10 Best ERM Software in 2024: The Complete Guide

While traditional risk management operates within departmental boundaries, ERM adopts a more holistic approach. Enterprise Risk Management, or ERM, addresses the interconnected nature of risks across the entire organizational landscape.

Viewing risk through ERM’s strategic vantage point builds resilience and maturity.

In this blog, we’ll explore the fundamentals of ERM, examine real-life examples such as the collapse of Silicon Valley Bank (SVB), and highlight key points to consider when selecting an ERM software vendor in 2024.

Understanding Enterprise Risk Management (ERM)

ERM involves identifying the sources of risks and opportunities within an organization and implementing strategies to mitigate or capitalize on them. To illustrate this concept, let’s consider a hospital parking lot. While seemingly trivial, the planning of the parking lot can significantly impact the hospital’s operations and revenue. Imagine a nervous patient arriving on time at the hospital for a procedure. Their normal anxiety quickly turns to anger as they circle the parking lot, only to find every spot occupied. That added stress diminishes the chances of the patient returning or referring the hospital to others.

Optimizing parking facilities to maximize capacity and efficiency can enhance the patient experience and improve staff productivity, ultimately boosting the hospital’s reputation and financial performance. 

Open-source ERM software encourages organizations to take a holistic approach to risk management by identifying potential risks and opportunities across the gamut of the organization (down to parking spots) and implementing strategies to mitigate or capitalize on them.

Learning from The SVB Collapse

The collapse of Silicon Valley Bank (SVB) is a stark reminder of the importance of effective ERM practices. Heralded as a financial powerhouse, several key factors contributed to the collapse of Silicon Valley Bank (SVB) in March 2023. Firstly, the bank’s rapid expansion between 2019 and 2022 resulted in significant asset accumulation, primarily in long-term investments such as Treasury bonds. The decision to heavily allocate funds into long-term debts left SVB vulnerable to interest rate fluctuations.

As interest rates began to rise in response to inflationary pressures, the value of SVB’s bond portfolio declined. Additionally, many of SVB’s clients, predominantly from the technology sector, encountered financial difficulties. This prompted a wave of large withdrawals from their accounts. SVB’s attempts to accommodate these withdrawals by selling off investments further exacerbated its financial woes, as the sales were conducted at a loss.

The bank’s demise underscores the critical need for organizations to adopt robust ERM frameworks that enable proactive risk identification and mitigation.

Learning From Bed Bath and Beyond

Bed Bath & Beyond’s journey from industry giant to bankruptcy was the result of several critical missteps.  For starters, the company’s failure to adapt to the changing retail scene, particularly the growth of e-commerce, put it behind competitors migrating to online sales channels. Furthermore, Bed Bath & Beyond’s significant investment in brick-and-mortar inventory exacerbated its financial difficulties during the pandemic. Above that, poor strategic decisions, such as investing in high-risk private-label products and chasing expensive acquisitions like “Buy Buy Baby,” damaged ties with vendors and investors, undermining trust and confidence in the brand.

An enterprise risk management software solution that allowed for complete risk assessment and proactive mitigation techniques may have given Bed Bath & Beyond a strategic edge.

Key Factors to Consider When Evaluating an ERM Solution

When evaluating ERM solutions, organizations should look for several key features and capabilities to ensure they choose a solution that meets their needs and objectives. 

Holistic Risk Management Capabilities

Ensure that the ERM solution offers comprehensive risk management features that cover various risk types, including regulatory, operational, cyber, compliance, financial, and hazard risks. The solution should enable organizations to assess, identify, monitor, and mitigate risks across the entire enterprise landscape.

Integration with GRC and Other Systems

Look for an ERM solution that seamlessly integrates with Governance, Risk, and Compliance (GRC) platforms and other relevant systems within the organization. Integration capabilities facilitate a higher-level view of enterprise risks, streamline processes, and enhance data visibility and accessibility.

Scalability and Flexibility

Choose an ERM solution that is scalable and adaptable to accommodate your organization’s evolving needs and complexities. The solution should be able to grow with your business and support customization to align with specific risk management requirements and processes.

Proactive Risk Management Features

Prioritize ERM solutions that enable proactive risk management by leveraging advanced analytics, predictive modeling, and scenario planning capabilities. These features empower organizations to anticipate and address potential risks before they materialize, enhancing resilience and agility.

