More and more organisations are beginning to realise the effectiveness of Enterprise Risk Management (ERM) and are actively looking for ways of making it work for them. Many factors have come together to bring about this growing acceptance; education, internationally-accepted standards for risk management and best practices are just three factors that are spurring the uptake of ERM. There are many more, including the changing business environment itself, and the need for firms to revisit their strategies in the light of disruptions and the ensuing loss of revenue stemming from incidents which were not anticipated or inadequately prepared for.
Incidents like the Covid-19 pandemic, with its ability to affect economies worldwide and wreak havoc on supply chains, may be more recent reasons why ERM should be a part of every organisation’s strategy, but risk management is not something new. Companies may have even been practising some aspects of ERM without fully realising or recognising it as such. This is not necessarily a bad thing as the organisation will then not have to start from scratch; more importantly, staff will not be dealing with something totally new. There need not be extensive reorientation or training, and people may not have to move beyond their comfort zones.
This growing acceptance also indicates that there are enough critical success factors and stories to convince firms that putting ERM systems in place is a workable strategy with measurable ROI. Resources allocated to ERM can thus be justified, and continue to be applied towards creating value for the firm.
3 The IERP® Monthly Newsletter September - November 2021
Factors Influencing Accelerating Adoption of ERM