Importance of Risk Management Frameworks
Risk management frameworks therefore, has become an integral part of managing business. Instances of risks such as that of Home-Depot and Wal Mart despite having active risk management programs makes it evident that even successful brands can lose revenues and brand image when faced by any enterprise risk. In today’s competitive era, companies face various kinds of risks which might not be under the direct control of the management, such as changes in the exchange rate, political landscape or changes in interest rates. There can also be risks associated with noncompliance in financial reporting and labor laws.
Risk management is a proactive process than a reactive one. Once incurred, risks cannot be completely eliminated, but it can be:
- Minimized to a great extent by having systematic internal controls
- Averted by not engaging in risk business development plans
- Retained, to either avert the expense of trying to mitigate it
However, in order to make daily operations and business acquisitions free of risks for companies, service providers of information risk management have introduced advanced risk management frameworks that offer the following services:
Strategy and Design
This evaluates the consumer risk management strategy, process, policy and compliance needs. In addition to that, it also analyzes aspects such as risk identification, rating mechanism and other operational processes involved with it i.e. who sanctions risk decisions, who performs risk management and the like. Based on this assessment the service providers set up a holistic risk management framework that addresses all these concerns.
Deployment and sustenance
This enables the customers to implement a risk management framework by establishing risk management templates, personalizing the rating and ranking the mechanism to address various assets.
Hence, systematic and high-end risk management framework sets up a comprehensive risk assessment and treatment structure that supports all vendors, processes, information technology assets and offers data protection solutions as well. Service providers today have undertaken a holistic and modular approach that helps end users to design, transform and sustain risk management.
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