User-Friendly Interface and Accessibility

Opt for an ERM solution with an intuitive user interface and accessibility features that promote user adoption and engagement across the organization. Mobile compatibility and cloud-based deployment options can further enhance accessibility and usability.

Collaboration and Communication Tools

Look for collaboration and communication tools within the ERM solution that facilitate seamless interaction and information sharing among stakeholders from different departments and levels of the organization. Features like automated alerts, notifications, and task assignments can enhance collaboration and decision-making.

Comprehensive Reporting and Analytics

Ensure the ERM solution offers robust reporting and analytics capabilities that provide actionable insights into risk exposure, trends, and performance metrics. Customizable dashboards, real-time reporting, and drill-down functionality can empower decision-makers with timely, accurate information for risk management.

Regulatory Compliance

Verify that the ERM solution supports compliance management functionalities, including regulatory compliance monitoring, documentation, and reporting. The solution should help organizations ensure adherence to relevant laws, regulations, and industry standards, reducing compliance-related risks and liabilities.

Vendor Reputation and Support

Research the ERM solution provider’s reputation and track record, including customer reviews, references, and industry certifications. Choose a vendor with a proven history of delivering reliable, high-quality solutions and responsive customer support services to address any issues or concerns.

Best ERM Software Of 2024

1. Centraleyes (see it in action)

Centraleyes ERM-GRC platform revolutionizes the GRC-ERM space with in-depth risk management, compliance management, and data governance and protection. It includes advanced, automated technology for managing internal, third-party, and supply chain risks. Centraleyes is popular in the healthcare, financial, and insurance sectors.

Pros: No-code platform for comprehensive risk management coverage, advanced analytics, and advanced automation features. Extensive (and constantly growing)  library of updated regulations and compliance frameworks and standards worldwide, including the latest AI governance frameworks.

2. Archer

Archer’s IRM platform offers various enterprise, operational, IT, security, and third-party risk management capabilities. It includes ERM tools for regulatory compliance, ESG programs, crisis and business continuity planning, and document governance. Additionally, Archer provides a marketplace for prebuilt applications and data integrations.

Pros: ​​Provides a robust and scalable governance, risk, and compliance (GRC) platform that offers extensive customization options, advanced reporting capabilities, and integration with other enterprise systems, 

3. AuditBoard

AuditBoard’s platform focuses on streamlining audit and compliance processes with modules for SOX compliance, audit management, risk assessments, and third-party risk management. It also offers features for risk assessment, automated evidence collection, and collaboration between different teams.

Pros: Stronddg emphasis on collaboration and workflow automation, real-time risk monitoring and reporting, and user-friendly interface.

4. Diligent

Diligent’s GRC platform covers enterprise, IT, and third-party risk management, audits, internal controls, and regulatory compliance. Its features include advanced analytics, workflow automation, cyber-risk dashboards, and due diligence modules.

Pros: Advanced analytics and automation capabilities, extensive library of integrations with enterprise applications, user-friendly interface.

5. LogicGate

LogicGate’s Risk Cloud platform offers modules for ERM, cyber-risk management, third-party risk management, regulatory compliance, and operational resiliency. It includes customizable workflows, reporting and analytics tools, and AI-driven risk quantification.

Pros: LogicGate offers a comprehensive and customizable risk management no-code solution that empowers organizations to streamline their risk management processes and proactively address potential threats with automation.

6. LogicManager

LogicManager offers a cloud-based platform for ERM, IT and cybersecurity risk assessments, third-party risk management, regulatory compliance, business continuity management, and internal auditing. It includes AI, machine learning, and risk analysis and reporting automation tools.

Pros: An all-inclusive pricing model, extensive advisory and training services, AI-driven risk analysis, and comprehensive coverage of risk management functions.

7. MetricStream

MetricStream offers an AI-powered GRC platform that supports risk management, compliance, audit, and ESG initiatives. It includes enterprise risk management tools for managing enterprise, operational, IT, and third-party risks, business continuity, regulatory changes, and internal audits.

Pros: AI-driven risk management capabilities, a data model for centralized risk management, and an extensive library of prebuilt dashboards and reports.

8. OneTrust

OneTrust’s Trust Intelligence Platform provides a suite of tools for managing ethics and compliance, privacy, GRC, and ESG initiatives. Split into four product modules, it covers a broad spectrum of risk management functions. The platform emphasizes third-party risk management and Ai governance, offering due diligence tools for screening and monitoring vendors and AI security risks.

