Accelerate Your Risk Management Software Implementation by Learning From Buyers With Experience

By: Shephalii Kapoor on May 23, 2024
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Limited visibility into risk exposure, compliance status, and emerging risks can hinder proactive decision-making, increase vulnerability to threats, and compromise the effectiveness of risk management processes. As a risk and compliance officer, you need a dedicated risk management tool to improve risk visibility, implement mitigation strategies, and enable proactive risk management. 

However, to make the right software purchase, knowing the correct set of features, average software price, and common challenges faced while purchasing risk management software is crucial.

Each year, Software Advice's advisors speak with thousands of software buyers evaluating new risk management software for their businesses. We've mined those conversations to provide insights that will help small businesses understand the budget requirements, feature needs, and pain points of current users to finalize the best tool for their needs.

Key insights

  • Software buyers from the risk management industry prioritize reporting and dashboard functionality during purchase, while those using the software currently consider risk assessment as the top priority in risk management software.

  • Most businesses either rely on manual methods and third-party software for their day-to-day risk management practices or do not have any system in place at all.

  • Switching to risk management software is driven by the need for efficiency, functional sufficiency, and new business opportunities.

  • The top five industries investing in risk management software allocate between $129-$192 per month, with an overall buyer average of $179 per month.

Prospective buyers and current users prioritize different features

To gain insights into user preferences, we analyzed thousands of risk management software reviews available on Software Advice to identify the features that the users of the software consider most critical for their daily work. Interestingly, our findings revealed a discrepancy between the priorities of risk management software buyers and users.

  • Around 38% of current software users consider risk assessment as the most essential feature in risk management software as compared to buyers who are majorly looking for reporting and dashboard functionality in a risk management tool.

  • These findings indicate that businesses already using risk management software find immense value in risk assessment functionality. The feature enables businesses to identify, analyze, and prioritize risks that might affect their projects or operations. Users can leverage the feature to document various types of risks, such as financial, operational, and strategic risks, and assess their likelihood of occurrence. Additionally, they can use predefined criteria to assign impact ratings to each risk. 

  • Reporting and dashboards, on the other hand, provide a consolidated view of business risks, allowing stakeholders to monitor and analyze risk-related information. This may include risk severity, risk trends, mitigation process, and compliance status. Users can configure dashboards to display relevant metrics, charts, and graphs based on their specific information requirements. Additionally, they can generate reports that provide detailed insights into the business risk profile.

Pro tip

Shortlist a risk management solution that facilitates the development and tracking of risk mitigation plans. The software should allow users to document mitigation strategies, assign specific tasks to individuals, set dues dates, and monitor the progress of risk mitigation strategies.

Current pain points for risk management software buyers

When our advisors asked buyers what methods they were currently using to handle their day-to-day risk management operations, here's what they found:

  • Thirty-eight percent of buyers use manual methods, such as pen and paper tracking and spreadsheets to automate their day-to-day operation workflows. 

  • While 29% of buyers do not have a system in place, nearly 13% rely on third-party tools for their risk management practices.

These discussions shed light on businesses' real-life challenges with their existing methods. These included efficiency (43%), limited functionality (36%), and new business opportunities (9%).

  • Inefficiency: Conventional methods of risk management, such as spreadsheets and paper-based files lack automation capabilities, requiring manual data entry, calculation, and analysis. Moreover, these are typically stored in decentralized locations, such as individual computers and cabinets, making it difficult for users to access and share risk-related information. Likewise, third-party tools may offer generic capabilities that do not completely align with the specific risk management requirements. Moreover, these tools offer limited customization options, making it difficult for users to tailor the software to their specific workflows and risk management methodologies, leading to inefficiencies. 

  • Limited feature options: Manual methods of risk management and third-party tools often lack the necessary features and capabilities required to effectively manage risk management processes. Businesses often need to develop customized risk taxonomies tailored to their specific operations and objectives. While third-party tools may fulfill some basic criteria, they may not provide sufficient features, such as risk assessment tools, customizable taxonomies, and real-time risk monitoring to enhance the effectiveness of risk management practices. Moreover, both these methods offer limited reporting and analytics capabilities, making it difficult for users to gain risk-related insights.

