There are many different terms for integrated risk management (IRM); GRC (governance, risk and compliance), as well as ERM (enterprise risk management) are two acronyms commonly used interchangeably with IRM. But there are slight differences between integrated risk management and other acronyms. This blog post will dive into what is integrated risk management, what is an integrated approach for an organization’s risk management program, the benefits of adopting an integrated risk management approach, the steps to take to build an IRM framework and more.

What is Integrated Risk Management?

Integrated risk management (IRM) is a set of practices and processes supported by a risk-based culture and software technology that provides a holistic, connected and “integrated” view of how well an organization manages its unique set of risks.

What is an integrated risk management approach for an organization?

Risk management isn’t what it used to be; over the past several years, technology has evolved to meet the increasingly complex needs of risk managers and the companies they serve. As a result, many organizations and research firms have shifted their focus from risk management or GRC (which can be siloed) to integrated risk management.

Operating through an integrated risk management framework leads to better business decisions and has been proven to increase overall performance. In fact, studies show that companies with mature integrated risk management programs are proven to realize up to 25% value growth.

For most organizations, topics like risk management, performance, and compliance are gathered using different methodologies and tools. This makes it hard to even locate, let alone compare and aggregate, risk information.

With traditional GRC functions like vendor management, information security, compliance, audit and more, risk management activities can easily become unnecessarily duplicative. This makes identifying and determining the most important risks subjective which, in turn, causes existing processes to become inefficient and ineffective.

What are the Benefits of Adopting Integrated Risk Management?

Failing to adopt an integrated risk management strategy leaves you vulnerable to blind spots. You’ll be less likely to identify high-impact risks and allocate resources accordingly. You also will lack a system for engaging people from top to bottom and across departments. Developing a cohesive risk culture is nearly impossible without breaking down barriers between departments.

Here are some benefits of adopting an integrated approach to risk management:

• More easily detect vulnerabilities across silos
• Make better business decisions to improve performance
• Uncover relationships and dependencies
• Design better mitigation strategies that cut costs and eradicate redundancies
• Stay on top of your responsibilities (and others’ responsibilities)
• Engage the appropriate people at the appropriate time
• Deliver more engaging and meaningful reports