You’ve recognized the need for a risk management system, evaluated vendors’ products, and chosen the system that’s best for your organization. It may seem like the work is done, but there’s still a significant challenge ahead: the implementation of the system.
This step is arguably the most important: failure to smoothly implement a risk management system will make it much harder to achieve success. Before beginning implementation, consider the following advice:
9 Steps to Implementing a Risk Management System
1. Define the end goal before starting
It’s impossible to begin any kind of project without a thorough understanding of where you’re going. Doing so will lead to confusion, frustration, and wasted resources as the team moves in multiple directions at once without any noticeable results.
Since you’ve already gone through the process of selecting a risk management system, you know what issues need to be solved and where the system is needed. Formalize this knowledge by creating a document that defines exactly what your organization needs from the system and how this can be accomplished.
If you’re going to use the risk management system in multiple areas, determine your priorities. These should be the areas with the most issues; highlighting these problems will allow the team to tackle them first.
In addition, define success for your risk management system. Are you aiming for a lower number of claims? Would you like to see a reduction in costs? Should your team reduce time spent on redundant tasks by 50%? Whatever the goal, pre-defining success ensures you can measure the effectiveness of the system through implementation and going forward.
2. Set a timeline
Implementing a risk management system is a complex process. It’s important to understand exactly what is involved and what that means in terms of a timeline. The vendor and your team must find a balance: if an implementation is too quick, something may be missed; if the implementation takes too long, the team may lose faith in the system or become upset with the vendor.
Consider these stages in the implementation process:
- First, the risk management system must be set up. The vendor will need to import historical data and complete any necessary customization.
- The system must be tested to ensure it will work correctly throughout the organization.
- All users must be trained in the proper use of the system.
Project management is key when implementing a risk management system. Determine milestones that can be easily measured throughout the process to keep all stakeholders on track, and consider appointing a project champion who is responsible for seeing the implementation through.
3. Build a relationship with the vendor
In many situations, the internal risk team views the vendor implementation team as external stakeholders who are only present for a few weeks or months. This is the wrong mindset. Risk management vendors have high levels of knowledge, insight, and resources that can help you manage both new and existing risks at any time.
By building a relationship with the vendor, you’ve widened your risk management network and increased the size of your risk management team. This can only benefit you as you seek to achieve your goals with the risk management system.
4. Be open to vendor suggestions
Risk management systems are built a certain way for a reason. Vendors have extensive experience with the needs of organizations much like yours. You should always be open to their suggestions, especially if they’re recommending a particular process.
Many teams fall into the trap of purchasing a risk management system only to use it in exactly the same way as their old system. For example, a team that switches from Excel spreadsheets may continue to manually add and report on data in the system, even when automation is possible. This mistake can be critical: the team continues to poorly utilize resources while extra resources are used to pay for the new system.
To avoid this problem, carefully consider all vendor suggestions on how their risk management system can truly improve your organization.
5. Customize where necessary
While vendor suggestions and knowledge are valuable, sometimes they may not realistically fit into your organization or goals. Some aspects of an out-of-the-box system may not be right for you. In this case, some customization is ideal. For example, consider your organization’s hierarchy, the ideal usage of the system, and your reporting needs. Only you can determine exactly how a risk management system will best fit into these requirements.
6. Be flexible
Adapting to changing circumstances is important when implementing a risk management system. Tasks may take more time than expected, there may be technical difficulties, or an employee may have a particularly hard time during training. You must understand that difficulties like these are bound to happen and typically only involve a small adjustment. Being ready to re-prioritize or modify existing plans allows all stakeholders to feel comfortable through the implementation process, even if not everything goes as planned.
7. Involve users and decision-makers
Another common mistake in the implementation of risk management systems is involving only decision-makers. While executives and top managers may be able to pick the system that best suits organizational goals, they aren’t the ones that will be working inside the system every day.
Involving users from the beginning ensures that the entire risk team is onboard or even excited about the change. They can also provide valuable insight into implementation: they may have needs or desires that decision-makers wouldn’t know about and can reduce complications in the implementation process.
Any significant organizational change is likely to fail without regular and proper communication. When implementing a risk management system, there are two critical communication avenues: the vendor and employees.
No matter how robust their system, vendors cannot read your mind. You must explain your system, timeline, and security requirements as well as how involved you expect them to be in the implementation process. This will keep both teams on the same page and prevent frustrating back-and-forth conversation.
On the employee side, users need to be taught what to expect from the system. In some cases, users may feel that they are being replaced by the system; it is your job to reassure them that the system will actually make their jobs easier and more meaningful by streamlining complicated processes. Tell your employees what will change and how it will impact them individually, and make them aware of these changes well in advance. Educating them on the role they must play in the implementation of the risk management system will simplify the process.
9. Implement in stages
While risk management systems often have extensive functionality, it can be overwhelming for a team to implement them all at once. This is frustrating to employees and can actually lower the chances of system success. Instead, choose the one area that is most in need of the system and start there. This allows the team to gradually become comfortable with the system and then expand their capabilities.
Using one small change as an example of the effectiveness of the system can also help win over resistant employees and prove that the system has value.
Risk management system implementation can seem like a daunting task. Following this advice will put you well on your way towards achieving your risk management goals.
Author: Rebecca Webb