  • New business opportunities: As risk management businesses grow and evolve, they may need a solution that offers them the latest technology and advanced features to differentiate themselves from others and explore new business opportunities in untapped markets. As compared to both manual methods and third-party software, a dedicated risk management tool offers greater customization options, enhanced collaboration, and improved efficiency that can help businesses enhance their service offerings and attract new clients.

Reasons for switching to a dedicated risk management system

Compared to the existing methods used by professionals, a dedicated risk management software solution offers the following benefits: 

  • Efficiency and automation: Risk management software automates several repetitive tasks, such as data entry, calculation of risk scores, and generation of reports to save time and reduce the risks associated with manual processes. As compared to third-party tools and manual methods for risk management, the software provides predefined workflows and templates that guide users through each step—from risk identification, to mitigation and monitoring, ensuring consistency and efficiency in risk management activities.

  • Scalability: A risk management platform is designed to scale with the business needs and accommodate growing volumes of data, users, and complexities of risks. As compared to manual methods and third-party tools that may struggle to keep up with increasing requirements of risk management, a dedicated tool offers flexibility to adapt to changing requirements, workflows, and risk management methodologies without significant disruption. 

  • Better functionality: As compared to manual methods and third-party tools, risk management software offers high levels of customization capabilities, allowing users to configure workflows, risk taxonomies, roles, alerts, and templates, ensuring a tailored fit to their unique needs. These tools also offer advanced analysis and reporting, including interactive dashboards, risk heat maps, and trend analysis to offer deeper insights into risk patterns and trends, facilitating more informed decision-making. 

  • Comprehensive features: In contrast to third-party solutions that often include a broader range of functionalities and may lack in-depth options for effective risk management, a dedicated risk management solution is designed to address the unique needs and challenges of risk management processes. It offers a comprehensive list of features that are specifically built for risk identification, assessment, mitigation, and monitoring.

Pro tip

Consider a risk management platform with robust reporting and analytical capabilities to help users analyze risks, trends, and performance indicators. The software should provide pre-built reports, customizable dashboards, and visualizations to help users identify emerging risks and monitor risk mitigation efforts.

Average budget for risk management software buyers across industries

The budget for purchasing risk management software varies from industry to industry based on factors such as the deployment model, number of users, customization level, and the required functionality.

However, the average budget across industries for purchasing risk management software was approximately $179 per user, per month. 

The chart below highlights the average buyer budget per month for the top five industries interested in risk management software.

Average budget for risk management software

Use cases for risk management software

Based on our advisors’ interactions, these are the top five industries using a risk management tool for different use cases: 

  • Manufacturing businesses need risk management solutions to identify, assess, and mitigate risks associated with their operations, supply chain, and product lifecycle. They may look for specific features, such as compliance management, incident and crisis management, integration with manufacturing systems, and risk reporting in a risk management tool. These features can help businesses mitigate risks effectively to meet their business objectives.

  • Government institutes manage a wide range of programs, services, and activities spanning multiple departments and jurisdictions. They may require a risk management solution to identify and mitigate risks associated with these diverse operations. Other than the basic risk identification and assessment features, these institutes may also look for regulatory compliance management, enterprise risk management, and access controls to manage risks effectively. 

  • Healthcare and social service organizations need risk management tools to identify and assess risks related to patient safety, regulatory compliance, and financial management. Therefore, they may prioritize data security, emergency planning, integration with electronic health records systems, incident reporting, and compliance management features in risk management software. 

  • Banking and financial organizations operate in a highly regulated environment with stringent regulatory requirements. They need a risk management platform to identify credit and market risks, operational risks, and compliance-related risks. Some of the essential risk management features they look for may include sensitivity analysis, scenario analysis, audit, risk analytics, and integration with financial systems. 

  • Construction and contracting businesses need a risk management tool to monitor risks associated with their projects, operations, and workforce. Their feature requirements may include project risk assessment, incident management, document management, and risk forecasting.

Looking for more resources?

Click here to check out our risk management software directory, FrontRunners Report, and Buyers Guide, and compare hundreds of products.


Methodology

Software buyers analysis methodology

Findings are based on data from conversations that Software Advice’s advisor team has daily with software buyers seeking guidance on purchase decisions. The data used to create this report is based on interactions with small-to-midsize businesses seeking risk management tools. For this report, we analyzed approximately 90+ phone interactions from May 1, 2023, to May 3, 2024.

The findings of this report represent buyers who contacted Software Advice and may not be indicative of the market as a whole. Data points are rounded to the nearest whole number.