Risk Management Software

Introduction

Risk management software assists Canadian businesses by reducing their exposure to operational and enterprise-level risks, primarily through the effective use and management of data. In order to achieve this, enterprise risk management (ERM) solutions of this kind will typically allow users to measure levels of risk within existing processes, activities, or projects, prioritize the risks that are most important or most critical to business success, document regulations, and create reports on the current status of risks, as well as on specific incidents that occur within the organization.

With the use of an effective risk management framework, Canadian companies and their employees should find it easier to adopt appropriate actions to mitigate risk and take preventative action to stop those risks from becoming real issues. Additionally, deploying risk management tools can allow businesses and other organizations to create a risk-aware culture, which can be advanced through policies, planning, business processes, decision-making, and training activities.

While there are a variety of different risk management systems on the market, all with their own precise range of features and functions, there are areas of consistency too. Some of the defining components of applications of this kind include built-in tools that can assist Canadian organizations with risk identification, risk assessment, risk mitigation, and taking preventative action. Moreover, most tools will also offer options for carrying out audits and creating relevant reports.

Although the functions of risk management software are quite specific—in that it is intended to assist users with managing risk, achieving compliance, and avoiding unnecessary problems—it can function alongside a variety of other tools, and there is some significant crossover with other software solutions. Examples of related programs include governance, risk and compliance (GRC) software, audit software, and financial risk management software.

Within the category of risk management software, there are numerous options to choose from, and these will all offer their own unique range of features and have their own plus points and drawbacks. Nevertheless, there are also some core features, which can be viewed as category-defining, and which can be found in the vast majority of applications of this type. When using a risk management platform, these core features will generally allow a business to:

• Identify risks, classify them, and assign a score, rating, or indication of how serious the threat is
• Assess internal processes and ensure compliance with rules, regulations, and legislation
• Define key risk indicators (KRIs) and set alerts for when specific breaches or failures transpire
• Create reports on compliance, the status of risks, and incidents that occur internally

What is risk management software?

Risk management software is the name given to software solutions that are designed to assist Canadian businesses by minimizing exposure to enterprise and operational risks. Through effective use of high-quality risk management tools of this kind, businesses can become more aware of risks, more compliant with rules and regulations, and better prepared to respond to internal incidents. On top of this, processes and procedures can be optimized, audits can be carried out more easily and efficiently, and significant issues can be avoided or kept to an absolute minimum.

Some of the tasks that can be carried out through the use of risk management software include the identification of specific risks that exist within an organization, assessment of the level of threat that each risk poses, and the creation of processes, actions, and strategies that can either help to mitigate these risks or prevent hypothetical risks from manifesting.

Risk management software is sometimes called risk assessment software or a risk management system. Assessment of risks is at the heart of these programs, and one of the single biggest reasons businesses adopt these solutions is to create a more risk-aware culture. The ultimate objective is to avoid unnecessary and potentially costly problems.

What are the benefits of risk management software?

The benefits of risk management software are primarily based around its ability to help businesses identify risks, define those risks, measure the threat that those risks pose, and take actions to either avoid negative consequences or reduce the impact. Software of this kind can help Canadian organizations to change their processes, training programmes, and overall culture. However, it is important to be as specific as possible about the benefits of using business risk management software and the best reasons for doing so. Some of the biggest advantages of the software allow a business to:

• Identify risks and address them swiftly: arguably, the single biggest advantage associated with the use of risk management programs is linked to the ability it provides businesses and their leaders to identify risks, define them, and ensure they are addressed as swiftly as possible. Within many applications, risks can be pinpointed, explained, given an overall score based on the level of threat provided, and categorized so that the nature of the risk is understood. The relationship between different threats can also be explored. Ultimately, the key benefit of this is the ability to respond to risks in a more efficient and tailored way.
• Prioritize the risks that pose the greatest threat: it is important to acknowledge that not all risks pose the same level of threat and that some issues will cause more harm than others. This, in turn, means that some risks need to be given a higher level of priority. Not only does this allow actions to be taken to prevent problems from manifesting, but it also means that if problems do arise, resources can be appropriately allocated so that the most critical threats are dealt with first. Risk management software provides users with a crucial ability to score risks and threats so that they are not all treated equally and so that all of the key stakeholders know what the priorities are.
• Create processes for risk response: once organizations identify and understand the various risks they face, they must also develop processes for responding to each risk. However, this does not only mean defining the actions that will be taken. It also means establishing which stakeholders will be involved in any response and why. Internally, employees need to know which risks they are responsible for managing and what is expected of them.
• Develop a culture of risk awareness: as previously stated, one of the broadest ways that risk management software can be used to benefit organizations and their employees is by allowing for the development of a culture that emphasizes an awareness of risks. Many of the biggest challenges businesses face manifest from problems that they overlook or fail to identify. When using risk management software, employees can think more carefully about what may happen, what the consequences could be, and what might be done to avoid those consequences. This then reduces unforeseen threats and allows businesses to become better prepared generally.
• Establish an overall risk register: risk management software allows for individual risks to be identified and scored, and this also contributes to another significant advantage, which is sometimes overlooked. When an organization has a clear sense of the number of risks or threats they face, and scores have been allocated to each of those risks, it can start to build a more comprehensive picture of the overall level of risk posed to the organization. Establishing a risk register can then make it easier to see the big picture and devise a wider risk strategy.
• Promote greater levels of compliance: finally, the use of risk management software can help to promote greater levels of compliance within organizations, and this can be achieved by establishing clear rules and outlining precisely why compliance is so important. Companies that understand the risks that exist and take appropriate action to avoid or mitigate those risks are also much more likely to be operating in compliance with existing legislation and industry regulations. However, when new rules emerge, action needs to be taken to adjust processes accordingly, and risk management software can help companies to achieve swift transformations.

