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The Evolution And The Changing Faces Of Enterprise Risk Management

Enterprise risk management is not easy to define but generally is considered to be a new discipline that calls for corporations identifying the risks that they have faced, the risks that need to be managed actively and then to make a plan of action available to all the stake holders as a part of their annual reports.
Business organizations when compared to ERM software need to focus not only on the downside of the risks but also the upside as well.

Whereas the traditional approach of these organizations is to focus on the downside - that involves the loss from the currency or the interest rates in the financial market, or a financial loss that is caused due to the disruption in a supply chain, cyber terrorism attack which in turn impairs a technology information of a particular and specific organization.
When compared to upside, business organizations are supposed to consider the competitive opportunities, the strategic advantages which might arise from the deft management of risks. Some of these might also involve the decisions that involve items like where to locate the plant or office based on the risk analysis that would look at the political environment in a country.
ERM software: A Constant changing Management Discipline

Studying how the business organizations would manage their risks starting from the movements in currencies, interest rates to the public perceptions especially in terms of their reputation plays an important role in the investment process. Knowledge about the individual corporate risk profiles would lead you to invest in companies being confident enough meeting the corporate objectives and investor expectations.

Knowledge on these profiles would also help you identify the upcoming organizations for investments, along with better understanding which companies could lead you through a new plant or office with a belief that they could do everything possible in order to avoid the environmental damage treating the employees in a much more better manner.

The situation poised to change as the organizations have been managing their risks for years through the capital markets and with derivative investments that help them manage their ups and down with every moment in currencies, the interest rates, the commodity prices and equities.

From the mathematical point of view all these risks and exposures have been reasonably easy to measure resulting to profit and losses going straight to the bottom line.

Enterprise risk management software solutions help the organizations to manage their risks that defy easy measurements or a frame work of management. These involve risks like the reputation of the organization, day to day operational procedure, the supply chain, legal and human resource management, and over all governance.
How to find ERM Friendly Organizations

When it comes to erm friendly organizations it is very difficult for the investors to know which organizations are working towards managing their risks from a wider perspective of enterprise risk management and who is doing it in a much more effective manner.

A number of organizations especially US based do devote a significant portion of their annual reports discussing the risks regardless of whether they call it ERM. One quick way of checking if an organization has risk management software or not is through checking for CRO officer. Another clue is finding companies who specifically have members involved in managing and co coordinating enterprise risk management efforts. And it is these individuals who have enterprise risk management in their titles.

The investment landscape is changing in terms of ERM (Enterprise risk management) making it important to know which are the organizations who are doing a good job in managing risk management. Though this is a small field to study it is worth considering as it would continue playing a significant role in terms of the investment communities for years to come.

About The author:
Sophia Wright covers the latest news and updates in Risk Management strategy. With more than seven years of marketing management experience, she has contributed to a variety of traditional and online publications, She has over six years of experience in journal risk analysis and as a practicing manager of enterprise risk management System, and successfully executing several projects in ORM Software solutions, Risk management strategies, Governance risk compliance.

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