What is a Risk Management Plan?
- Identify each risk, regardless of size, the source, potential severity, or which part of the organization it affects
- Analyze each risk to understand the details, including calculating the chance the risk will occur and estimating the possible damage, should that risk actually occur
- Prioritize them based on the results of the analysis
- Create a process to prevent AND manage it each risk
Step 1. Tap Into Your ERP
- Strategic Decisions. Your ERP helps you with making financial decisions, like expanding, hiring more employees, or acquiring other companies—all of which come with risk. Your ERP can provide you with the data you need to make decisions with the lowest risk potential.
- Compliance. Failure to comply with HIPAA, SOX, or other regulations can be extremely costly in many ways. Your ERP can provide the information to help ensure you’re on track with these requirements.
- Expansion, growth, and financial stability. For smaller companies in particular, lenders and larger companies look favorably on companies with audited financials. The reverse is also true: Smaller companies have a greater exposure to risk.
Step 2. Conduct a Working Session to Build Your Plan
- Identify all the risks (no matter how small)
- Score each based on the likelihood of it happening and the potential impact
- Determine your tolerance for each risk based on probability and potential impact
- Assign each risk to a business process owner who will be responsible for developing a risk mitigation strategy for that risk
Step 3. Use Process Mapping to Visualize Your Risk
Download this eBook to learn why any company should have a risk management plan, and get a step-by-step plan to help you create it. While the paper refers to Dynamics 365 for Finance and Operations, the processes and recommendations included are relevant for any ERP.