Integrated risk management is a process that takes into consideration the degree of risk that is found at all levels within a given organization. The idea is to assess the risk inherent with the operation in general, including how risk factors in one area of the operation may trigger specific responses in other areas of the operation. This all-inclusive approach to risk management can often help to minimize factors that could create ongoing operational issues that have long-term consequences for the business.
When used effectively, integrated risk management is a very proactive process. As the first step to the process, it is necessary to identify risk as it exists at various levels within the business. From there, risk must be assessed in terms of what that risk means to each phase of the operation. Once the assessment is completed, it is essential to address risk at each step in the business process, and determine what options are viable for dealing with that risk factor. Finally, steps are taken to reduce risk within each area of the operation, which in turn leads to increased efficiency and productivity, while at the same time limiting the potential for losses.
It is important to note that integrated risk management is not a one-time event, or even one that is conducted once or twice per calendar year. Instead, this type of all-inclusive risk management is an ongoing process that relates to the day-to-day activities of the company. From assessing risk in each phase of the manufacturing process to understanding possible risk factors involved during service delivery and face to face interactions of employees with customers, the risk evaluation is a constant aspect of the ongoing effort to make the company as stable and profitable as possible.
There is no one ideal approach to the process of integrated risk management. The exact processes used and the policies that govern those processes will vary somewhat from one business setting to another. A constant with integrated risk management is that all aspects of the operation are evaluated on a continual basis, identified risk factors are evaluated in light of the overall operation, and resolutions that ultimately benefit the entire business are the ultimate goal of the management process. As the circumstances of the business change over time, the strategies that are used as part of the integrated risk management process must also evolve in order to position the company to enjoy additional growth in the future.