Operational Risk Management Software: Mitigating Business Risks Efficiently
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Operational Risk Management (ORM) is important for businesses, involving the identification, assessment, and reduction of risks in daily activities to ensure smooth operations. In today's rapidly evolving business landscape, the use of software for effective operational risk management has become increasingly necessary. Let's explore operational risk management, the importance of software solutions, and how businesses can use them to reduce physical operating risks.
Best Operational Risk Management Software table of contents
What Is Operational Risk?
Before unpacking the risk management process, let’s first understand what “operational risk” truly means. Simply put, operational risk is the risk of losses resulting from disruptions to business processes and internal operations.
Considered a subset of enterprise risk management, operational risk can result from:
Employee conduct and employee error
Breach of private data resulting from cyber attacks
Technology risks tied to automation, robotics, and artificial intelligence
Business processes and controls
Development and introduction of new products
External / Physical events (such as natural disasters or, yes, a pandemic)
Employees’ participation in fraudulent activities
Workplace safety risks
In this blog, we'll delve into physical operational risk management. Let's get started.
How-workers-washing-windows-office-building | Operational Risk Management Software
A Brief History of Operational Risk Management
Operational risk has always been part of doing business, even way back in ancient times, however, it grew into a bigger deal during the Industrial Revolution with the introduction of factories and large machines. People started noticing the dangers and hazards of these new innovations causing accidents and problems with workers, so in the 20th century, governments introduced new rules and regulations to keep the workplace safe and protect consumers.
As technology improved, so did our ability to manage risks. Nowadays, businesses consider operational risk management crucial, so we have evolved the software to help them identify and deal with operational risks more effectively.
How Operational Risk Management Works?
Zendelity - How Operational Risk Management Works?
When dealing with operational risk, the organization has to consider every aspect of its objectives. Since operational risk can easily and quickly escalate in the workplace, the goal is to reduce and control every risk to an acceptable quality level.
Effective operational risk management aims to reduce risks by identifying, assessing, measuring, and mitigating them. It also involves monitoring and reporting on risks, and determining who is responsible for managing each operational risk.
These stages guide Four principles:
Accept risk when benefits outweigh the cost:
This means it's okay to take risks if the rewards are good enough. But only if the benefits outweigh the possible problems.
Accept no unnecessary risk:
Avoid doing things that could cause problems for no good reason. It's about being careful and not taking chances when you don't have to.
Anticipate and manage risk by planning:
Think about what might go wrong and make plans to deal with it. Being ready for problems helps you handle them better when they happen.
Make risk decisions at the right level:
Make sure the right people are in charge of making decisions about risks. This makes sure that those who know what they're doing are in control.
Challenges and Barriers in Operational Risk Management
Challenges and Barriers in Operational Risk Management
While the benefits of operational risk management software are evident, organizations may encounter challenges during the implementation process. Common challenges include:
Integration with Existing Systems
Integrating operational risk management software with legacy systems and disparate data sources can pose technical challenges. However, leveraging APIs, middleware, and data connectors can facilitate seamless integration and data exchange.
Employee Training and Adoption
Ensuring user adoption and proficiency is critical for maximizing the value of operational risk management software. Providing comprehensive training programs, user-friendly interfaces, the use of preserved operational intelligence, and ongoing support can help mitigate resistance to change and promote adoption.
Data Quality and Consistency
Accurate risk assessment and decision-making require maintaining data quality and consistency. Organizations may face challenges due to data silos, incomplete, inaccurate, or unverified data, and disparate data formats.
To solve these problems, you can create rules for managing data, make data collection processes consistent, and leverage tools to ensure the risk management data is audit-proof, accurate, and trustworthy.
Alignment with Business Objectives
To make the most of risk management software, it's important to align its use with your business goals. This involves setting measurable targets, conducting regular performance reviews, and making sure risk management activities contribute to achieving business outcomes. By doing this, organizations can ensure that the software helps them become more successful and resilient.
