Everything you need to know about risk management

What is risk management? What risk management software is available? What are the risk analysis tools that are really useful? And where can I find a risk management framework? Read about all this and more, including how to properly apply cyber risk management in your company, in the article below.

What is risk management and why should you apply it?

Risk management is a process by which organizations attempt to find, assess, and address potential problems and hazards. It is like an indispensable shield for organizations of all sizes, in all sectors. It's all about anticipating what could go wrong and making sure you're ready for it – no matter what. But why is it so important?

There are several clear reasons for this:

• First of all, it is about maintaining the stability of your company. By identifying and anticipating potential problems, you can ensure that you are not completely surprised by unexpected events, such as a sudden market downturn or a natural disaster. This means you can respond in a way that doesn't endanger your business, but rather helps it keep going.
• The next important aspect is protecting your investments. Companies invest a lot of time, money and effort into their projects and assets. By applying risk management, you can ensure that these investments are protected against potential losses. It also helps you take advantage of opportunities that arise so you can create value for your business.
• Risk management also helps you make better decisions. By thinking carefully about the possible risks and how to address them, you can make informed choices based on facts and analysis. This gives you an edge and helps you develop strategies that really work.
• It can also help make your company more efficient and save costs. By proactively addressing risks, you can prevent problems from arising that cost your company money. It can also help streamline and improve your processes, ultimately leading to lower costs and higher profits.
• Last but not least, risk management helps you gain the trust of stakeholders. Whether they are investors, customers, or regulators – people need trust to do business with you. By being open and transparent about the risks your company faces and how you deal with them, you can build, expand and maintain this trust.

The basic principles of risk management

The risk management process usually consists of the following steps:

• Discover risks: During the first step you try to discover where things can go wrong within the company. Consider financial problems such as market changes, operational problems such as system failures, or even employee errors. You try to identify everything that could potentially be a risk.
• Analyze risks: Once you know what could go wrong, you look at what the chances are of it happening, and how bad it would be. You do this by using both numbers and common sense. You estimate how often a risk could occur and what the consequences would be.
• Assess risks: Next you rank the risks. Which ones are most likely and will have the greatest impact? This will help you determine what you need to pay attention to first and what might be less urgent.
• Manage risks: This is where you come up with strategies to tackle the risks. You can avoid, reduce, transfer risks (for example to insurance), or accept them if the costs of measures are higher than the potential damage.
• Monitor and adjust: Risk management never stops. You must continuously monitor whether the measures are working and whether new risks emerge. This means regularly checking your risk profile and making adjustments where necessary.
• Communicate and collaborate: An important part is talking to everyone involved. This way you ensure that everyone understands what the risks are and, in the field of process management, what their role is in the process. Good communication ensures that everyone is on the same page.

It's clear that risk management is very important for the success of an organization. By actively and systematically tackling risks, you can avoid problems within the organization and seize new opportunities.

The importance of cyber risk management in risk management

Cyber risk management is becoming an increasingly important part of risk mapping. Nowadays it is no longer possible to correctly implement risk management without taking digital risks and cyberthreats into account.

Cyber risk management is about dealing with the dangers associated with the use of technology and the internet. It covers everything you need to do to keep your digital information and systems safe. This is important because we are increasingly dependent on technology and because cyber attacks are being carried out more often and smarter.

Cyber risks include malware, malicious software that infects your computer and damages or steals data. Ransomware is a specific form of malware that holds your files hostage and demands a ransom to release them. Phishing is another common threat, where attackers attempt to obtain sensitive information by posing as a trusted source via email or other communication channels.

There are also internal threats, such as employees accidentally making mistakes or deliberately causing damage. This could involve clicking on a suspicious link, downloading infected files, or sharing sensitive information with unauthorized parties.

To map all these (and more) cyber risks, start by identifying all hardware and software used within the organization, such as computers, servers, networks and software applications. You then analyze which vulnerabilities they have. This can be done through vulnerability scans and pen tests (or penetration tests), where you try to discover how an attacker could gain access to crucial information.

In addition, it is important to look at the threats, both from outside and within. External threats can come from hackers, cybercriminals, or even competing companies. Internal threats can arise from negligence, ignorance, or malice on the part of employees.

With the right form of risk management and risk management software, cyber risks are automatically included. After all, it poses a major threat to every company.

Tackling risk management with risk management software

You can choose to tackle risk management with specially developed software. Risk management software is there to make the entire process of managing risks easier and faster. With this software you can collect, analyze and track all information about possible risks in one place. This gives you a clear overview of what can go wrong, and you can better respond to such scenarios and which risk analysis tools can be used in which situations.

A major advantage of risk management software is that you have everything in one place. This makes it super easy to see trends and patterns and understand what the biggest risks are. You can also create useful reports and dashboards that keep your management team and other stakeholders up-to-date on the status of the risks and the measures taken (or yet to be taken).

If something goes wrong, the software also helps you manage incidents. You can keep track of exactly what happened, who is responsible for follow-up, and how the solution is progressing. This ensures that you can respond quickly and limit the damage.

In addition, the software helps you comply with all rules and regulations. It sends automatic reminders and notifications, so you never miss a deadline and always comply with legislation. This reduces stress and prevents fines and other problems.

Risk management is a very essential part of quality management and process management. WoodWing Scienta, WoodWing's solution for organizations that want to work structurally with quality, process and knowledge management, has made risk management one of the spearheads of the software.

Interested?
If you would like to know more about the risk management options that WoodWing has to offer, please contact the specialists at WoodWing Scienta.