Riskology

With greater focus being placed on the risk control environment these days, the challenge for a lot of risk managers is how to be across everything. The big benefit to living in the information age is that technology can be used to create a virtual centralised model via a decentralised approach.

The big benefit to living in the information age is that technology can be used to create a virtual centralised model via a decentralised approach. Risk systems facilitate this by allowing users from across the business to identify, assess and manage their risks yet retain it all in a centralised repository where you can leverage all this varying information to create a holistic view of an organisation’s risk environment.

Risk Models 

In a decentralised risk model, the benefits lie in that business areas are empowered to identify, assess and manage their own risks. After all, who better to understand the risk environment of their patch than those working in it.

With that said, decentralisation can have its downsides. One such downside is it can often be difficult to ensure consistency in information being captured. This poses a problem because consistency allows for greater analysis and insights to be drawn on the importance of key controls and the risk exposure your organisation may face if there were to be a control failure.

Unfortunately, irrespective of how robust your risk frameworks are, humans are unique and express themselves differently whether through physical gestures or the written word and therefore how risks and controls are written will always be influenced by personal experiences and writing styles.

So how do you ensure consistency in the decentralised model, given the point of it is to leverage the power of the people?

At RiskWare, we understand that in order for risk software to be effective and help drive performance, it needs to successfully create a balance between empowering the people and ensuring information consistency.

With this front of mind, RiskWare has been designed with an in-built Control Library function. RiskWare’s Control Library allows organisations to maintain a centralised repository of controls that can be drawn on by any part of the business in defining what is used in the mitigation of risk.

Now while the concept of a library has been around for almost 5,000 years, by applying it to controls within risk software, there are several benefits to be had.

Benefits of a control library

First and foremost, it provides consistency of your organisation's control information. By having a central library of controls used within your organisation that all business areas can draw on, the wonderfully unique human ability to articulate the same thing in a million different ways no longer impacts your risk control information. A control being utilised across several parts of the organisation is articulated in the same way, every time, ensuring that everyone is on the same page when discussing.

The flow-on effect in having consistency is the additional power in your analysis that takes place. Suddenly you can see that a control is actually used in almost all parts of the organisation and the total risk exposure faced if there were a control failure.

Another key benefit is knowledge sharing and awareness of the control environment. As controls are typically aligned to a risk source/cause, business areas get visibility of controls that are in use across other parts of the organisation that they weren’t aware of or simply didn’t think of when analysing the risk. This helps spark discussion across business areas as people engage to learn how controls have been applied in another part of the business.

Maintaining our ethos of building beautifully simple software, RiskWare’s control library functionality allows organisations to easily and quickly create holistic visibility of the risk environment and the opportunities and deficiencies that lie within the associated control environment.

Imagine being able to see how controls interact with risk at an organisational level rather than an individual risk or business area level. Having the ability to see the risk dependencies on key controls commonly used across your organisation and how, if a control was to fail, what areas of the organisation could be affected and the risk exposures faced.

Furthermore, with this new found understanding, quality assurance efforts can now be better focussed on the control areas that can potentially create the greatest exposures rather than simply the part of the business the exposures would impact.

Start visualising your control environment better and talk to us about how control libraries can assist you in connecting the dots and making better business decisions.

If your organisation is looking to improve its ability to mitigate risks, software like RiskWare's Risk Management Module can provide the structure and support you need. Our team always has time for a conversation. Don't hesitate to get in touch!