Benefits of Risk Management

Risk management has historically been viewed by many organisations as something of a "chore". However, the high profile failures noted above led companies, government agencies and regulatory bodies to reassess the importance of risk management. A wave of regulation has raised the "bare minimum" requirements for risk management through the guidelines published in Turnbull, Sarbanes-Oxley and Basel II to name but a few.
Furthermore, companies have begun to see that by managing risk more effectively they can gain a competitive advantage through such things as:
- Improved product quality
- Increased ability to deliver on time
- Improved Asset Efficiency due to fewer breakdowns
- Reduced costs by limiting legal action or preventing breakages
- Improved reliability leading to an enhanced reputation
Intensely risk aware companies could even see a direct impact on their share price performance. If they are able to deliver the same performance results with a reduced risk profile, the capital markets should reward them effectively.
Using Istria’s leading edge software, IRIS also provides additional benefits, including:
- Alignment of project and programme activities to strategic objectives, preventing time and effort being wasted in non-core areas
- Enhanced visibility of the risks and issues impacting the organisation
- Full prioritisation of risks and mitigating actions, enabling management to focus on the most critical areas
- An understanding of the total risk exposure of the organisation and its relation to the overall risk tolerance
- The ability to quantify the benefits of risk mitigating actions enabling robust decision support for cost / benefit analyses
- A risk history that provides an audit trail of actions taken and risk status.
Through investing a little time and effort in risk management up front, organisations can derive enormous benefits by avoiding significant problems downstream. Being proactive and treating the cause (the risk) is always preferable to being reactive and treating the symptoms (the impact).