What are the features of risk management software?

The main features of risk management software tend to focus on identifying and managing risks, either at an enterprise level or with regard to specific processes. Of course, the exact features that one risk management platform offers will not necessarily be the same as another. That being said, certain features—described as core features—are seen in almost all packages, while common features can be found in the majority of applications of this type. The main features to look out for are:

• Risk assessment: carry out an assessment of the different risks that exist within a business and assign a score or rating to each of these risks. The purpose of the risk assessment feature contained within risk management software is to allow organizations to understand the different threats they face and understand how serious those threats are and how much attention or focus should be given to them. The allocation of a score or risk rating also allows different risks to be directly compared to one another and categorized more easily. Some software solutions are more specialized, meaning they focus on a specific area of risk management, such as financial risk assessment, IT risk assessment, legal risk assessment, or operational risk assessment. These solutions may include some added features and functions that are relevant to that particular risk management discipline.
• Risk reporting: create risk reports, which include information about current and emerging risks as well as details on how the organization is currently managing those risks. Ultimately, a risk report should be able to inform business leaders and other key stakeholders of which policies and controls are working well, which are failing, which show promise, and which need to be altered. Another significant part of risk reporting involves identifying key risk indicators (KRIs) and using these KRIs to measure how risky a particular activity is. Therefore, using risk management software to create reports of this kind can predict difficult or damaging events before they occur.
• Auditing and compliance management: conduct audits, keep compliance information up-to-date, and take action to resolve areas where the business is not operating in full compliance with rules, regulations, or legislation. The ability to carry out audits and manage compliance is absolutely critical, especially at times when new legislation emerges. A good example of this can be seen with the General Data Protection Regulation (GDPR), which brought about new requirements for businesses to handle the personal data of EU citizens with care and transparency to keep that data safe and secure. Risk management software can help avoid data breaches because it can be used to make sure any compliance issues are flagged and resolved in a timely fashion. As a result, businesses can avoid fines, lawsuits, and numerous other penalties that may exist.
• Dashboard: oversee risk management performance using a live dashboard, which provides real-time information. The best risk analysis software solutions will make use of the KRIs outlined by an organization and use these to present valuable information on an interactive display. This will then allow employees who are involved in areas like risk management and compliance to see where action needs to be taken and where new risks are emerging.
• Alerts/notifications: set up alerts and notifications in order to be informed of any changes that require immediate attention. Generally, the alerts or notifications system within risk management software can be set up to work in combination with both chosen key risk indicators and any compliance information input into the system. This allows notification of when a breach occurs, when a risk becomes critical, or when new legislation or compliance requirements actually come into effect. This all helps to ensure that action is taken at the best possible time—by employees in the right department—in order to minimize disruption or damage.

Capterra's risk management software directory provides a quick and easy way to explore the precise features that each solution offers, allowing for useful comparisons to be made. It is also possible to sort the available options—based on the features they provide—so that only applications that meet basic requirements are seen.

What should be considered when purchasing risk management software?

When purchasing risk management software, there are many different things that will need to be considered carefully in order to find the best possible solution. However, it is important to think of this as the quest to find the best solution for company-specific needs because some solutions on the market may be aimed at different industries or contain excellent features that are not actually of any real use to the organization. A good way to explore the various key considerations is to take the time to ask the following questions:

