Risk Management Benefits: Why it is Key to Long-Term Success

Risk in IT is like quicksand—deceptively stable on the surface, but one wrong step can pull you into a struggle for survival. Every business decision impacts your risk posture, and thus, managing them with precision is your key to long term success.  

In this article, we explore why having an effective risk management plan is not optional to survive the market and how it is an enabler, rather than a cost-center. 

TLDR

• Risk management is essential for identifying, assessing, and mitigating potential threats to an organization’s operations, finances, and reputation. 
• Key benefits of risk management are improving resilience, ensuring business continuity, meeting stakeholder expectations, demonstrable security posture, and compliance with regulations. 
• A risk management strategy is crucial to meet increasing regulatory scrutiny and break new sales deals. 

What is the importance of risk management?

In the world of an unpredictable business landscape, understanding your posture is a critical piece to survival. A holistic risk management approach helps you mitigate security incidents, avoid unexpected losses, secure critical assets, and ensure stakeholder confidence.  

“The CISO or security leaders must make the sales team and the rest of the business aware that security can be the ultimate prerequisite to get into business negotiations to bring a mindset shift”

Aron Lange with Sprinto

7 key Risk management benefits Managing IT risks protects your organization from potential security breaches, data loss, and operational disruptions. When you proactively address risks, it helps to ensure business continuity, protects sensitive information, and maintains compliance with regulations. 

Let’s dive deeper into the benefits of Risk management

Minimize cyber risks

Risk management starts with identifying the critical assets and vulnerabilities that impose the highest threat. If you are unaware of the risk posture, you are probably not placing the right controls and measures – the lack of which can trigger a larger, unprecedented security event. 

Moreover, malicious actors are always on the lookout for an opportunity to strike your most vulnerable and critical assets to exploit the unattended risks. 

Before you know it, the lack of basic control that could have prevented a disaster is now keeping your infosec team busy doing damage control. 

To comply with regulations 

No matter the industry type or size of your business, you have to comply with applicable government or branding regulations. Risk management is a non-negotiable requirement to ensure compliance with regulatory frameworks. 

For example, clause 6.1 of ISO 27001 mandates conducting risk assessment for information assets. 

• SOC 2 Common Criteria 3.1 requires entities to identify and assess risks related to operational, financial reporting, non-financial reporting, and compliance objectives. 

• PCI DSS Requirement 12.1.2 requires that information security policy should be reviewed at least once annually. 

Sprinto removes the stress and complexity of managing security by empowering you to assess and visualize the true impact of security risks using trusted industry benchmarks, risk impact scores, enabling you to prioritize risks and manage them rationally. Continuous monitoring helps you on top of your risk posture and remedy issues proactively. 

Sprinto also automates and simplifies compliance by offering pre-approved, audit-grade compliance programs that you can launch with just a few clicks. Its adaptive automation capabilities tests controls, triggers reminders, and captures evidence continuously, all in an audit-ready format.

Ensure business continuity

Risk management does not stop at identifying risks and implementing corrective controls. This is because controls are not a guaranteed patch against every possible incident. Rather, consider them a layer of protection that minimizes the chances of a successful event. 

While prevention is better than cure in cybersecurity, you should be prepared to cure the worst-case scenarios; when prevention fails. A well-rounded end-to-end risk management strategy includes developing contingency plans to equip your infosec teams with the right course of action to keep key operations up and running. 

Gain stakeholder confidence

If you are a service provider, new prospects are unlikely to trust you with their sensitive data or intellectual property unless you can demonstrate the ability to securely process and store it. This includes a strong risk management strategy for effective damage control in case of mishaps. Without risk management, you risk being replaced by a competitor. 

An increasing number of businesses include security compliance certifications like SOC 2 or ISO 27001 in their vendor risk assessment checklist. As previously mentioned, you cannot get certified for any globally recognized framework unless your risk management practices are green signaled by an external auditor.

Enhances decision making

When you are aware about the risks in your organization, it guides your business decisions. For example, you can use the data from control systems to work up hypothetical scenarios and discuss strategies to execute decisions without taking any more risks. 

Leaders who use standardized methods of risk analysis and reporting to understand key risk indicators and emerging risks have a better understanding of their risk appetite, risk thresholds, and risk tolerance levels. 

This way, you can eliminate the guesswork associated with making well-informed decisions around prioritizing, mitigating, transferring, and accepting risks. 

Boosts communication 

When you have effective systems to identify and evaluate risks, function leads and the board of directors can communicate the strategies and roadblocks with key stakeholders. 

When you have a common language for communicating strategies, it fosters a culture of transparency and accountability that eliminates the possibility of friction. 

Having a proactive approach to risk management practices provides a wider perspective on where things may go wrong and strategies accordingly. An early warning system equips leaders and stakeholders to track changes to minimize the impact of disruptive events. 

How Sprinto helped Kodif step up towards enterprise-readiness with risk management and compliance

Drives operational efficiency & boosts growth 

Risk management is more than just a compliance checklist or defensive business strategy. However, the benefits of a risk management program is a growth factor as you scale. This is because business leaders usually implement controls as point-in-time solutions to address a gap when issues arise. 

This approach is not always the safest bet when managing bits of information security independently leaves a lot of gaps and creates inefficiencies when gaps snowball into an incident. Identifying and resolving risk issues in real-time ensures timely resolution. This way, you don’t have to allocate resources to mitigate it when it is at the edge. 

Integrated risk management with Sprinto

As your business scales, it typically adds tools, assets, software, and processes while expanding networks and servers to handle increased operations and customer demands. While this boosts productivity, it also introduces new risks and complexities.

That’s where a holistic approach to risk management comes in.

Sprinto offers a targeted approach to risk management in a way that addresses both internal and external risks while seamlessly integrating governance and compliance into your core operations. 

Sprinto works within your existing infrastructure, mapping risk controls to compliance requirements for any framework.

With a dedicated risk dashboard, it allows you to monitor risk status, treatment measures, assigned owners, and mapped controls in real time. You can also create customized risks, linking them to asset groups and risk scenarios, and track attributes such as exposed threats, vulnerabilities, and monetary value.

Get in touch with our risk experts to learn how we can help you manage and mitigate risks. 

FAQs

Why is it important to manage corporate risks?

The key benefits of managing all types of risks in the corporate world ties down to reducing potential losses from cybersecurity risks and meeting regulatory requirements. The numerous benefits of risk management activities include helping to reduce financial losses, ensuring long-term success, giving your business a competitive edge, meeting organizational objectives, and aiding in making the right business decisions.

What features should I look for in risk management solutions?

An effective risk management tool should identify the potential risks, help you make strategic decisions, aid in risk treatment planning, meet business objectives and organizational goals related to compliance, eliminate manual processes for your risk management team, and reduce the negative impact of reputational risks.

What are the principles of risk management?

The main principles of risk management are risk identification, risk analysis, risk financing, risk control, and claims management.