Integrated Risk Management Software: A Complete Guide

Given the myriad of risks facing businesses today, business leaders are focusing on risk management like never before. As a formal business concept, risk management has long suffered from a lack of attention, as compared to its counterpart: compliance. The world has changed, though, and risk management is suffering a lack of respect no longer. To prove this, EY just reported in their 2022 Global CEO Survey that risk management tops the list of CEOs’ focus for three years going forward. 

With this newfound emphasis on risk management, companies are looking to improve the way they address the wide array of risks stemming from both within and outside their organizations. An integrated approach to risk management has become key to business success.

What is IRM Software and What Does it Stand For?

Integrated risk management (IRM) is an organization-wide approach to addressing risk categories that traverse the breath of an organization (strategic, digital, operational, financial, operating, security, compliance). Gartner defines IRM as a ”set of practices and processes supported by a risk-aware culture and enabling technologies that improves decision making and performance through an integrated view of how well an organization manages its unique set of risks.” 

An integrated risk management solution weaves risk management into the fabric of an organization and relies on good communication between all departments to be successful. IRM provides a top-down comprehensive view of an organization’s risk posture from strategy to implementation. Most importantly, IRM enables a “risk culture” that facilitates a more agile, forward-thinking process that beats the outdated compliance-driven approach to risk management.

Why Is Integrated Risk Management Important? 

Wheeler, who fathered the term “integrated risk management,” is one of its biggest proponents against its competitor, GRC. He led the research to define the new risk-based approach and the IRM technology market. He has described four ways IRM enables organizations to work towards those goals. John Wheeler, formerly a  Gartner analyst explains, “No matter the size, industry, or location, every business looks to achieve four IRM objectives”:

• better performance
• stronger resilience
• greater assurance
• cost-effective compliance

The IRM Vision

With risk workflows streamlined across the organization, an increased level of control automation, and most importantly- the right governance processes ensuring the integrity of the management, an organization will eventually reach what is considered the holy grail in risk management: intuitive and accurate IRM.

Integrated Risk Management Tool Attributes

Integrated risk management (IRM) is a set of operations, their sub-processes, and supporting digital tools, that improve business decision-making and corporate performance through the lens of risk management. Integrated Risk Management is not about ticking off compliance checkboxes; rather, it plans for a risk-aware culture throughout an entire organization and encourages working together with technology to achieve its goals.

IRM solutions have these 6 features in common:

Strategy

Creation and implementation of an integrated risk management framework which includes effective governance policies and risk ownership

Assessment

Identification, evaluation, and prioritization of risks

Response

Identification and implementation of tools and strategies to manage and mitigate risk

Communication and reporting

Development of a process to inform stakeholders of an enterprise’s risk response strategies

Monitoring

Identification and implementation of a monitoring operation that checks that governance objectives are being met and the effectiveness of risk mitigation strategies

Technology

Design and implementation of an IRM solution 

To understand the full scope of risk, organizations require a comprehensive view across all business units and risk and compliance functions, as well as key third-party vendors, key partners, and supply chain links. Developing this understanding requires risk and security leaders to address all six IRM attributes mentioned above.

The Benefits

The benefits of an integrated risk management framework are multifold. We’ve outlined a couple of them.

• Lower cost of compliance and audit preparation and cut out redundant compliance tasks
• Automated risk mitigation techniques
• Link business strategy and IT risk landscape.
• A cyber-aware business culture that maximizes positive risks
• Significantly reduced fraud, remediation, and legal fees
• Rapid decision-making

GRC vs. IRM

The traditional GRC (governance, risk, and compliance) concept focuses on an organization’s governance policies, compliance management, and risk strategy- each in equal standing. 

GRC functions are concrete, specific controls that enhance the risk posture. GRC’s risk management approach generally focuses on technical or operational downsides.  IRM widens the focus to include a more holistic picture of both tactics and strategy, which includes upside opportunities and strategic risks.

