Many companies avoid utilizing risk management software solutions due to their belief that risk management software and risk management information systems are prohibitively expensive. In actuality, risk management software and a quality risk management information system is one of the safest, easiest and cost affordable ways for a company to mitigate risk. There are plenty of other myths that businesses believe regarding risk management, which in turn prevent businesses from operating at their maximum potential. This article highlights five myths that businesses believe to their detriment.
Only Large Companies Can Afford Risk Management Software
Smaller businesses often erroneously think that risk management is only for the large companies. To be sure, large companies have certain advantages when it comes to risk management. They can hire full-time risk management staff that are fully dedicated to managing risk. However, smaller businesses have the same need to manage risk, and it does not need to be prohibitively expensive. An automated solution such as risk management software is affordable and will keep track of risk on a daily basis, meaning small business owners can focus on growing the business while the software actively reduces risk.
Implementing Risk Management Is Just Too Difficult
Some businesses are led to believe that risk management is simply too difficult to implement. However, in many cases, risk management can be as simple as finding the right risk management software for the needs of the business. When a business uses the latest and greatest software tools along with appropriate risk management practices, risk management is implemented easily, efficiently and at a price that doesn't break the budget.
Risk Management Is Unnecessary Since the Business Has Done Alright So Far
For some businesses, it is easier to fall into the trap of believing that current risk management strategies are fine if there has never been a business disaster. Nothing could be further from the truth in actuality. The point of risk management is not just avoiding disaster. Rather, a risk management information system also focuses business efforts on productivity and the efficient use of resources. In short, the "if it ain't broke, why fix it?" approach should never apply to any business. Prudent and effective use of resources can make the difference between a failed business and a successful one at the outset of a business and its goals.
Focusing on Financial Risk Is the Key to Risk Management
Many businesses that employ risk management strategies believe that assessing financial risk is the key to a successful risk management strategy, but this is also an untrue myth. Financial risk is an important aspect of risk management, but it is not the complete risk management picture. In fact, strategic risk is just as important, and for many businesses, mitigating strategic risk is even more important than reducing financial risk. After all, a business that has a sound strategy will know where to allocate funds in a way that a business that focuses solely on financial risk cannot match.
Proper Risk Management Protocol Requires an Annual Review
Risk management is something that cannot be left to deal with on an annual basis, but plenty of businesses treat risk management in this way. Instead, active and flexible risk management is the key to achieving results with a risk management strategy. To this end, risk management software works actively on a daily basis to assess and evaluate risk, which means a business can remain flexible while consistently evaluating its risk in various areas. Even better, risk management becomes automated, ensuring that a business sees results in the most efficient and automated way possible.
As you can see, these are pretty common and widely perceived myths regarding risk management. At Ventiv, we focus on providing high quality solutions for all our client needs, and we hope you will learn more about our risk management software tools.
