Risk Management
Software

Risk management involves identifying strategic and business objectives to determine which risks you should take and / or avoid in order to achieve these objectives and deciding the best strategy to optimise and / or mitigate these risks. When considering an organisation’s risks, managers need to understand the organisation’s strengths, weaknesses, and management system to identify vulnerabilities and minimise the associated costs. Failure to understand and mitigate risks can result in significant losses.

The process involves establishing context, identifying stakeholder objectives, risk evaluation and management, and planning responses. The response plan focuses on developing solutions to reduce or eliminate high-ranking risks.

Implementing risk reduction methods, preventative programs, and contingency plans reduces the chances of a negative outcome.

Even moderate risks can affect a business’s processes and performance. Companies can save time, money, and physical resources by identifying high-risk areas and developing risk-management strategies. By identifying these, companies can minimise their losses and stay competitive. Even in times of crisis, businesses that use risk management processes are less likely to shut down or suffer severe financial losses. As a result, they can improve their operational efficiency and increase their customers’ satisfaction. Furthermore, they are more likely to keep their employees happy.

According to ISO 31000, Risk management refers to a “coordinated set of activities and methods that is used to direct an organization and to control the many risks that can affect its ability to achieve objectives.”

COSO’s 2017 update titled “Enterprise Risk Management—Integrating with Strategy and Performance” highlights the importance of considering risk in both the strategy-setting process and driving performance.

Legislation such as PFMA and the MFMA together with corporate governance codes such as King IV expect an institution to implement a risk management plan. The King IV code on corporate governance (copyright Institute of Directors Southern Africa) applies to all entities, regardless of their nature, size or form of incorporation. The Code is implemented on an “apply and explain” basis.

Principle 4 of the King IV code states that the governing body should appreciate that the organisation’s core purpose, its risk and opportunities, strategy, business model, performance and sustainable development are all inseparable elements of the value creation process.

Principle 11 of the King IV code states that the governing body should govern risk in a way that supports the organisation in setting and achieving its strategic objectives.

Effective risk management not only paints a clear picture of the risks facing the business, as well as the strategies to be followed in the event of risks materialising but facilitates the identification of opportunities ensuring that the corporate strategy remains relevant and up to date.

Comprehensive and robust risk management software helps you to minimise the impact of unforeseen events and improve the efficiency of your business. A user-friendly interface and intuitive design, facilitates the capturing of up to date information and aids productivity with the automation of consolidated reporting and data analysis.
The BarnOwl risk management module facilitates a structured and systematic approach to risk management by effectively prioritising and managing risk and opportunity across the organisation in pursuit of business objectives and strategy. BarnOwl risk management software:

• Facilitates and embeds integrated risk management in your organisation linking and monitoring the knock-on effect of related risks, contributing factors (causes), key risk indicators, incidents, controls, etc.,

• Provides a unified view of risk and gives management and staff at every level the ability to identify, assess, manage, monitor, and report on risks,

• Enables a simplified and streamlined approach to risk management with consistent risk taxonomy and centralised risk library,

• Supports the automation of risk and control self-assessment voting, surveys and checklists,

• Drives ownership for risk mitigation by enabling the ‘live’ updating and monitoring of action plans,

• Provides an early-warning system enabling management to determine more quickly and accurately where to focus their attention and resources to improve processes and take proactive and preventative action timeously. BarnOwl risk management software provides continuous risk monitoring together with Arbutus data analytics. Arbutus is a powerful data analytics solution developed explicitly for auditors, business analysts, and fraud investigators,

• Delivers risk intelligence reporting, providing valuable business insight and assisting with business decision-making,

• Limits Director / Accounting officer exposure through a formalised approach to risk management.

Pros

Allows businesses to:

• Identify and classify strategic, business and operational risks

• Facilitate a common risk taxonomy across divisions and various assurance providers

• Keep all risk related data in a centralised database protected by role-based permissions

• Improve accuracy and relevancy

• Integrate risk across silos

• Improve visibility of key risks in an ever changing risk landscape by utilising a comprehensive risk register

• Automate risk reporting using tools. One version of the truth and save 1000s of man hours by not having to try and consolidate 100s of spreadsheets

• Embed corporate governance culture. Action plans drive ownership and accountability

• Improve communication to all stakeholders (shareholders, employees, customers, suppliers, community etc.)

• IImprove business decision making with up to date insightful dashboards and innovative solutions

Cons

Some of the barriers to using risk software include:

• Users like working in silos with their own data in spreadsheets

• Excel is easy to use and provides flexibility for users to capture data in almost any format they wish. No need to conform to a standard methodology, data validation, drop down boxes etc.

• Users, generally don’t like being monitored via audit trails, action plans etc.

• Embedding a common risk taxonomy across divisions and assurance providers requires change management and compromise

• Reports / dashboards generated by the software do not always meet business requirements, however, business often does not know what they want either

• Learning new software requires time and effort

• Cost of software and ongoing support