Integrated risk management addresses the full host of risks a company faces. Regulatory compliance risks and governance risks are just some of the many risk profiles that an IRM addresses. An integrated risk management strategy focuses on creating a proactive, risk-aware culture, using risk analysis to foster business strategy.

In short, IRMs put risk management on top of the security framework, while GRCs place risk management alongside governance and compliance strategies.

While IRM and GRC cover similar areas of cybersecurity, the rebranding of the term could significantly impact an organization’s cybersecurity strategy.

Impact of the IRM Concept

While still in its infant years, an integrated risk management approach shows signs of having a significant impact on how the risk industry works. One potential shift that may arise as a result of the creation of the IRM concept is the scope of responsibility for risk management. The IRM model puts risk management on everyone’s shoulders, not just the security team. This creates a basis for greater involvement and better communication across the organization. The ensuing collaboration fosters the ability of a company to achieve competitive advantage and cost reduction through an integrated approach to risk management.

What are Some Functions of IRM Software?

Centralized data collection

Integrated risk management applications collect data in a central location, which makes it easier to process and visualize data coming from all departments.

Risk analysis and assessment

Upon collecting the data, IRM software incorporates risk and dependencies into a risk assessment, producing actionable insights in real-time. Real-time data analysis enables faster and better decision-making. More information means better insights, and better insights mean more valuable reports.

Control

This function establishes different priorities and responsibilities. It also ensures that the company follows compliance rules.

Monitoring

All established risk management processes make it easy to track and monitor for quality.

Reporting

Companies have access to real-time, personalized reports that allow them to make decisions and take action whenever changes occur.

Guide to Implementing an IRM

An integrated risk management framework starts with these steps.

• Set Goals

Organizations should set measurable objectives that can be attributed to the context of risks and circumstances.

• Identify Risks

Risks and opportunities should be identified and integrated into a strategy or framework.

• Risk Analysis

Risks should be assessed individually and collectively. Ask the following questions:

• What material risks exist? How impactful and likely are they?
• What priority level does each risk have?
• How does a given risk affect the organization?
• How do the risks affect the organization collectively?
• How do the risks align with the organization’s risk appetite?
• Mitigation options

Risk mitigation or management strategy should include detailed plans of acceptable outcomes and accepted risks, alongside unacceptable outcomes with a full list of risk mitigation options for applicable risks.

The Future IRM/GRC

In a cloud-based world, where multiple integrations are built as standard, and solutions are accessible from anywhere, a new generation of IRM/GRC platforms is being developed. These new solutions leverage advanced technologies to provide a more comprehensive and inclusive solution. 

The differences between providers are becoming more clearcut. Some solutions are expanding to support areas like Environmental, Social and Corporate Governance Risk (ESG), while others specialize in Cybersecurity and Risk Management. The key concept that is driving this new generation of software solutions is removing compliance as a primary driver and to put the focus on the functional and operational benefits that can be achieved via the execution of the strategy. It is more important today to be secure than it is to show that you are secure.  

Achieving IRM with Centraleyes

Our platform is scalable and can be advanced as security needs evolve. It includes integrated risk assessment tools, strong reporting and analytics capabilities, and third-party vendor assessments. Most importantly, it allows for customization beyond industry-standard regulatory requirements of risk management.

At Centraleyes, we’ve built our solution on the presumption that a siloed approach to GRC is cumbersome and that an integrated risk management solution is the best way forward. Planning, assessing, monitoring, and reporting have never been easier with our centralized, integrated platform.

The Centraleyes solution cuts across organizational silos by standardizing risk and control taxonomies and enabling users to coordinate and unify risk management activities across all business functions. Organizations can align their security programs to recognized security frameworks and gain comprehensive visibility into both risk exposure and relationships. Delivering comprehensive visual metrics and actionable insights into risks and their impact on business performance, the solution strengthens resilience, enhances agility, and empowers risk-aware decision-making.