Change Management and Organizational Culture
Implementing operational risk management software often requires changes to existing processes, workflows, and organizational culture. Resistance to change, lack of buy-in from stakeholders, and cultural barriers can hinder implementation efforts, so effective change management should involve communication, stakeholder engagement, and leadership support to foster improvement and risk awareness.
Operational Risk Management: Best Practices
Even though ORM is a compelling idea, there are still several barriers that make it challenging to manage operational risk: competing priorities, a lack of awareness, difficulty allocating resources, and an inability to perceive value in the operational risk framework.
The lack of standardized risk assessment processes and measurement methodologies, as well as complex ORM programs, can also hinder organizations’ ability to manage operational risk.
However, by adopting these five best practices, enterprises can navigate operational risk more effectively, ensuring business continuity and fostering a culture of risk awareness:
Implementing Risk Accountability: Assigning accountability for risk management across all levels of the organization fosters an integrated approach to risk management. By embedding risk awareness into day-to-day activities, enterprises cultivate a culture that values risk mitigation and resilience.
Championing ORM From the Top: Senior management's commitment to the ORM program is paramount for its success. When leaders actively champion risk management initiatives, it sends a clear message throughout the organization, emphasizing the importance of prioritizing risk mitigation efforts.
Conducting Timely Risk Assessments: Regular risk assessments are essential for maintaining an accurate understanding of the organization's risk profile. By conducting assessments regularly, ORM leaders can promptly identify emerging risks and adapt mitigation strategies accordingly, ensuring agility in response to changing circumstances.
Quantifying and Prioritizing Risks: Quantifying operational risks in terms of your probability, severity, and mitigation costs allows you to prioritize your mitigation efforts effectively. By concentrating your resources on addressing high-priority risks, you can optimize your risk management strategies and allocate resources more efficiently.
These best practices serve as a solid foundation for any business seeking to enhance its operational risk management capabilities. Different industries have their specific concerns. For example, financial companies want to lower their operational risk, while manufacturing plants want to keep their business running smoothly. The principles mentioned above can help all industries manage their operational risk successfully.
Advantages of Operational Risk Management (ORM) Software
Centralized Data Management: The software's centralized platform consolidates all operational risk data, facilitating easier access, analysis, and reporting. This feature ensures that stakeholders have comprehensive visibility into risks, leading to informed decision-making and enhanced risk management practices.
Real-Time Monitoring: With real-time monitoring capabilities, the software enables organizations to continuously track operational activities and identify potential risks as they emerge. This feature allows for proactive risk mitigation, reducing the likelihood of incidents and minimizing their impact on operations.
Improved Compliance Tracking: The software provides tools for documenting compliance activities, conducting inspections, and generating reports for audits. By streamlining compliance tracking processes, organizations can ensure adherence to regulatory requirements and industry standards, reducing the risk of penalties and fines.
Efficient Incident Management: Incident management features streamline the reporting, notification, and response coordination processes. This capability enables organizations to respond quickly and effectively to incidents and emergencies, minimizing downtime and ensuring the safety of personnel and assets.
Risk Assessment and Mitigation Tools: The software offers robust risk assessment and mitigation tools, allowing organizations to identify and prioritize risks based on severity and likelihood. This feature empowers organizations to implement targeted risk mitigation strategies, reducing exposure to potential hazards and preventing incidents from occurring.
Advanced Analytics and Reporting: Advanced analytics and reporting capabilities provide organizations with actionable insights into operational data and trends. By analyzing this data, organizations can identify areas for improvement, optimize risk management strategies, and drive operational excellence.
Scalability and Customization: The software is scalable and customizable to accommodate the unique needs and requirements of organizations. This flexibility allows organizations to tailor the software to their specific workflows, risk profiles, and compliance mandates, ensuring optimal effectiveness and alignment with organizational objectives.
Enhanced Collaboration and Communication: Collaboration and communication features facilitate seamless information sharing, task assignment, and decision-making among stakeholders. This capability fosters transparency, accountability, and teamwork, driving continuous improvement and alignment across the organization.
