Benefits of the Enterprise Risk Management Program
An enterprise risk management plan helps an organization to keep track of their activities to evade losses and optimize profits. Every team is vulnerable to some factors that pose a threat to the success of their business objectives (Fraser & Simskins, 2010). A good ERM program acts as a protective measure to develop the immunity of an organization over both simple and sophisticated factors in the business environment. An ERM plan molds the culture of an organization into a risk-sensitive culture. This plan outlines risks at all levels and is handled openly with every employee. The overall effect of this transformation is the increase of organizations immunity to risks (Fraser & Simskins, 2010). Standardized reports in enterprise risk management enhance the focus of executives by ensuring data that provide better risk lessening decisions. The diversity of data prepared help to increase the overall knowledge of risks (Mehta, 2010). Poor analysis and reporting of risks can lead to misuse of organizational resources. An ERM plan presents an excellent risk management framework that ensures efficiency by allocating the needed amount of resources in alleviating risks. ERM also improves focus and perspective on risk. The tools and processes develop important indicators that help to detect potential hazards and improve the worth of reporting and analyzing risks.
Outcomes after ERM Implementation is Complete
The completion of the implementation of an ERM plan is marked by the increase in transparency of an organization. The dynamic and more composed risk framework used allows an organization to develop a desirable level of transparency (Olson & Wu, 2010). The plan outlines issues, challenges, potential risks, and challenges at all levels. Every employee is allowed to identify with organizational goals and be part of the wrestle to ensure greater value. An organization also goes through transformation establishing stern reporting and controlling tools. This transformation enhances the attitude of an organization to respond to potential risk and protect the whole organization from natural disaster, financial crisis, frauds or scandals. The organization can also comfortably relate with legal regulation in its business environment. The framework stresses the primacy of compliance to laws and regulation as a way to ensure greater value…