If you are an innovative firm, then managing risk is an essential part of doing business. There are no standard enterprise risk management (ERM) plans that fit every technology firm. Each innovative firm is different and an Enterprise Risk Management program has to be designed to fit the specific needs on an individual business.
But there are five basic steps that a technology firm can take when starting their Enterprise Risk Management program. The ERM program should reflect the company’s culture and particular structure.
1. Personnel – The first step to developing an effective ERM plan is to involve key company personal. A team has to be assembled that will be responsible for overseeing the creation of the ERM plan as well as its implementation. Who are the key people in your organization that will be involved in establishing your enterprise risk management program?
2. Preparation – ERM preparation requires a realistic approach. By now you should have taken the basic steps to identify the critical risks that your organization faces. The next step will be to better determine your level of acceptable risk retention. Implementing an ERM program can help you broaden your scope of methods for managing those risks.
3. Documentation – The research involved with creating a company’s ERM plan needs to be thoroughly documented. This may involve interviewing key managers as well as conducting risk surveys and more. Sharing such documents among key personal can provide valuable ideas and provide resolutions for better managing those risks. The ERM plan should now be put together and reviewed. But keep in mind, an ERM program is always a working document. As your organization grows and changes, your ERM program will need to adjust.
4. Implementation – Once the ERM plan is created and passes the approval process, it is time to put it into place. All people involved with the ERM plan must be know their responsibilities. The plan needs to have event identification, risk impact response as well as defined actions that will be taken. An ERM plan without any implementation is not helpful in moving your organization to a higher level.
5. Monitor – Once an ERM plan has been created and put in place, it’s important it also be supervised. This can involve periodic audits, reviews, assessments and more. Effective supervision might also involve third parties to make certain the ERM plan is current and meeting all designated goals. Regular ERM monitoring will need to be done for the long term.
It’s important for companies in the technology and life sciences industries to manage all of their organizational risks. To do this properly may require getting assistance from industry experts. The members of TechAssure Association have the knowledge and experience necessary to provide expert advice for effective risk management. Contact us today to learn more.