Real-Life Case Studies of Physical Operational Risk Management Across Various Institutions Beyond Banking
Operational risk management is vital for all types of institutions, not just banks and financial ones. Any organization can face risks related to its day-to-day operations. Whether it's a hospital, a manufacturing plant, or a tech company, you need to identify, assess, and mitigate these risks to ensure smooth operations and protect your reputation.
For instance, operational risks in a hospital could include medical errors, equipment failures, or any other physical compliance. To manage these risks, you should implement safety protocols, train our staff regularly, and invest in advanced technology for patient care and facility safety.
Similarly, a manufacturing plant may face risks such as supply chain disruptions, machinery breakdowns, or environmental hazards. To mitigate these risks, they should diversify their suppliers, conduct regular maintenance checks on equipment, and adhere to strict safety and environmental regulations.
In banks, it's really important to keep things safe physically. This means making sure that offices and safes are secure and that only the right people can get in. To do this, you should follow special rules and tools. You have to regularly check things, control who can enter, use cameras to watch, and have plans for emergencies. By doing these things, you can protect against things like theft and people getting into places they shouldn't be. This helps keep everything running smoothly and keeps people and money safe.
Steps to get the most out of your Operational Risk Management Software
Attain comprehensive risk supervision: Maintain real-time visibility of risk with Command Center's operational risk and compliance dashboard. With real-time data, identifying operational risk is immediately and efficiently addressed to resolve issues and eliminate the risk.
Set up risk governance: Identify risk areas that could jeopardize your organization's survival across all departments, levels, and processes. Connect hazards to assurance structures across the three defense tiers: the first line (operational), the second line (risk management and compliance), and the third line (internal audit). Customize risk control panels to assign, monitor, and track the completion of assigned duties and obligations.
Recognize & evaluate risks: Establish and maintain a unified risk register to keep a thorough and current summary of your risks. Assess, prioritize, and regularly measure the risks that have been discovered according to their probability of occurring and their quantitative effects (such as the amount of loss). Command Center facilitates quantitative, qualitative, and semi-quantitative risk evaluations.
Act on recognized risks: Don't merely watch your risks. Be proactive! Choose risk evasion, risk minimization, risk distribution, or transfer — to mitigate risk effects. Develop tailored risk management strategies unique to your organization, allocate risk responsibilities and clearly record all decisions.
Foster a risk-conscious culture: Cultivate a culture aware of risks by spreading risk-related information within your organization and to the governing authority (i.e., Management Board). Set up a uniform reporting procedure grounded on particular duties, frequency, limits, and report structures.
Demonstrate adherence: Demonstrate adherence to industry-specific laws, rules, and regulations to regulators and key stakeholders. Show that your organization has the necessary resources, including skilled personnel and technology, for proactive risk management. Ensure that roles and responsibilities are clearly communicated and documented.
How Command Center Transforms Your ORM
Our CMS Software offers a range of advantages to bolster your business's risk management practices:
Enhanced Efficiency and Productivity
Manual processes for managing operational risk can be time-consuming and error-prone. In addition to its use for Building Maintenance Management and Operations, Command Center helps save time and resources by streamlining tasks like risk assessments, incident tracking, and reporting with structured work plans and real-time data, enabling staff to focus the bulk of their energy on more important activities.
Improved Risk Visibility:
Our CMS software offers real-time 360° visibility into potential risks and their impact on the organization's operations. Through customizable dashboards and reporting features, managers can easily track key risk indicators and trends, facilitating proactive risk management strategies.
Better Compliance Management:
Compliance with regulatory requirements is a key consideration for organizations across industries. Our CMS software makes compliance management easier with a system designed to update operating procedures across the software to the most relevant of regulations, all from one computer making it a fast and easy process for managers. It also helps evaluate compliance status and establish controls to reduce compliance risks.
Real-time Monitoring and Reporting
Operational risk management software provides real-time monitoring capabilities, allowing organizations to track risk exposure and performance metrics continuously. Comprehensive reporting functionalities enable stakeholders to gain insights into risk trends, compliance status, and areas for improvement.
