What is Risk Management software?

Risk management software is a set of tools that help companies prevent or manage critical risks that all businesses face, including finance, legal, and regulatory compliance and strategic and operational risks.

Risk management software can help organize and track your risks, so you can prioritize tasks needed to manage and/or overcome the various risks you face. But what type of risk management software do you need? We're here to help you figure that out.

Here's what we'll cover:

Common Features of Risk Management Solutions
Benefits of Adopting Risk Management Software
Risk Management Tools Buying Tips for New Buyers

Common Features of Risk Management Solutions

Even the simplest risk management software tools include numerous components.

Core Features of Risk Management Software

Risk identification	Identifies and records risks your business faces. Defines the risks for a repository or allows you to choose from a pre-established risk dictionary.
Risk assessments	Assigns simple ratings to risks or enables you to develop detailed classifications based on multiple factors defined by individual business units.
Monitoring and testing	Defines key risk indicators (KRIs) and records the effectiveness of risk management processes.
Reporting and dashboards	Monitors risks and solutions with easy-to-understand visual reporting and dashboards.
Regulatory compliance	Ensures your risk management processes meet all necessary regulatory compliance by defining and tracking processes and required compliances.
Issue management	Manages the execution of key risk-based projects. Ensures critical risk management issues are identified and accounted for.
Document management	Allows you to collaborate and share documents and reports in real time. Houses a knowledge base for new and curious employees.

Risk management solutions support businesses throughout the risk life cycle, from identification to assessment and on to monitoring and potentially eradication. The first line of defense is risk identification and assessment. It's here that you'll identify the risks facing your business. This could be as simple as inputting regulations and compliances, or it might take some digging and thinking to determine what your pressing risks are—which leads into the next step: assessment.

Once you have identified risks, it's time to assess their potential impact and prioritize them accordingly. Assessment can mean assigning your risks a simple rating within a given scale of severity (e.g., 1 - 5, with 1 being a low risk and 5 being a high risk). More detailed assessments can provide a risk score that takes many variables into account. Regardless of the complexity of the assessment, completing this step enables you to use your risk management tools to monitor risks and test your ability to manage and work through them.

Issue management is a key feature used in day-to-day operations surrounding risk testing and other related projects. Key capabilities within issue management include task assignment, workflow monitoring and automatic notifications and reminders for deadlines and communications.

Benefits of Using Risk Management Software

A properly utilized risk management system will enable you to operate more efficiently. The awareness that comes with proactively and systematically monitoring critical risks will help you overcome any potential setbacks or downtime in your business.

Specific benefits of adopting risk management tools include:

Creating a proactive, risk-aware culture. Systematically identifying and addressing risks will lead to a risk-aware business culture that operates more strategically.
Staying organized throughout risk life cycle. Inputing newly identified risks into the system allows you to monitor them constantly throughout their life cycle.
Assigning accurate risk scores for easy prioritization. You can assess and assign scores to each identified risk based on numerous variables for easier prioritization.
Improving workflows for monitoring and working through risks. Leverage issue management and task tracking to easily assign responsibility for each stage of risk monitoring.
Leveraging risk reporting, analytics and metrics. Monitor the status of each risk and its progression toward escalation or eradication and see the real business impact that risk management has on your organization.

Risk Management Tool Buying Tips for New Buyers

Risk management systems have many benefits to offer your business, but that doesn't mean all risk tools are right for you. Choosing the risk software that's going to drive your business to greater success is no easy feat. There are a ton of risk management software vendors itching to get your business, so move carefully when navigating the vendor landscape.

The following recommendations will help you stay the course and choose the best risk management solution for your business. They come from a cross-industry software buyer survey we conducted to determine effective tactics for choosing the best software for your unique business. The most recommended tactics from the survey are:

Do your due diligence researching risk management offerings. If you're new to risk management or risk management software tools, read up on what's available in the market. Talk to peers in the space who are using risk software to get their take on the system they currently use.
Identify where, why and how your current risk management practices fail. When you do eventually start reaching out to vendors and setting up demos, you'll need to identify key areas of improvement that software can help with. Don't just look for the system with the most or "coolest-looking" features—look for the one that's best equipped to help your business' top pain points.
Read all the risk management software reviews you can get your hands on. As simple as it sounds, reading user reviews from your peers in the risk management space can provide a wealth of info into how individual systems work. Whereas vendors tend to try and overwhelm you with marketing jargon, reviews cut straight through to give you a clear picture of the software's pros and cons.

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