identify threats and the actions you take to mitigate these risks. It gives senior leaders at the organisation better insight into which threats pose the greatest danger, so they can make better decisions about how to respond.
Integrated risk management activities into the business are modified for better decision-making and more effective data attainment as a result of shared corporate objectives in line with business goals.
Integrated Risk Management refers to the systematic approach to risk identification, assessment and management across an organization. Unlike typical risk management which deals separately with risks as they are likely to arise, IRM will methodically and holistically examine risks from a much wider organization - would basically address the interrelations and interactions between the impact of these risks and their effects across the whole organization as well. Such an approach can avail numerous benefits to enhance the operational efficiency at which businesses run to ensure preparedness to meet challenges and to secure a long-term successful future.
To fully leverage the benefits of Integrated Risk Management and Strategic Planning, it is best to enroll in the Risk Management Strategies course offered by the British Academy for Training and Development.
Five main benefits of IRM are:
With IRM, decisions are all based on a clear understanding of risks and their potential impacts. In this regard, it helps leaders make smarter choices.
It provides a complete view of all risks to the organization such that no critical area is overlooked.
When decision-makers know about all the possible scenarios and levels of risks, they can weigh the options well and make a strategic decision that takes into consideration both risks and rewards.
For example, a corporation that is going to expand its operations into a new market is in a position to understand and evaluate all possible implications such as regulatory issues, competition, and supply chain matters, thanks to IRM, before taking any decisions.
IRM encourages organisations to identify threats early before those threats develop into significant issues.
The IRM solver shifts a quantitative investment from past cases into new proactive anticipation and preparation at the earliest possible date by asking the question, What is the risk?
The technologies as well as techniques of the modern-day iteration of IRM allow a business to continuously track its risks and have a real-time understanding of them.
Risk Management does not stop with just one team or department. Hence, IRM is a conglomerate effort.
Everyone-from electronics procurement to operations-works to identify and manage risks.
Open frank discussions regarding risk are, at least theoretically, expected to provide better knowledge and solutions.
Resilience entails having the ability to bounce back and adapt rather quickly in the face of challenges. IRM makes organisations resilient in that it prepares them for uncertainties.
Through IRM, businesses can strategize on dealing with cyber-attacks, natural disasters, and changes in economy and respond rapidly to damage minimization.
Organisations tweak their strategy and operations to manage unexpected events while still moving forward.
For example, businesses with IRM strength were better able to meet the remote working, supply chain and customer demand impact needs of the COVID-19 pandemic.
Timely and effective management of risks in organisations saves considerable time, money, and resources.
Risks should be detected in time because when they are detected early enough, preventive actions may be taken that then reduce financial losses or penalties.
Optimised Resource Allocation-arbitrary use of resources Allocation by IRM directs all resources to and even deprives the ability to waste on low or low-impact risks.
Companies that invest in cybersecurity to prevent potential breaches will avoid the much higher costs associated with recovering from an attack.
The merger of risk management and strategic planning has ensured that an organisation attaches its goals with its ability to manage uncertainties from an overall perspective. Help organisations to recognise, analyse, and mitigate risks which may be faced while achieving objectives. These are the steps in the integration of integrated risk management with strategic planning:
Clearly define and communicate the mission of the organisation and its aims for the future. This includes defining some specific, measurable objectives related to that mission and vision, which are achievable within the limited resources and internal capability of the organisation: Suppose one has the term 'technological saber,' one such specific goal would be the goal of innovating AI-based solutions while complying with data regulations across geographies.
Appraise the internal strength and weaknesses of the organisation with its resources and internal processes.
Conduct PESTLE (Political, Economic, Social, Technological, Legal, Environmental) analysis or SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis for external factors and trends in the industry.
This step helps organizations to forecast the challenges and opportunities of their environment.
Establishing instruments like brainstorm sessions, risk workshops, and reference history in identifying potential threats at strategic, functional, and external levels against the
Evaluate potential benefits or competitive advantages that could be utilized. A manufacturing organisation might identify supply chain disruption as a risk and view automation technology as an opportunity.
It involves a definition of the strategic direction of an organization, and an activity plan for achieving its ends, hence serving as a map of decision making, resource allocation, and priority for operations. Here below are the some benefits of strategic planning in simple terms.
Important planning would not only make a clear statement and direction for the organisation's mission, vision, and goals but also help achieve a satisfying and purposeful picture of what's to come.
Everyone knows what the organisation wants to achieve and why. An example is perhaps a company that wants to be the dominant player in sustainable products.
Conformity of effort- it creates the right moment by which teams and departments will invest their efforts in a few activities that lead towards goals, rather than ending up lost in tangential activities or efforts.
All these clearly stated objectives ensure that everyone is "rowing towards the same goal".
Integrated Risk Management approach and Strategic Planning are like two sides of the same coin, working together to make it easier for organisations to manage future risks and reach their long-term objectives through this practice. These strategies align resources and decision-making and efforts across the organisational structure, thereby helping mitigate uncertainties, optimising performance, and increasing the resilience of this entity.
With a maximum direction-cohesion approach, businesses can navigate much more easily through the challenges they face while also seizing opportunities.
For more guidance on implementing these strategies, the British Academy for Training and Development offers comprehensive training in Integrated Risk Management and Strategic Planning.