Verified Data-Driven Decision Making:
Our CMS software helps organizations make better decisions by leveraging NFC tags to audit-proof operating data and provide managers with verified accurate data they can count on to drive strategies. With historic reports, the data is always accessible and customizable to use for any form of analysis, enabling organizations to prioritize resources more effectively and allocate them to areas of greatest risk or opportunity.
Proactive Risk Identification and Mitigation:
Our CMS software is designed to structure operating procedures and provide instant alerts to facilitate a more proactive approach to compliance and risk mitigation. By leveraging predictive analysis and scenario analysis, you can proactively mitigate risks and prevent costly disruptions to your operations.
Developing an Operational Risk Management Program
In the process of creating an operational risk framework and program, areas the risk management team should focus on include:
Promoting an organization-wide understanding of the program’s value and function.
Leveraging technology to implement an automated approach to monitoring, aggregating, and collecting risk data.
Establishing an effective method for evaluating and identifying principal risks in the organization and a way to continuously identify and update those risks and associated measures.
Focus on helping the organization reduce material risk exposures while encouraging activities where the potential benefits outweigh the risks.
Focus on partnering ORM with other functions in the organization to better embed best practices into the organization.
Keep Your Business Operations Organized and Protected by Choosing the Right Software Solution
When evaluating software solutions for physical operational risk management, it's essential to consider various factors to ensure you choose the right fit for maximizing its effectiveness and ROI. Here's an expanded list of points to look at:
Real-Time Monitoring and Alerts: Ensure the software provides real-time monitoring capabilities, allowing you to track operational activities continuously. Look for customizable alert mechanisms that can notify stakeholders instantly about critical events or deviations from safety protocols.
Verified Data Capture: Verify that the platform employs robust verification mechanisms to ensure the accuracy and reliability of data capture. Features like electronic signatures, timestamping, and audit trails should be available to document operational data securely and provide a verifiable record of compliance activities.
Scalability and Customization: Look for a solution that can scale seamlessly with your organization's needs and be customized to accommodate specific industry requirements and regulatory standards. It should allow you to tailor workflows, risk profiles, and compliance mandates to ensure optimal effectiveness and compliance.
Integration Capabilities: Check for robust integration capabilities that enable seamless interoperability with existing systems and technologies within your IT environment. Integration with core business applications, IoT devices, and third-party platforms should streamline data exchange and enhance data visibility across the enterprise.
User-Friendly Interface: Prioritize software with a user-friendly design to ensure ease of use and adoption across all levels of the organization. Look for intuitive interfaces, customizable dashboards, and contextual help guides that empower users to navigate complex risk management processes effortlessly.
Advanced Analytics and Reporting: Seek a solution that leverages advanced analytics and reporting capabilities to provide actionable insights into operational performance, risk trends, and compliance metrics. The software should aggregate and analyze data from various sources to identify patterns and proactively address emerging threats.
Collaboration and Communication Tools: Ensure the software facilitates collaboration and communication among stakeholders through centralized communication channels, document-sharing capabilities, and task management tools. Transparent communication and collaboration promote cross-functional alignment and accelerate decision-making within the organization.
Command Center - Operational Risk Management solution enables risk managers to:
Why Choose Zendelity's Command Center Software for Operational Risk Management?
Monitor and Assess Risks: Instant alerts and notifications enable fast response to failed emergency procedures, ensuring proactive risk management. Command Center equips risk managers with robust tools to continuously monitor and assess risks associated with physical operations. Utilizing advanced analytics and real-time data visualization, risk managers gain deep insights into potential hazards, vulnerabilities, and emerging threats within their operational environments.
Identify Weak Points: Leveraging comprehensive risk assessment methodologies and scenario modeling capabilities, risk managers accurately pinpoint weak points in operational processes, infrastructure, and safety protocols. Command Center's intuitive interface allows for seamless identification of areas that require attention and intervention to mitigate risks effectively, facilitating targeted risk management strategies.
