In Part 3 of our Business Case for ERM series, we will detail the 3 three crucial advantages of our Enterprise Risk Management solution that your CRO will want to know about.
Our ERM solution will...
1.) Reduce the amount of time spent on manual data capture and reporting processes
One of the most common reasons that firms look for a software solution to support their enterprise risk management framework is because they have found themselves in a situation where the risk and compliance team has been reduced to ‘spreadsheet jockeys’; spending huge amounts of time manually manipulating data instead of focusing on generating insights and challenging strategic and operational decisions within the business.
In the business case, document the total number of man days per month wasted by your risk and compliance team manually manipulating data in spreadsheets. Once you have the number multiple by it by the current average salary within your risk and compliance team, then multiple by 12 to generate an annual ‘waste’ figure. Many risk and compliance teams have reported they can spend as much as 50% of their time doing wasteful manual data processing activities. At 10 days per month for 3 – 4 people, and an average salary of £60k the value of the waste is approximately £242k to £322k per year.
2.) Reduce operational losses
When implementing a software solution for enterprise or operational risk management, one of the areas where quick wins and robust ROIs can be delivered is around operational losses. In our experience, the implementation of a software solution leads to an initial increase in the number of risk events being reported but within 3 – 6 months the trend is reversed and reductions quickly emerge as events are picked up earlier in their lifecycle and corrective actions start to take effect. As a general rule, we would expect to deliver a 25% reduction in operational losses within an 18 – 24 month period and in some cases we have delivered more than a 50% reduction.
3.) Focus on developing a robust framework, process & culture to enable proactive stakeholder engagement
Related to the first point about reducing the burden of manual data capture and reporting processes, one of the main benefits CROs seek from a software solution is its ability to enable their team to focus on the ‘right things’ to move the risk agenda forward. Often this revolves around focusing on developing and enhancing the risk framework, working across the business to embed risk management into the firm’s strategic and operational decision-making and into the firm’s culture. Part of this agenda is ensuring the risk team have the time to correctly engage with all stakeholders who have a role in the risk management process. Using the RACI model as a guide, this may include front-line staff, executive and other senior management, the board and potentially external stakeholders such as major customers and suppliers.
Look out for our final post in this series which will describe the 3 main points to outline when pitching to your CIO.
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