What is risk management software?

Risk management software helps companies to manage risks for their business processes and their business models to identify, evaluate and derive the necessary measures.

In this article you will learn about the most important functions of risk management software, the areas of application and the advantages. And you can find out what role such tools play, for example, in ISO 9001:2015 certification.

Risk Management Software Definition

definition-risk-management-softwareRisk management software is an enterprise software, with which companies, organizations and associations can enter, discuss and evaluate risks. Based on this information, measures to reduce the risks can be developed. The implementation takes place through a transparent risk management process.

Managing risks in the company is one of the core contents of the ISO 9001:2015 standard. ISO 31000 is another standard dealing with risk management. Companies wishing to obtain certification under these two standards must demonstrate that they have an established risk management system. The use of risk management software offers advantages here.

Advantages of the Risk Management Software

Risk management is one of the most important entrepreneurial tasks. It is essential for the maintenance and smooth running of business operations. Risks can arise, for example,

  • from defaulting payments,
  • product malfunctions,
  • legal frameworks and regulations
  • or sudden events such as natural disasters.

Risk management software helps companies identify potential risks from different business areas, assess the potential threat to business operations, and develop measures to address the risks. Risk management software, which is based on the principle of collaboration, allows employees to enter risks at any location in the world and in any department.

The use of risk management software has advantages:

  • It allows companies to evaluate risks according to a previously defined standard,

  • to enable the management of risks with a clear transparent process

  • to develop measures to reduce the risks, and

  • to monitor the effective implementation of these measures.

Risk management software also provides companies with reporting on identified business risks and their potential impact. Reporting can also be used to monitor the implementation of measures and thus the achievement of objectives.

Risk Management Software Functions

Which functions are important for risk management software? Roughly speaking, the functions can be divided into three areas: collecting, assessing and prioritizing risks, developing measures and monitoring their implementation. You will get to know these three functional areas here:

Entering, evaluating and prioritizing risks

Risk management software allows risks to be entered and evaluated according to criteria such as “probability of occurrence” and “impact”. The management of risks can be simplified with a transparent process.

  • For example, risks can pass through various stages on the way from input to the development of measures, such as discussion, initial assessment, appraisal, etc.

  • In these processes, responsibilities are defined and specified in-depth questions are formulated.

The module Risk Management Software of the Innolytics® Software Suite makes exactly this possible. Companies can enter risks, evaluate them according to criteria that they can define themselves, and use a prioritization tool to identify the greatest risks in the various areas.

Development of measures

Risk management software also supports companies

  • in developing measures to reduce or eliminate risks,

  • assigning responsibilities and

  • defining tasks and milestones for implementation.

Here, too, a clear process with different processing steps ensures that the implementation of the measures can be carried out transparently and efficiently. The Risk Management Software module of the Innolytics® Software Suite also supports this process.

Developing a risk management controlling system

Risk management software provides answers to questions like these:

  • How many risks have been newly identified in a certain period of time?

  • To what extent is risk management accepted and lived in the everyday life of a company?

  • defining tasks and milestones for implementation.

The statistical functions of risk management software ensure that companies always have an overview of all risk management activities.

Fields of application / Use cases for risk management software

As different as the risks within companies and organizations, so different are the areas of application of risk management software. Risks can arise, for example,

  • in production,

  • in a supply chain,

  • in compliance issues,

  • in personnel acquisition,

  • from new trends and

  • from competitor activities.

Accordingly, risk management software can be used in all areas. Since risks are often only the flipside of opportunities, there are close overlaps between risk management software, idea management software, continuous improvement software and innovation management software.

Risk Management Software in the Supply Chain

Companies – especially product manufacturers – are dependent on a smoothly functioning supply chain. Risks can arise, for example,

  • in the sudden rise in the price of raw materials,

  • by the loss of one or more suppliers, or

  • by natural disasters and thus a sudden shortage of certain raw materials

Risk management software in the supply chain helps to identify and evaluate such risks at an early stage and to take countermeasures.

For example, it can make sense to purchase supplies exclusively from abroad purely on the basis of price advantages. In terms of risk management, strategic second suppliers can make sense, even though they may produce more expensively. The establishment of software-supported risk management helps to make such decisions.

Risk management software for the identification of market risks

Trends such as digitalization, a sudden change in customer behavior or a marketing offensive by competitors can result in a loss of market share for companies. They therefore represent risks. Risk management software supports companies

  • in identifying such risks at an early stage,

  • assessing the impact of these market risks

  • and developing measures for the product or marketing strategy.

The consideration of market risks can lead to the development or modification of products or to the development of new business models The development of digital business models can also be carried out under the aspect of risk avoidance.

Risk Management Software in the field of HR

There are also numerous risks for companies in the recruitment of personnel. For example,

  • if attractive competitors settle in the region,

  • the number of trainees in an area that is important for the company declines or

  • the company has difficult access to skilled workers due to the poor image of the industry,

risk management software helps to identify these risks at an early stage, evaluate them and take countermeasures. Since the causes of risks in personnel recruitment are often located in other areas, a software-supported management system helps to set up cross-divisional risk management.

The Risk Management Software Module of Innolytics®

The Innolytics® software suite comprises a variety of modules that support companies in mastering strategically important challenges. The risk management software module allows companies to identify and assess risks and to take countermeasures.

  • Risk management can be mapped out into a structured process.

  • Persons responsible for the analysis and for the implementation of measures can be named.

  • All risks can be linked to initiatives for innovation or to measures, for example in the continuous improvement process.

The risk management software module allows companies to enter and assess risks across divisions. By linking with other strategic processes, companies can holistically integrate risk management into their corporate structures.