Pros: Comprehensive platform covering various risk management functions with a strong focus on third-party risk management with automated assessments.

9. Riskonnect

Riskonnect’s integrated risk management software facilitates interconnected risk management across organizations and third parties. Its cloud-based platform includes tools for managing insurance, ESG, healthcare, GRC, and business continuity risks. Riskonnect offers visualization tools, analytics software, and APIs for custom integrations with external applications.

Pros: Integrated platform covering a wide range of risk management domains featuring advanced risk analytics. Provides consulting and managed services for compliance.

10. RiskOptics

RiskOptics specializes in IT and cybersecurity risk management, offering software designed for chief information security officers and information security teams. Its ROAR Platform provides tools for assessing third-party risk exposure, real-time risk scoring, compliance monitoring, and more.

Pros: Focuses on IT and cybersecurity risk management with specialized tools with built-in integrations with leading cloud and SaaS services. Offers a supportive community for self-service support and information sharing.

How to Choose the Right Enterprise Risk Management Solution?

1. Define Your Requirements

Start by clearly defining your organization’s specific needs, objectives, and priorities regarding risk management. Consider your organization’s size and complexity, industry regulations, risk appetite, and existing risk management processes.

2. Assess Your Current State

Evaluate your organization’s current risk management practices, processes, and systems to identify areas of strength and areas for improvement. Consider how well your existing systems and tools meet your needs and where gaps or inefficiencies exist.

3. Identify Key Features and Functionality

Based on your organization’s requirements and objectives, list the essential features and functionality you require in an ERM solution. This may include risk assessment and scoring capabilities, incident management, compliance management, reporting and analytics, workflow automation, and integration with other systems.

4. Consider Scalability and Flexibility

Choose an ERM solution that can scale and adapt to your organization’s changing needs and growth trajectory. Ensure the solution is flexible enough to accommodate new risk factors, regulatory requirements, and business processes.

5. Evaluate User Experience

Look for an ERM solution that offers an intuitive and user-friendly interface to facilitate adoption and usage across your organization. Consider factors such as ease of navigation, customization options, and accessibility from different devices and locations.

6. Ensure Data Security and Compliance

Prioritize data security and compliance considerations when selecting an ERM solution. Verify that the solution adheres to industry-standard security protocols and regulations, such as GDPR, HIPAA, or SOC 2 compliance, to protect sensitive information and mitigate cybersecurity risks.

7. Assess Integration Capabilities

Determine how well the ERM solution integrates with your existing systems and tools, such as open-source ERP, CRM, or GRC platforms. Seamless integration can streamline data exchange, improve workflow efficiency, and enhance overall risk management effectiveness.

Why Some ERM Programs Fall Short and What to Look Out For

When adopting an Enterprise Risk Management (ERM) solution, understanding why some programs fail can be crucial for choosing an effective one. While ERM frameworks offer significant potential for identifying and managing risks, not all implementations achieve their goals. Here are some reasons ERM programs might fall short, along with advice on what to look out for:

1. Over-Reliance on Rigid Frameworks

Many ERM programs rely heavily on standardized frameworks like COSO or ISO 31000, which provide valuable guidelines but may not fit every organization’s unique context. Research from 2021 highlights that rigid adherence to these frameworks can lead to a “checklist mentality,” where compliance becomes the goal rather than true risk management integration (Kaplan & Mikes, 2021). 

2. Managing Risks in Silos

A significant challenge in many ERM programs is treating risks as isolated incidents rather than interconnected elements of a broader ecosystem. A 2022 study by Deloitte found that organizations often struggle with siloed risk management, leading to missed connections between different risk areas. For an ERM program to be effective, it must offer a comprehensive view of risks and how they impact various parts of the organization.

3. Neglecting Growth Opportunities

Many ERM programs focus on risk avoidance rather than exploring how risks can present opportunities. According to Harvard Business Review, a forward-thinking ERM approach should balance risk mitigation with the potential for growth and innovation. 

4. Misuse of Models

The use of simplistic models like heat maps in ERM can sometimes lead to misguided decision-making. As noted by George Box in his famous quote, “All models are wrong, but some are useful,” relying too heavily on such models without understanding their limitations can be problematic. Effective ERM solutions should use models as tools for discussion rather than definitive answers, acknowledging their limitations and ensuring decisions are based on a broader understanding of risks and their potential impacts.