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5 Reasons Why Government Agencies Need ERM
Posted by: worldrd • Posted in: Blog
Posted on June 22, 2012
Government agencies are under pressure to deliver successful programs while maintaining service levels, balancing shrinking budgets and managing strict timelines with less staff. To meet these challenges, more and more agencies are turning to Enterprise Risk Management (ERM) protocols and technologies.
Five reasons why ERM is critical for government agencies:
- Proactive management of risk. Whether its economic meltdowns or global health scares like H1N1, the government faces more widespread, complex risks than any other type of organization. Today’s citizens want a government that not only manages the consequences of risk, but also anticipate and handle issues before they turn catastrophic. Effective risk management policies help to force all decision makers to think and work proactively.
- Organization-wide visibility. ERM practices provide government agency leaders with visibility into their organization’s entire portfolio of programs. This practice not only improves transparency across departments, but also helps break down silos between each program – greatly improving proactive communication about risks and the sharing of best practices.
- Budget management. Given large federal budget deficits and an unsustainable long-term fiscal path, program managers for government programs are challenged to anticipate and manage the impacts of budget re-allocations and continuing resolutions. A strategic risk management approach will aid in this challenge and enable organizations to stay on budget under notoriously fluctuating circumstances.
- Reputation development and protection. Reputation is an intangible indicator of past performance and future success. For government agencies, a solid reputation is a critical asset. ERM can not only help an organization to identify reputational risks in advance, it can also improve the agencies reputation by improving program delivery timelines, ensuring more accurate bids and stronger customer relationships.
- Improved reporting for improved decision making. Lack of information, control and time are the major drivers of the risks facing government organizations. An ERM plan, and ideally an ERM technology that goes beyond just spreadsheets, helps to ensure that real-time, data-driven, interactive reports are delivered to all necessary parties.
This World Risk Day on June 26, gather with executives from government organizations like NASA and the United States Air Force, in a virtual forum, to discuss in more detail how risk management helps government entities complete programs and reach internal goals by avoiding unforeseen risks along the way.