• What is the cost of risk management software? When exploring any new software solution, careful thought must be given to how much it costs and how much is available to spend. On a basic level, try to find the best solution that is realistically affordable, but think about the issue of cost holistically too. The cost of purchase and installation or setup is only one aspect here. Also, think about how much software will cost to continuously run, how much will be needed to invest in staff training, and whether there will be costs linked to accessing technical support or upgrading software as new versions are released. If choosing to adopt a Software as a Service (SaaS) option, consider the ongoing subscription fees and what costs may be linked to ending that subscription.
• How can risk management software be deployed? There are two main options for software deployment in the modern age. The first is on-premises deployment, where software is purchased, set up and managed on-site, with full ownership and control. The second is the cloud-based approach, often delivered on a Software as a Service (SaaS) basis, where a third-party service provider will manage the software, its updates, and data storage while providing remote access. Both models have their pros and cons, with the former offering a greater sense of control, while the latter provides more predictable costs and greater flexibility. The main things to consider here are not only these advantages and disadvantages themselves, but how they apply to the business.
• What are your specific expectations? Next, be clear on what is actually required from the risk management software and which features matter the most. Having a clear sense of purpose makes it a lot easier to carry out a worthwhile enterprise risk management software comparison. Not all features included in software options may be relevant, and even if these features are implemented superbly, they should not form a significant part of a decision-making process. Think about what is actually needed and use that information as the basis for comparing and contrasting the different options in the Capterra software directory.
• Are there mobile risk management options? A growing number of Canadian businesses operate with employees either working remotely or working while in the field, and these workers may still require access to risk management software and its features. With this in mind, if this applies to the organization, give consideration to the mobile accessibility on offer. In some cases, this may come in the form of a dedicated mobile app, while in others, it may be delivered through access to cloud-based software via a mobile web browser.
• Do you require an industry-specific solution? Finally, if the business operates in an industry like finance or information technology, it may be worth exploring some of the risk management software solutions that are specifically aimed towards the industry. These solutions will be designed with an awareness of the most common industry-specific risks in mind, helping to reduce the overall workload for staff.

What are the most relevant risk management software trends?

The most relevant risk management software trends should also be factored into any purchasing decision because a solution needs to serve the business well in the future and not just in the present. This means choosing an application that can be used in combination with emerging and existing software and enterprise risk management technology, which can be integrated into a modern workplace's modern processes and procedures. With this in mind, some of the most important trends are outlined below:

• Improvements to artificial intelligence (AI): Improvements to the quality and accuracy of artificial intelligence and machine learning have had an influence on a large number of software categories, and risk management software is no different. Within these applications, AI can anticipate risks before they manifest, carry out certain automated actions to limit the threat, learn from previous solutions to problems, and self-manage areas related to compliance and risk defense. All of this means that risk management can become more efficient, and actions can be carried out in the ideal moment, even if no employee is available to perform the action themselves. With this in mind, it is worth thinking about the AI capabilities of the chosen software solution.
• Increased popularity of cloud technology: As a whole, businesses are becoming more aware of the potential advantages of utilizing cloud technology, especially in terms of keeping important data secure, recoverable, and continually backed up. Beyond this, cloud-based software solutions can allow businesses to downsize premises because less on-site storage is required, and fewer on-site IT professionals may be needed. The accessibility of cloud-based options is another major benefit, with employees having the ability to access software remotely, from anywhere in the world, using any compatible internet-enabled device. As Canadian businesses increasingly shift more of their IT infrastructure to the cloud, it is worth thinking about whether cloud-based options may provide a more future-proof solution to risk management software needs.
• The changing nature of modern work: Advancements in internet speeds, communications technology, and cloud computing have all contributed to wider changes to the very nature of modern work and these changes were accelerated by COVID-19. Indeed, 55 percent of Canadian remote workers stated that they enjoyed having the ability to work from home. With greater expectations for remote or hybrid working models, Canadian businesses need to respond, and this means investing in solutions that are purpose-built with remote and hybrid work in mind. For risk management software, if remote employees are going to require access, it makes sense to focus on options that offer cloud-based deployment or which can be configured to allow for off-site access.
• The internet of things (IoT) within business: The internet of things (IoT) refers to the inclusion of internet capabilities within everyday devices, turning them into 'smart' devices that are able to communicate with one another. Increasingly, the concept of IoT technology is entering the workplace, and it is worth contemplating if some of these smart devices could assist with the automated detection of risks. If so, seek out software solutions that are compatible with those smart devices. Even if the business does not currently make use of such devices, the trend is shifting towards IoT devices becoming more affordable and more widely utilized within business settings. When prioritizing risk management software that can serve a business well into the future, this trend may need to be factored into any decisions and software purchases made.

Sources

The features highlighted were identified based on their relevance and the percentage of products in Capterra's directory that offer them. The following sources were used for this document:

1. GDPR turns one – is your SME compliant? - Capterra Blog (Date accessed: Tuesday, October 5, 2021)

2. Glossary Definition - Integrated Risk Management - Capterra Canada (Date accessed: Monday, October 24, 2022)

3. Workplace wellness: Almost 3 in 4 Canadian remote workers report burnout - Capterra Blog (Date accessed: Monday, December 20, 2021)

4. Top 5 Tech Trends for Small Businesses - Capterra Blog (Date accessed: Wednesday, October 6, 2021)