Mitigate Risks: With features like targeted risk mitigation strategies and safety controls deployment, risk managers can optimize operational workflows to reduce exposure to potential hazards. Real-time data capture and verification mechanisms ensure accurate risk assessment and swift mitigation actions. Command Center empowers risk managers to take proactive measures to mitigate risks and prevent incidents before they occur.
Respond to Incidents: From initiating emergency response protocols to coordinating rescue and evacuation efforts, the platform streamlines incident management processes to minimize the impact on operations and ensure the safety of personnel and assets. Instant alerts and communication tools facilitate rapid response and decision-making during critical situations. In the event of an incident or emergency, Command Center provides risk managers with the tools and capabilities to respond swiftly and effectively.
Ensure Compliance: Customizable compliance workflows, automated audits, and real-time reporting capabilities ensure organizations can demonstrate compliance with confidence and mitigate the risk of regulatory penalties. Integration capabilities enable seamless interoperability with existing systems, maintaining data integrity and compliance across the organization. Additionally, audit-proof data collected using NFC tags verifies that the worker was physically present and performing the required tasks, providing irrefutable evidence to stay compliant. Command Center facilitates comprehensive compliance management by enabling risk managers to track, document, and verify adherence to regulatory requirements, industry standards, and internal policies.
Optimize Resource Allocation: Scalability and customization features ensure the platform adapts to evolving operational needs, supporting long-term resource optimization and risk management strategies. Command Center leverages advanced analytics to optimize resource allocation across operations. Also, we have historical reporting that can enable managers to view and analyze data integrated across operations for more accurate analysis. By identifying high-risk areas and allocating resources accordingly, organizations can enhance safety, efficiency, and cost-effectiveness.
Drive Continuous Improvement: By analyzing historical data and identifying patterns, organizations can implement targeted interventions to enhance safety, mitigate risks, and drive operational excellence over time. Collaboration tools facilitate cross-functional alignment and knowledge sharing, enabling stakeholders to collaborate on implementing solutions and driving ongoing improvement initiatives. Command Center fosters a culture of continuous improvement by providing actionable insights into operational performance, risk trends, and incident data.
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Zendelity's Command Center is the top choice for building maintenance software in 2024. As a SaaS-based company, we understand the critical importance of reducing operational risk for property management businesses. Our software solutions are designed to empower facility and operations managers with the tools and insights needed to effectively manage and mitigate operational risks across their portfolios. By integrating real-time monitoring capabilities, audit-proof data collection, and standardized work plans, our software enables risk managers to streamline their operations, ensure compliance with regulatory requirements, and enhance the safety and security of their properties.
Give yourself the gift of peace of mind by choosing our software solutions for your operational risk management needs. With, Command Center you can proactively identify potential hazards, optimize maintenance schedules, streamline standardize operating procedures management, and coordinate emergency response efforts—all from a centralized and user-friendly platform. Invest in the future success and resilience of your risk operational management business by partnering with the Command Center by Zendelity today. Reduce operational risk and unlock greater efficiency and effectiveness in managing your properties.
Frequently Asked Questions
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Zendelity’s Command Center is a SaaS-based platform offering Operational Risk Management Software designed to help businesses identify, assess, and mitigate operational risks efficiently.
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Yes - To help businesses and institutions organize their data and make it accessible as possible, Command Center is SaaS Property Management Solution run through Microsoft Azure, so no on-site investment or dependence on IT is required.
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Yes, Operational Risk Management Software can be tailored to suit the needs of businesses across various industries, including manufacturing, finance, healthcare, and transportation. However, the specific features and functionalities may vary based on industry requirements.
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Yes - Command Center uses a cloud-based platform specifically to enhance data security and protection for our users. Run over Microsoft Azure, it leverages leading-edge security over the program and can only be accessible with a designated user login provided by the manager, set up for any customization of access levels for each user.
The data is also regularly backed up routinely based on the following:
Full back-up: weekly back-up
Differential back-up: every 12 hours and includes any changes
Transactional logs: back-up every 10 minutes
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Once the use case has been defined, the system can be up and running within a matter of days, with training materials and onboarding support provided as needed to ensure your team transitions as swiftly and hassle-free as possible.
