An Introduction To Enterprise Risk Management

Risk management is a fundamental principle in any organization, since risk is a reality that needs to be dealt with; irrespective of the business model. There is no straightforward formula for determining how much risk should be allowed by any given organization; for it to get some value or create business opportunities that they can exploit. This poses a serious challenge for most businesses, since all business decisions present either; an opportunity or risk to the company’s capital base and revenue. A company must therefore, have in place a stringent risk management solution or policy; in order to reduce the impact of risk on its revenue.

Risk is often associated with negative outcomes within an organization; hence it is avoided at all costs. This however, is not the right approach, since the process of identifying opportunities that can be exploited by an organization also involves taking risk. Therefore, when risk is managed correctly, it can create opportunities; but if poorly managed, it leads to negative outcomes.

Enterprise Risk Management is the process of optimizing and controlling risk in an organization. This includes any method and framework that is utilized to either; seize opportunities that will benefit the business; or plan, organize, and control all activities that may limit the impact of risk on the company’s financial status.

Enterprise Risk Management is the latest form of risk management solution which takes a holistic view of all uncertain factors that may affect a company’s tangible and intangible assets. ERM, unlike any traditional risk management solution, has a different approach as far as objective, focus, emphasis, scope and application are concerned. The purpose of ERM is to prepare an organization to handle risk; by integrating strategy, knowledge, processes, people, and technology.

Banking software is a good example of applications that put Enterprise Risk Management into practice. The software comes with modules that are meant to improve the performance of the business and at the same time optimize the cost of risk management. These modules include the content management system and wholesale lending component.

The content management system in banking software is important in risk management, since it is used for organizing and managing client information, employee data, collateral based securities and other confidential documents. The wholesale lending module, on the other hand, is a critical tool for credit risk management. This module has the ability to define products and work-flow data, and comes with powerful reporting capabilities. The wholesale lending module has tools for financial and ratio analysis; giving banking software risk analysis capabilities. Integration between this module and the content management system allows the software to manage portfolio, credit scores and rating, and customers.

In implementing Enterprise Risk Management, it is imperative that an organization first understands the full scale of risk that is to be mitigated. First, objectives should be set by taking into consideration the organization’s capabilities. Then, an implementation plan should be developed and responsibilities for designing, implementing and monitoring be allocated. The risk management process should then be incorporated into the company’s policies.

ERM is all about taking strategic risk; that an organization is able to comply with and control, in order to spur growth and improve performance. An organization therefore needs to learn how to properly manage risk in order to create value and opportunities that can benefit them.

Risk Management Software In Financial Sector To Tackle The Recession

Turbulent economy, shaky world order, the recent depression and not so commendable market events have highlighted the need for risk management solution in the financial sector. Management executives and board members should have an in depth understanding about the risks involved in this field and how it is managed without causing much harm to this zone. Various financial services provide solutions in order to improve the company’s investment process. To meet the various challenges put forward by the global recession, banks are fixated in improving the operational productivity, managing risks, compliance across various enterprises and competition in the market.

Financial misadventure is not a new phenomenon. But the extensive damage it causes is huge. As a result of this the credibility of the banking sector is lost and more and more people become less convincing about banking and insurance policies. People have no idea about how banks are going to control and regulate their money. Are there any collateral management solutions that ensure safety while availing loans from banks?

People have the right to know about such matters. As a result of this officials are becoming increasingly aware about various risk management software and the solutions that they provide in order to know in advance the risks and help bank officials to make smarter decisions that maximize value and reduce costs.

Financial institutions need to meet forthcoming regulatory requirements for risk management and capital. Bank managers need reliable risk management solution in order to direct the capital. The size of the potential loses should be estimated, so that the bank can stay within its limits. Banks need mechanisms to monitor positions and should create enticements for effective risk taking. Risk management software provides just that. They satisfy the needs by intensifying key risks and obtaining operational risk measures. Such risk management solutions will also help in monitoring the resulting risk positions.

When it comes to finance and banking the term risk may refer to reductions in firm value. Risk management solution therefore is aimed at improving the firm value and helps to manage exposure to risks especially credit risk and market risk. Market risk is the change in the net asset value. Various factors like interest rates, exchange rates and equity rates and commodity prices might influence market risk. Credit risk also involves change in net asset value but occur due to changes in the ability of the counter party. Such risk factors could cause huge economic damage to the banks.

Risk management software provides the precise banking solutions. They refurbish the bank executive’s knowledge about the types of risks and the efficient management of the risk. Effective banking solutions are provided by numerous financial services around the globe. Bloomberg, Sungard, Limit Trac, and Deal Hub are some of the Risk management solutions that provide the right kind of collateral management and banking solutions.

Measuring the amount of risk is time consuming. Therefore it is important that the banks know about the impending risks beforehand. Effective financial services help bank officials active reporting of the risk like credit risk, market risk and collateral management. For long time banks depended on traditional methods like scorings, ratings and credit committees for tackling risks. New age brings new risks. Therefore banks need advanced financial services to tackle them. To avoid these risks, calculated measures should be taken before the system rots.

Management Consulting Firm – Enterprise Risk Management

Management Consulting Firms
Management consulting firm is an organization that helps businesses or companies to improve their performance by analyzing their existing problems and developing plans for the improvement. The very first management consulting firm was established in year 1909 by Arthur. D. Little, a MIT professor. Since then a number of management consultancies have been formed especially after period of Second World War when various tools and approaches defining the field of strategic management were discovered thus setting the base for many consulting firms to thereby follow.

Management consulting firm offers services for enterprise risk management, business continuity and disaster recovery management, service management, call centre management, help desk management, customer support services, information security services and business continuity and risk management course, certified help desk manager course, business continuity and service level agreements course by Kingswell International, UK.

The management consultants are often approached by the organizations for external advice regarding the business problems or to get access to the specialized expertise of the firm to solve those problems. These consultancies can provide services like enterprise risk management, business continuity and disaster recovery management, service management, call centre management, help desk management, customer support services and information security services for better management of the businesses. Most of these firms also offer coaching and training courses like business continuity and risk management course, certified help desk manager course, course on IT contracts and IT service level agreements, business continuity and service level agreements courses etc to train individuals for business management.
Enterprise Risk Management
No business is done without risks. The risks in any business when managed efficiently can drive in growth and opportunity. Enterprise risk management is the process of identifying, analyzing, responding, and monitoring the risks and opportunities within the internal and external environment of the enterprise. It is an approach of planning, organizing and controlling the activities of an organization in order to minimize the effects of risk on its capital and earnings. It includes the methods and processes used by organizations to manage risks and to grab opportunities related to the achievement of their objectives. There may be situations where businesses have to encounter problems like distressed financial markets; mergers, acquisitions and restructurings; disruptive technology change; geopolitical instabilities. With an efficient risk management strategy such uncertainties or problems can be tackled efficiently so that business can run smoothly without any disruption. An effective ERM strategy can improve the business performance, create competitive advantage and optimize the risk management cost. There are many management consulting firms who offer ERM services to the clients for efficient risk management. They help organizations to align their strategies, processes, resources, technology and knowledge so that the company is well equipped to handle risk. They guide businesses for strategic risk-taking and effective organization building.